Overcoming Healthcare Staffing Shortages in 2023

For the first time in 16 consecutive years, the top priority for leaders in the American College of Healthcare Executives’ annual survey wasn’t financial concerns but workforce challenges.

Though many blame the COVID-19 pandemic for today’s staffing shortages in healthcare, the issue has been brewing for much longer.

Researchers conducting a study on supply and demand in the healthcare workforce predicted a shortage of physicians, nurses, and allied healthcare professionals back in 2009.

They cited rising demands on healthcare systems and aging workers moving into retirement as the biggest drivers of staffing shortages, which we’re currently seeing. But no one could have predicted the pandemic's toll on turnover rates.

In this article, we’ll explore what organizations can do to improve healthcare retention and recruiting efforts in 2023.

How to overcome healthcare staffing shortages

Data from the US Bureau of Labor Statistics (BLS) shows there will be ~2 million openings in healthcare every year until 2031. Overall employment in these roles is set to grow by up to 40% in that time, much faster than the average for all other occupations.

According to the BLS, many of these job openings are expected to result from the need to replace workers who leave healthcare or exit the labor force.

We’ll begin with an overview of these current and predicted shortages before discussing why healthcare employees are deciding to leave the field.

Healthcare Staffing Shortage Statistics

Staffing shortages in healthcare by the numbers

In our guide on key statistics healthcare employers need to know, we discussed alarming data regarding the current nursing shortage.

So today, let’s expand our view to include healthcare staffing industry trends and statistics encompassing the entire ecosystem. These reveal that:

  • The global healthcare workforce will be short 10 million people by 2030.
  • The supply of registered nurses declined by more than 100,000 in 2021, the largest single-year drop in more than 40 years.
  • The US may lack up to 450,000 nurses for direct patient care, equating to a 10 to 20% deficit, by 2025.
  • The US may also face a shortage of up to 124,000 physicians by 2034.
  • Hospitals and health systems have experienced pharmacy technician turnover rates of at least 21% since 2021, with some losing 41% or more of their technicians and still needing to recover.
  • There may be a shortage of more than 3.2 million lower-wage healthcare workers (such as medical assistants, home health aides, nursing assistants) by 2026.
  • The US will need an additional 98,700 medical and lab technologists and technicians by 2025.

These predicted healthcare shortages can be attributed to many factors. However, turnover is the biggest reason for the healthcare staffing trends we’re seeing today.

Main factors driving high turnover in healthcare

Experts say healthcare has been the second largest sector hit by the Great Resignation, with 20% of healthcare workers leaving their jobs in 2021 — more than double the pre-pandemic rate.

According to one report:

  • The average hospital turnover rate in 2021 was 25.9%, a 6.4% increase from 2020.
  • Hospitals have turned over 100.5% of their staff in the last five years.
  • Voluntary terminations accounted for 95.5% of all hospital separations.

But it’s not just hospitals feeling the brunt of the turnover juggernaut. Median turnover rates for primary care positions now average 10–20%.

So what are the three biggest drivers of high turnover in healthcare?

1. High patient caseloads and understaffed teams

Healthcare facilities are experiencing unprecedented service demands at a time when most teams need more staff. This unsustainable situation is due to:

Greater access to health insurance coverage. Those who put off medical visits before are now seeking appointments and require more advanced care due to years of health neglect. Though it’s a win for providers to see more insured patients, it also means additional stress on short-staffed teams.

Access to healthcare benefits contributes to high patient caseloads

Higher populations with chronic diseases. The CDC says more than 40% of school-age children and adolescents have at least one chronic health condition, while 6 in 10 adults have one or more. Since studies show people are also living longer, there’s an overflow of patients requiring long-term, specialty care to manage these conditions.

Aging Baby Boomers. The over-65 population will grow by 48%, reaching a total of 77 million people by 2034. According to an article in Time:

“By 2035, there will be more seniors aged 65 or older than children aged 17 or younger—the first time this demographic imbalance has occurred in the nation’s history.”

Seniors typically see healthcare providers 4x more than younger generations. They’re also more likely to need advanced and specialty care.

So with more patients to see, understaffed teams are quickly becoming stressed, overworked, and prone to burnout. And turnover rates always spike with this dangerous combination.

2. Burnout

The World Health Organization (WHO) defines burnout as a syndrome resulting from chronic workplace stress that has been unsuccessfully managed. Symptoms of burnout include:

  • Feelings of energy depletion or exhaustion.
  • Increased mental distance from one’s job, or feelings of negativity or cynicism related to one's career.
  • Reduced professional efficacy.

Burnout isn’t just detrimental to employee engagement and job satisfaction. In healthcare settings, “reduced professional efficacy” affects patient outcomes, increases medical errors, and raises mortality rates.

COVID-19 was a primary driver of burnout in healthcare settings, as statistics reveal that:

  • 60-75% of clinicians reported symptoms of burnout during the pandemic that current workforce shortages have exacerbated.
  • 40% of physicians and 49% of nurses reported feeling burned out in 2022.
  • 28% of respondents in one survey admit they have quit a healthcare job due to burnout.
  • 34% of nurses said they would leave their jobs by the end of 2022, with 44% blaming burnout as the main reason for doing so.
  • Of all healthcare workers considering leaving the field, 89% cite burnout as the primary motivator.

Burnout is the most pressing reason for high turnover rates — yet it’s the most easily within an organization’s power to control and prevent.

However, many healthcare professionals are leaving the workforce entirely to retire.

3. Healthcare Workers Reaching Retirement Age

Many healthcare workers fall in the population of Baby Boomers reaching retirement age. Rather than deal with the stresses of understaffed teams and burnout, many are retiring early or as soon as they reach age 65.

According to statistics:

  • 21% of physicians (~32,000) will reach retirement age by 2026.
  • More than 2 out of every five practicing physicians will be over the age of 65 in the next decade.
  • 38% of physicians said they would like to retire in 2022.
  • Experts predict that more than one million RNs will retire from the workforce by 2030.
  • The US will need ~200,000 new nurses each year until 2026 to replace retiring nurses.

Healthcare providers now need to hire staff for new positions and replace employees leaving due to burnout or retirement. This added pressure breeds competition between organizations to attract healthcare candidates with hefty sign-on bonuses and sky-high compensation packages.

Nurses nearing retirement age are contributing to healthcare shortages

Unfortunately, the true cost of losing an employee is much higher than retaining one. Turnover costs organizations:

  • Lost productivity during vacancies
  • Lower employee morale during understaffed periods
  • Sourcing, training, and onboarding costs for new employees
  • Higher compensation expenses for new hires

Since it’s more cost-effective to retain versus hire healthcare employees, let’s talk about the best:

Tips to improve healthcare staff retention

These healthcare retention strategies are designed to improve employee morale, engagement, job satisfaction, and retention. Therefore, your patient outcomes may also earn a boost.

1. Consider retention pay

Understaffed teams face additional stress and pressure, causing many employees to look for opportunities elsewhere. Retention pay helps your organization motivate employees to stay.

Here’s how it works: Rather than let the money you have available due to vacancies sit on your books, you’ll allocate a portion to your understaffed team. Calculate a prorated amount for each team member per pay period and determine how long they can expect this bonus to last.

Retention pay should continue as long as vacancies persist. Once you reach optimal staffing levels, the retention bonus goes away.

This additional pay tells your employees that you appreciate their hard work and value their loyalty. And statistics tell us that 44% of employees believe additional financial incentives would encourage them to remain with their current employer.

2. Make learning part of your company culture

Employees who believe their employers are invested in their career growth tend to stay. So it’s wise to embrace personal and professional development as part of your company culture.

Consider these statistics:

  • 86% of professionals said they would change jobs if a new company offered them more opportunities for professional development.
  • Employees who receive professional development are 15% more engaged in their jobs and have 34% higher retention rates.
  • Deloitte researchers found that organizations with a strong learning culture are 92% more likely to develop novel processes, 52% more productive, and 17% more profitable than their peers. Their engagement and retention rates are also up to 50% higher.

To invest in your healthcare employees (and retain them), consider ways to:

Create defined career paths and lattices. Help entry-level workers envision their future with your organization by showing them which positions they can grow into and how.

Encourage continuing education. Tuition assistance, student loan forgiveness, and other incentives motivate professional development while strengthening your teams’ knowledge and skill sets.

Develop opportunities to upskill and reskill employees. Identify areas for cross-training and other on-the-job instruction to add to your employees’ toolkits. Organize lunch-and-learn webinars that will be useful for any role, such as emotional intelligence workshops.

These perks provide a competitive advantage to retaining and recruiting healthcare workers to your organization. You’ll help them build the essential skills they need in their current roles and those they’ll need to advance their careers with you.

3. Gamify employee loyalty

Gamification is the process of using elements from game playing (such as point scoring, friendly competition, badges, and prizes) to encourage engagement. Brands using gamified loyalty programs see an average 47% rise in engagement and a 22% increase in loyalty. And that’s why many employers are using these systems with their workforce.

Employee recognition programs consist of cloud-based software or apps your team can use to set goals and challenges for employees to achieve. They’ll rack up points for completing specific tasks or displaying certain behaviors, which they can turn into rewards like gift cards or a day off.

Nashville, Tennessee-based Vanderbilt Health launched a Work Perks program to boost employee retention in this manner. Employees log in and play games on a website to earn discounts in categories like health and wellness, dining, and local attractions. Five employees will even win a grand prize “staycation” at a local hotel, complete with dinner, gift baskets, and other goodies.

Your healthcare facility may be able to get perks like these sponsored by local businesses (especially if they’re for frontline workers), so they cost very little out of pocket (if anything).

Why this works: Research from Gallup shows that employees who don’t feel recognized in the workplace are twice as likely to quit. On the other hand, those researchers learned that:

“Workplace recognition motivates, provides a sense of accomplishment, and makes employees feel valued for their work… Recognition not only boosts individual employee engagement but also has been found to increase productivity and loyalty to the company, leading to higher retention.”

For example, users of WorkTango's holistic Employee Recognition & Rewards platform have seen a 50% reduction in turnover rates.

Loyalty programs create a fun, interactive way to show your appreciation and recognition to your dedicated healthcare workers while boosting employee engagement.

4. Facilitate flexible work

Active and passive job seekers are prioritizing workplace flexibility now more than ever. Several employee surveys reveal that:

  • When people have the chance to have a flexible work schedule, 87% of them take it.
  • Flexible work arrangements are the third-most-popular reason people look for a new job (after higher pay and career advancement).
  • Workplace flexibility is one of the top reasons people accept new jobs.
  • 94% of respondents say they would benefit from work flexibility, with the top gains being less stress/improved mental health.
  • 30% say it would increase their overall productivity or efficiency at work.

To provide workplace flexibility in healthcare settings, brainstorm ways to offer employees greater:

Location flexibility via telehealth. Researchers have seen specialty telemedicine deployed to solve challenges such as “physician shortages, nurse burnout, patient retention, financial stability, and readmissions.” So expanding the use of telemedicine for your nurses and physicians empowers your team to see more patients without additional burdens on staff.

Telehealth work options increases healthcare employee retention

Rotating “on-demand” remote shifts gives everyone a day to trade their stressful commute for answering patient calls from home.

Scheduling flexibility. Automated shift scheduling software gives employees an overview of their schedules so they can easily organize and even swap shifts to facilitate a healthy work-life balance better.

Your organization will have constant shift coverage while employees have more autonomy in their work days, which is proving increasingly essential for retention.

If your organization lost nurses to travel nurse jobs, which boast greater flexibility, you could prevent others from leaving by adding more wiggle room to their work lives.

5. Invest In automation and AI solutions

Artificial intelligence (AI) and automation ease heavy workloads caused by healthcare staff shortages. This technology takes time-consuming, tedious tasks off your workers’ plates, makes processes more efficient, and contributes to better work environments. That equates to less burnout, greater productivity and engagement, and higher retention rates.

The most commonly used AI and automation tools in healthcare settings include:

  • Patient management automation
  • Chatbots for communication with patients
  • Medical record automation and AI-aided documentation for regulatory and reimbursement
  • Resource planning with AI models
  • AI-driven triage and expediting treatment solutions

Experts say AI prioritization allows your team to “deploy its existing human resources more efficiently, empower cross-specialty collaboration, connect disparate departments facing data silos, and shorten or eliminate the manual process of patient management.”

As your organization intelligently automates more operations, you’ll lighten the workloads of your understaffed teams, lower the potential for burnout, and increase job satisfaction and loyalty.

6. Prioritize employee mental health & well-being initiatives

Mental health and physical wellness programs mitigate the chances of employees succumbing to burnout. These initiatives ensure that your physicians, nurses, and other healthcare workers feel mentally and emotionally supported. They also increase your employee’s resilience to stress, so they can better cope with rising demands during the workday.

To prioritize mental health in the workplace:

  • Hire a wellness coach to work with staff
  • Ensure no or low-cost access to mental health services
  • Offer subscriptions for meditation classes or apps
  • Maintain an open-door policy for transparent communication

At Mount Sinai Health System in New York, staff are offered individual mental health counseling sessions, group workshops, and access to their Wellness Hub app at no charge through their Center for Stress, Resilience, and Personal Growth program.

Mental health initiatives increase employee retention

While these initiatives will certainly support employee retention in healthcare, your organization must focus on alleviating the biggest contributing factor to burnout and turnover: overworking understaffed teams.

The risks of understaffed teams are much more significant for healthcare providers because they can lead to medical errors, poor patient outcomes, malpractice cases, and even higher patient mortality rates.

To prevent these consequences, it’s best to find a strategic partner to decrease your time-to-fill rates and secure qualified healthcare employees as soon as possible.

Relode’s strategies to source & recruit new talent

Most organizations hope a relatively small team of talent acquisition specialists with complex systems, little to no access to labor market data, and high req loads can build a qualified and inclusive workforce — while filling hundreds of critical jobs amid healthcare labor shortages.

But Relode offers a better solution for overcoming staffing shortages. We’re a technology platform leveraging human expertise, AI, and automation to give healthcare employers access to candidates not found on the typical job boards and scraped databases.

Our strategies for sourcing top talent include options that work for every business, such as:

Subscription sourcing

Our Subscription Sourcing saves teams hours of sourcing and connecting with hard-to-find candidates. Our growing pool of Relode-vetted, expert recruiters will source for you on-demand by leveraging the Relode platform. You’ll start your day with five Relode-Certified candidates on each of your reqs.

This perk empowers your teams to focus on creating stellar candidate experiences for the top talent we discover, educate, and vet against your requirements. You’ll also gain access to unprecedented insights into any barriers that exist to hiring your ideal employees and unlock lower markup rates for your contractors.

Learn what Subscription Sourcing includes here.

Subscription staffing

With Subscription Staffing, your team will gain access to the Relode platform, our real-time labor market insights, and full visibility into all candidates and recruiters working on your jobs. Our platform offers direct, real-time integrations with most ATS systems. You’ll also unlock lower markup rates for your contractors.

Learn what Subscription Staffing includes here.

Traditional staffing

We do staffing, but differently. We price reqs based on difficulty to fill, allowing us to charge success fees aligned with the complexity of filling your req. This service has no upfront commitments, and we offer a 30-day guarantee period. However, it’s also our most expensive solution.

Learn what Traditional Staffing includes here.

Relode combines the power of technology with the work ethic of a boutique staffing firm to quickly deliver high-quality, vetted candidates and/or contractors that meet your requirements at scale. It’s the fastest way to get new employees on shift and keep your existing workforce engaged, loyal, and working to their highest potential.

Check out this quick video explaining how we can make hiring better for your organization next.