The healthcare labor shortage isn’t a pending threat but a current and worsening emergency. McKinsey researchers predict a 200,000 to 450,000 shortage of registered nurses by 2025, and the Association of American Medical Colleges projects a 38,000 to 120,000 physician deficit by 2034.
The staffing shortfall is wreaking havoc on health system finances. Labor costs make up more than half of organizations’ total expenses, and many systems saw an increase in labor spending of 10% to 15% in 2022. Moreover, if you don’t have enough clinicians to care for patients, you are turning away revenue and, even worse, unable to care for people that need it.
Healthcare leaders need to act now to retain and attract an experienced and skilled workforce. Labor management is a big-picture, long-term challenge, but organizations can also target immediate action for improvement. Prescriptive solutions to one of today’s most pressing problems, retaining the existing healthcare workforce, will build talent pools now and attract and retain future professionals.
In the spring of 2022, 50% of nurses stated that they planned to leave their current roles by the end of that year. Of those moving on, 32% intended to leave the field entirely. The problem extends beyond nursing to nearly every aspect of care delivery and operations, from coders and billing to medical assistants, radiology techs, and more.
An aging population is a prominent driver of healthcare professionals leaving their roles. Within the nursing population, 55% are 50 or older, and 62% of this segment plan to retire by 2026. As more of the workforce inevitably reaches retirement age, organizations must respond to other reasons for leaving, namely issues around culture and working conditions.
Members of the healthcare workforce cite burnout and lack of support as the primary driver of quitting or retiring. Specifically, these professionals name the following issues:
Leaders can address some of the above challenges that are contributing to the healthcare labor shortage with the following six actions:
Given the urgency of the healthcare labor shortage and its devastating impacts on health system finances and care delivery, leaders must focus on short-term improvements. Today’s top priority is taking the actions above to improve the workforce experience, retain talent and improve a dire financial outlook. Meanwhile, leaders must also consider long-term opportunities to build robust, sustainable workforces. These are real actions that health systems can enact today to improve the current challenges, but more systemic and complicated solutions are still needed for long-term success.
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