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Physician Employment Market Stabilizing, Recruitment Executive Says

Analysis  |  By Christopher Cheney  
   August 16, 2021

Despite coronavirus pandemic disruptions, demand for physicians is high and physician compensation is growing, president of recruiting agency says.

The physician employment market is returning to pre-pandemic levels, a physician recruitment expert says.

Particularly in the spring of 2020, the coronavirus pandemic wreaked havoc on the physician employment market. Some physicians worked without pay and others were placed on furloughs.

"The demand for physicians went dormant in April and May 2020. Healthcare organizations started cutting back on their ability to do physician searches because they were losing money," says Tony Stajduhar, president of Alpharetta, Georgia-based Jackson Physician Search.

Now, demand for physicians is as strong as ever, he says.

"We started to see a change in the last quarter of 2020. There was a turnaround and our volume of hospitals recruiting started growing. Then in the first and second quarter of 2021, we had record months every single month in the history of our organization. Year-over-year in the first quarter of 2021, we were well over a 25% increase in volume. The demand for physicians had been pent up because healthcare organizations fell behind last year—they not only needed to catch up but also had a 2021 medical staff plan."

Stajduhar anticipates strong demand for physicians to continue throughout 2021. "Even with the coronavirus spikes that we are seeing, there were lessons learned in healthcare last year. You have got to keep your foot on the gas—you can't just 100% stop doing anything, including elective surgeries. You have got to figure out different ways to get creative," he says.

Physician compensation trends

Despite the upheavals of 2020, physician compensation has maintained a positive trajectory during the pandemic, Stajduhar says. "There were physicians who went unpaid last year. Physicians were on productivity contracts and having their compensation cut. But overall, physician salaries increased about 1.5%, according to Doximity."

As the pandemic drags on, physician compensation will likely continue to grow, he says.

"I anticipate that physician compensation is going to continue to rise during the pandemic. As physicians leave the field or retire early, the shortage of physicians is going to be even more exaggerated. As physician shortages continue to grow, this could turn into a free agency market because the competition between healthcare organizations needing physicians could lift restrictions and guidelines for hiring physicians. It is a market where the physicians should be able to demand what they want."

Whether or not physicians can negotiate significant salary increases, they should negotiate contracts with the pandemic in mind, Stajduhar says. "They should be negotiating for catastrophe clauses in their contracts. They need some protection financially because there were many physicians who took a major financial hit last year."

Moving away from the cities

Surveys conducted at Jackson Physician Search and other organizations have shown that some physicians are moving out of metropolitan areas for other locations.

"What we have been hearing from physicians is that they are trying to get out of some of the major metropolitan areas that have been hit hard by COVID-19. There is a perception that there are safer places to be located such as rural and suburban areas. Perception is driving a lot of this trend. Some physicians do not want to continue to live in metropolitan areas and put their families at risk," Stajduhar says.

Two other factors may be influencing the move away from metropolitan areas, he says.

"First, many physicians have loved ones who are hundreds of miles away or thousands of miles away, and things could happen to them in a heartbeat. So, physicians are looking to make a move to get closer to family. Second, some physicians may be looking for a slower pace of life. About 20% of the population lives in rural America, but only 10% of physicians work in rural America. So, there are opportunities for physicians to work in rural areas, make a very good living, and have a dramatically lower cost of living."

Recruiting advice for physicians and healthcare organizations

In the physician employment market, time is a crucial factor, Stajduhar says.

"From the physician perspective, they should be thinking ahead at least a year when trying to find the right position. If they think 18 to 24 months out, then they have more time to be selective. But once it gets to a year, the clock starts ticking and it gets louder every day. For healthcare organizations, they absolutely need to start recruiting early. They should start recruiting at least 12 months before they need to fill a position. In some cases, it can be hard to fill specialty positions and it can take two years."

Seeking perfection can be a mistake, he says. "I always tell physicians and healthcare organizations that if they can find 80% of what they are looking for that is probably as good of a match as you are going to find. For physicians, the key is judging the critical 80% of things that you must have for a good opportunity. For healthcare organizations, you must determine the 80% of things that you need in a physician."

Lastly, physicians and healthcare organizations should be open minded during the recruitment process, Stajduhar says.

"For physicians, they should be open about geography. Most people grow up in their town or one or two other places, they vacation in a couple of places, and that is what they think of in terms of locating for a job. They think about what is easy—they know a handful of locations and there is some comfort there. As someone who has recruited physicians across the country, I can say there are amazing places from coast to coast. Physicians just need to give a new location a chance. If the majority of what a physician needs is in a location, they should open their mind and take a look at it."

"For healthcare organizations, they should keep their minds open, too. They may want someone young who is going to stay for 30 or 40 years, but they can't build their recruiting program on that. If you find someone who is nearing the end of their career, they could still work for you for 10 years and make a huge difference in your practice. These are often physicians who are in your own backyard, and you do not have to work hard to recruit them."

Related: Physician Comp Flat But Stable During Pandemic

Christopher Cheney is the senior clinical care​ editor at HealthLeaders.


After going stagnant in spring 2020, demand for physicians has rebounded strongly, says Jackson Physician Search President Tony Stajduhar.

Citing Doximity data, Stajduhar says physician compensation increased 1.5% in 2020, and he expects salaries to continue to increase this year.

Some physicians are moving from metropolitan areas to the suburbs and rural areas. The perception that cities are hardest hit by the pandemic is a driver of this trend, Stajduhar says.

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