Robust job growth in healthcare reflects the vibrancy and importance of the sector, but it also poses problems with recruiting, retention and the pressures of wage growth for hospitals and other care venues.
Healthcare job growth was robust in 2018, and there's nothing to suggest that there won't be more of the same in 2019.
"The conditions that cause the job growth in 2018 will persist to 2019," says Ralph Henderson, president of Professional Services and Staffing at AMN Healthcare Services, Inc.
"You have retirements of Baby Boomers, an aging healthcare workforce, continuing shortages in your overall job growth, a strong economy and all of those things should produce similar results at 2019 for these various professions."
Travis Singleton, a vice president at physician recruiters Merritt Hawkins, agrees.
"I don't see any way it couldn't be," he says. "Just starting with supply, the most-recent projection is a shortage of up to 121,000 physicians by 2030."
In 2018, healthcare created 346,000 new jobs, up from 284,000 jobs in 2017, according to the Bureau of Labor Statistics. The 2018 figures include 219,000 jobs in ambulatory services and 107,000 hospital jobs.
While the robust job growth in healthcare reflects the vibrancy and importance of the sector, it also poses problems with recruiting, retention and the pressures of wage growth for hospitals and other clinical venues.
Singleton says the demand for jobs will be felt across the healthcare space.
"There's a lot of talk with primary care and everything that goes with primary care; the physician extenders, the team-based health, nursing and all those things," he says. "There's going to be huge need for that. But what most people don't realize is that 72,000 of that physician shortage is specialists."
"This idea of preventative care and medical homes is good, but you can't manage your way out of the fact that 10,000 Baby Boomers are turning 65 every day," Singleton says. "That demographic is 14% of the population, but it's still generating about 34% and 37% of our diagnostics and procedurals, respectively."
The growing numbers of employed physicians and other clinicians presents good and bad news for health systems.
"The good thing about that is it allows health systems to be very nimble and aggressive to recruit providers and they have been," Singleton says. "You don’t see a lot of independent contractors. You don’t see a lot of partnerships. They're almost all on an employed basis."
"The bad news is it's very tough on retention," he says. "If you think five, six years ago, the physicians had their team and they own the practice, they own the equipment, they have the patient panels, they dealt with your family. In other words, you couldn't just have a bad day and walk away."
"Now we're starting to see—especially on the facility level—that retention is really starting to struggle. You're starting to see people change flags. They don't even relocate. They just go to a different system because they don't like the way they're treated."
"It was already ultra-competitive, and we already had a supply problem, and now it's about recruiting, retention, and engagement. If you're not good at all three of them, I don't know how you survive in the next two, three years," Singleton says.
Henderson says that health systems that he works with are budgeting for wage growth of up to 2.5% in 2019, although that growth could be higher in more-competitive regions on the East and West Coasts and in major hubs.
"We've seen big investments in the last three years on recruiting to help capture more of this shrinking supply, and we're seeing them put in place incentives for employees to stay longer and not retire," he says.
What should health systems do to improve recruiting and retention?
"I wish there was one magic bullet. We would just tell everyone exactly what that is," Henderson says. "Most are spending time defining their employee value proposition, making sure people understand their culture better, becoming more flexible in who they would consider for positions sometimes the standards get ratcheted up, and that can be detrimental to hitting your hiring goals."
"Others are investing in new options to make their existing labor more effective, like scheduling tools, technologies that make the job easier for people, and they start to market those things to prospective candidates," he says. "So, it's not just the job and what it pays, it's what our environment is, how we support you on the job. Those healthcare systems have a leg up in competing for new talent."
Singleton urges health systems to "figure out where you're vulnerable."
"We see so many of these beautiful plans that are drawn up in these strategic boardroom sessions about what they want their health system to be," he says. "That's great, but who's going to do it? Who's actually going to carry it out? We find a lot of health systems where, unbelievably, that's still a flaw in the strategy."
“It was already ultra-competitive, and we already had a supply problem, and now it's about recruiting, retention, and engagement.”
Travis Singleton, vice president at Merritt Hawkins
John Commins is a senior editor at HealthLeaders.
No slowdown foreseen for healthcare job growth in 2019.
Retiring Baby Boomers, an aging clinical workforce, a strong economy, and ongoing personnel shortages are driving demand.
The clinician shortage will put a premium on recruiting and retention strategies that include more than simple financial compensation.