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Hospitals Increasing Pay, Benefits to Fight Workforce Turnover

Analysis  |  By Jay Asser  
   December 21, 2023

Retaining and attracting talent remains a priority for organizations.

Hospitals and health systems are finding ways to offer improved compensation and benefits to employees despite feeling the pressure to keep costs down.

As workforce turnover continues to plague organizations, hospital leaders are recognizing the value of investing in their staff with the thinking that the long-term dividends will outweigh the short-term costs.

According to a survey by Aon, 70% of hospitals implemented or bolstered sign-on bonuses in the past year, while 59% increased new hire pay, 54% increased their minimum wage scales, and 52% increased or added referral bonus programs.

The professional services firm released its annual Benefits Survey of Hospitals, which provides key findings for 160 health systems and 1,400 hospitals between April and June 2023.

The results also revealed that 62% of hospitals reported increased turnover among nurses, 41% experienced higher exits among non-physician clinical positions, and 22% dealt with physicians departing more often than the previous year. Turnover happened most often among staff with one to three years of tenure, the hospitals said.

Combating that level of turnover can feel like an uphill battle. With margins being thin and labor costs at the forefront of every CEO and CFO’s mind, hospitals leaders are getting creative to reward their employees in ways that are less detrimental to the bottom line.

Aon’s survey found that 95% of hospitals are offering tuition reimbursement programs, 93% are offering flexible work options, 84% are offering personal level, 80% are offering financial wellness/planning, 64% are offering gender-affirming benefits, 57% are offering enhanced behavioral health benefits, and 53% are offering paid parental leave beyond state and city mandates. A minority of the hospitals surveyed, meanwhile, are offering other premium benefits such as reduced hours for benefits eligibility (45%) and on-site daycare (28%).

Improving employees’ health benefits is another strategy organizations are pursuing. Of the hospitals surveyed, 82% aim to pay 76% or more of their workers’ healthcare costs, while 13% offer a no-cost health plan option to some of their employees.

Offering these types of benefits can be valuable for hospitals who are more restricted in their financial flexibility or are competing for talent in rural areas. Joe Perras, president and CEO of Cheshire Medical Center in Keene, New Hampshire, recently told HealthLeaders that to survive as a rural hospital, his organization has to “kind of thread the needle and make sure that we can provide competitive wages so that we're not losing the limited staff that we do have to other folks in the market.”

Even with the efforts to keep their employees happy, hospitals remain concerned about their workforce heading into 2024. Two of the top concerns surveyed leaders have are offering competitive total rewards to attract and retain talent (85%) and increasing healthcare costs for the health system (85%).

Reconciling those concerns will continue to be a balancing act for hospitals for the foreseeable future.

Jay Asser is the contributing editor for strategy at HealthLeaders. 


Hospital leaders understand the need to invest in their workforce to keep it strong, even if that means committing financial resources.

In the past year, 70% of hospitals implemented or increased sign-on bonuses, 59% raised new hire pay, 54% upped their minimum wage scale, and 52% increased or added referral bonus programs, according to a survey Aon.

Hospitals have also gotten creative with the benefits they offer their employees, which have the potential to be less financially taxing on organizations.

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