Hospitals ramp up hiring, benefits offerings to counter the workforce shortage, survey says

Forty percent of health systems said they were accelerating their hiring as of this spring, according to a new industry survey. This represents a stark contrast to 2020 when lockdown-induced cost-cutting spurred furloughs, layoffs and suspended benefits. (Getty/LittleBee80)

With staffing shortages in full swing across the industry, many hospitals say they are focusing on hiring efforts and benefits offerings in a bid to bolster and retain their workforces.

In a recent survey of 150 health systems from professional services firm Aon, 40% of respondents said they have accelerated hiring during the spring in response to growing demand.

Thirty-six percent said they were maintaining their normal hiring practices while the remaining 24% said they were either hiring cautiously, delaying hiring or instituting a full freeze.

This is a marked turnaround from the previous year’s survey, Aon noted, when lockdown-induced cost-cutting led respondents to report widespread furloughs (54%), layoffs (45%), buyouts (10%) and suspended retirement plan contributions (15%).

“The top priority in 2020 was to mitigate rising costs for the employer—understandably, given the financial shock that health systems were reeling from,” Sheena Singh, senior vice president of Aon’s national healthcare industry practice, said in a statement. “Now, the pandemic has exacerbated a labor shortage that could impact patient care delivery, delay attainment of organizational objectives and accelerate burnout among clinical staff.”

Hospital and health system employers largely said they are mindful of issues that could affect their workforce, chief among which were employee burnout (77%), work-life balance (76%), financial stressors (75%) and support for diversity, equity and inclusion benefits (73%).

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At the same time, many respondents said they consider strategies related to attracting and retaining high-quality talent (93%), developing existing talent (86%) and improving workforce well-being (77%) to be key factors in successful long-term business performance.

These responses outpaced those lauding strategies around increasing workforce productivity (69%), fostering more innovation (65%) and launching new products or services (49%).

The survey respondents also highlighted a broad list of benefits they are offering to employees. Tuition reimbursement programs were the most common of these by a long shot (94%), followed by flexible work options (69%) and cash-out vacation policies (66%).

Not to be lost among these are increases to health benefits spending. According to the report, average health benefit expenses are projected to grow 2.7% per employee for 2021, largely driven by deferred medical services from the previous year.

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Seventy-seven percent of the hospital employers said they are looking to cover more than three-quarters of their employees’ healthcare costs, while 23% said they are offering a no-cost option to at least some of their workforce.

“Attracting and retaining talent remains a top priority and health systems have prioritized benefits as a mechanism to reward their workforce,” Singh said. “This is a trend that will continue with a shortage of qualified health professionals and rising demand for health care services, as these organizations seek to build a resilient workforce in the wake of the COVID-19 pandemic.”

Hospital executives have highlighted mounting labor expenses as a substantial burden on their bottom lines; a recent McKinsey survey, for instance, revealed year-over-year increases in nursing turnover and vacancy rates and plans to increase wages to offset those losses.

Although the pandemic is broadly acknowledged to have been a contributing factor to the healthcare worker shortage, one national union recently put the blame on hospitals’ overzealous cost-cutting measures, which they say raised safety concerns and drove nurses away from hands-on care.

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