Labor challenges that have plagued hospitals and health systems across the United States might be coming to a close, as indicated by a recent report. The human resources and consulting firm, Aon, has observed that "a growing number of U.S. hospitals are reporting stable or lower employee turnover after enhancing pay and benefits to attract and retain talent."

"Healthcare Labor Rebound: Aon's Insights"

Background of the Labor Crisis

The labor and staffing issues faced by hospitals and healthcare companies were largely due to the COVID-19 pandemic and the "Great Resignation." Starting in 2020, these events took a toll on healthcare providers across the country. Physicians and nurses, in particular, complained of burnout as the pandemic raged, leading to a mass exodus of these healthcare professionals in the early years of the pandemic.However, this year, there has been a significant change. Hospitals and health systems are witnessing a sharp decline in the turnover of health professionals. Aon's data shows that just 7% of hospitals report increased turnover among nurses compared to 62% last year. Similarly, 5% of hospitals "experienced higher departures among non-physician clinical positions" compared to 41% in 2023, and 9% said that physicians are leaving more often compared to 22% in 2023 than the previous 12 months.Aon's annual benefits survey of hospitals, which was conducted between April and June of this year, included results from benefits plans representing more than 1,500 U.S. hospitals. This survey provides valuable insights into the current state of the healthcare labor force.

Other Studies on the Healthcare Labor Market

Earlier this year, Fitch Ratings released a report stating that the "worst of the labor downturn" could be nearing an end for not-for-profit hospitals in the U.S. Not-for-profit hospitals account for the majority of hospitals and health systems in the country. For example, the Fitch report noted that the year-over-year "average hourly earnings growth of hospital employees has (favorably) declined, averaging 3% in 2024 compared to 4.2% in 2023."This indicates that the healthcare labor market is gradually improving. However, industry analysts caution that hospitals cannot expect labor conditions to improve without adjusting their recruitment strategies.

Recruitment Strategies and Their Impact

Aon's analysis shows that 70% of hospitals have increased the pay of new hires in the last year, and 69% have implemented or enhanced sign-on bonuses. These measures are aimed at attracting and retaining talent in the healthcare industry.Sheena Singh, senior vice president of Aon's national healthcare industry practice, emphasized the importance of "remaining focused on investment in total rewards and support for workforce resiliency and mental health" to continue addressing nurse and technician recruitment and retention.In conclusion, the recent reports suggest that the labor woes in U.S. hospitals may be on the verge of ending. However, hospitals need to continue to focus on recruitment strategies and invest in their workforce to ensure a stable and sustainable healthcare system.