Will bonuses and benefits be enough to tackle healthcare's workforce shortages?

Female nurse looking stressed
Labor, staffing and benefits experts said there's no "magic bullet" of benefits or bonuses that will solve a hospital's retention issues. Healthcare organizations will only be able to maintain their numbers by focusing on safety, culture change and scheduling, they said. (Getty/gpointstudio)

The provider industry is caught in the midst of a widespread labor crunch that, according to recent data, shows no sign of slowing down in the months and years to come.

At best, the shortage of workers has led to incremental increases in labor expenses and warnings to investors that margins may run a bit tighter in the coming quarters.

At worst, understaffed units, rampant overtime and burnout are leading a growing number of nurses and other healthcare workers to retire or transition to another industry.

These shortages have also fueled labor disputes from New York to California, the results of which are often worker strikes and subsequent disruptions in patient care.

The short- and long-term threats of understaffing have led several systems to open their wallets.

Among the most prominent of these efforts came from Washington-based Providence, which announced this month that it would be investing more than $220 million into various bonuses and pay adjustments in an effort to retain its more than 120,000 employees and fill its roughly 17,000 job openings. Recent weeks have also seen reports of five-figure signing bonuses for nurses and a return of the workforcewide retention bonuses that were common during the first year of the pandemic.

Alongside a hiring push, a recent survey of 150 health systems conducted by professional services firm Aon suggested that more healthcare employers are adopting a broader portfolio of benefits for their workforces. With 93% of respondents saying they are considering benefits strategies related to attracting and retaining workers, offers like tuition reimbursement and greater healthcare coverage have become commonplace in the competitive healthcare labor market.

“Attracting and retaining talent remains a top priority and health systems have prioritized benefits as a mechanism to reward their workforce,” Sheena Singh, senior vice president of Aon’s national healthcare industry practice, said in a statement accompanying the survey. “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.”

Unfortunately for hospitals and health systems, healthcare worker representatives and competing healthcare recruiters alike don’t see these strategies as more than a Band-Aid on a festering wound.

“It’s a temporary fix; people aren’t buying it,” Sal Rosselli, president of the California-based National Union of Healthcare Workers, said in relation to Providence’s incentives. “Workers are smart, they know what’s going on here.”

Rosselli said he doesn’t believe there is a shortage of registered nurses and other healthcare workers currently living in the U.S. The issue, he said, is that unsafe working conditions, employers’ inflexibility and an ever-growing focus on profits over patient care have led much of the country’s labor supply to seek out other opportunities where they feel more appropriately rewarded for their time and effort.

David Coppins, CEO and co-founder of healthcare staffing and scheduling platform IntelyCare, was of a similar mindset.

Health systems’ long-running view of nurses as a cost, rather than a revenue generator, has given hospitals a reverse incentive to skirt the line of understaffed units, he said. It’s driven an underlying culture across hospitals that's reduced workers’ voices and—along with the day-to-day struggles of the job itself—has many workers seeking alternatives.

With this in mind, Coppins said it’s little wonder that travel nursing agencies and per diem scheduling services like his have “exploded across the country” since the start of the pandemic.

RELATED: Providence invests $220M to bolster, retain workforce amid nationwide labor shortage

“We get a lot of disenfranchised hospital nurses that come to us and feel like they’re finally in control of their lives, and they get an opportunity to earn good money, control their schedule, they’re appreciated,” he said. “We have regular feedback sessions, and it’s kind of remarkable. We’re the beneficiaries of [hospitals’] poor activity, their inability to see the forest for the trees.”

But will hospitals’ retention bonuses and more generous benefits packages be able to stem the industry’s exodus of workers? For Coppins and Rosselli, the answer is a hard “no.”

“Look, most health systems have great benefits. I’m not going to say ‘oh, they need this type of retirement plan or a wellness service,’” Coppins said. “I’m sorry to burst the bubble, but there’s no magic bullet of certain benefits that are going to improve it. It’s fundamentally changing things.”

“Not absent having the security of safe staffing, the ability to make clinical decisions about how to provide care, having a voice, the staffing levels, how care is given and the assurances that the employer is doing everything they can to keep people safe around [personal protective equipment (PPE)] and staffing levels—not absent that, no,” Rosselli said. “People will not be making decisions based on higher 401(k)s.”

Singh was less willing to write off the value of an effective benefits offering, which she said can ensure employees “have the sufficient tools to thrive within the organization and their life.”

Citing her company’s survey data, she noted that many employees don’t know when their employer is providing benefits offerings that directly address burnout, such as employee assistance programs or digital mental health tools. Most employers could be doing more to raise awareness of these offerings, thereby improving the wellness of their workforce and receiving the maximum return out of their benefits investments, she said.

Still, Singh agreed with the broader thesis that no individual benefits—either immediate or recurring—will be enough to make workers ignore any deep-seated grievances with an employer or the industry at large.

“There’s obviously short-term strategies that can be put in place like retention bonuses and spot bonuses that we’ve seen groups put in, but that’s not going to solve this issue,” she said. “I absolutely agree that really understanding if your culture is supporting retention from an investment-in-your-talent perspective, providing your employees a sense of purpose [and] also focusing on recognition of the value they bring to the organization is so critical to retaining your employees.

“Benefits is still very much a critical component to retention. It is not the one and only answer to that puzzle, though.”

RELATED: ANA urges HHS to declare national nurse staffing crisis, adopt new policies to bolster workforces

Giving employees a voice

It’s one thing to tell employees that they are valued and another to make them believe it, Coppins said. Eighteen months of thank-you’s from executives are now ringing hollow for workers who have seen few meaningful signs of relief during their day-to-day hardships.

“One of the big problems is their answer is ‘You’re a hero. You can do it, you are amazing.’ They give them plaques, they give them recognition, they buy them pizza and they think that this is actually solving the problem,” he said. “I was at a conference a couple of weeks ago and the CEOs of major health systems were on the panel in a conversation on shortage of staff. Two of the CEOs actually said we need to provide more recognition, more appreciation. I’m in the audience thinking ‘Dude, you’ve still got your head in the sand.’”

For starters, healthcare organizations need to demonstrate that workers' safety and well-being are prioritized, Rosselli said. During a pandemic, this means adequate PPE, COVID-19 testing, proper training, safe staffing, mental health care and other “minimum precautions and protocols” need to be put in place to keep workers from quitting out of concern for their own safety, he said.

Rosselli and Coppins also stressed the limited avenues nurses and other front-line workers have to raise concerns regarding administrative and clinical issues.

To address this, Coppins suggested organizations introduce programs that give those workers more opportunities to rub shoulders with decision-makers and propose solutions to organization-wide issues. Internal hackathons, for instance, “can be brilliant and really valuable to help the nurses feel like they’re being heard and have an opportunity to change things,” he said.

But perhaps more meaningful to the workforce is demonstrating that an organization is willing and able to elevate deserving front-line employees into the C-suite, Coppins continued.

“Put nurses in executive roles—not just a titular position with no authority, but actually put someone whose grown up through the nursing ranks into executive roles that have authority in the hospital system,” he said. “That does a couple of things. One, you finally get their perspective when decisions are being made, a seat at the table. Two, it’s also visibility for other nurses to know that they’re being heard and there’s a potential career path for them.”

RELATED: As NNU blames hospital cost cutting for labor shortage, industry groups keep the focus on COVID-19

For workplaces with an active labor union, Rosselli stressed that these groups are, at their core, a forum for employees to communicate their interests with an employer.

The union leader pointed to labor-management partnerships as a proven vehicle for healthcare organizations to promote constructive discussions between workers and executives, increase employees’ buy-in and, ultimately, improve the delivery of care.

“[Organizations must] collaborate with their workers and, in our case, their workers’ union,” Rosselli said. “That’s the answer: giving their workers a real voice.”

Flexible scheduling is a leading demand

While there’s no “magic bullet” benefit that will override cultural frustration and safety, Coppins and Singh did highlight one standout policy change for hospitals targeting worker burnout and retention: flexible scheduling.

“It’s too easy to underestimate the impact of truly inflexible scheduling, the workload and being ignored,” Coppins said. “It’s hard to really quantify the impact of that, but [hospitals] are seeing it right now [as] travel nursing has exploded across the country.”

Sixty-nine percent of healthcare employers surveyed by Aon acknowledged that flexible work options—whether that’s varied scheduling or more permissive time-off policies—are a frequent demand and need to be considered alongside the rest of a benefits package, Singh said.

Unfortunately, both she and Coppins acknowledged that introducing that flexibility to clinical staff is substantially more difficult for healthcare employers than other traditional benefits offerings, such as increased insurance coverage or student loan forgiveness.

“It’s really hard because most of these facilities are [using] scheduling platforms that make it very difficult to allow flexibility,” Coppins said. “But I will guarantee these hospitals that if they hired a scheduler—if they already have one, hire a second one—whose only job is to try and swap shifts to try and allow flexibility in the system, that will retain nurses. That’s the number one biggest thing: [Nurses] need to know that if there’s something big coming up in their lives they will have flexibility in their schedule.”

Despite their reputation for rigidity, Singh noted that healthcare organizations will overhaul entrenched operations and procedures when their backs are against the wall. Widespread resignations and open job listings could be just such an incentive.

“If you think about COVID, a lot of health systems … pivoted quickly with virtual health and telehealth, because they had to,” she said. "That’s why I think health systems are going to do this: They know it’s a need and they know it’s a certainty that if they don’t keep up they’re going to lose to other competitors, whether that’s another health system or a different industry. They’re going to make [flexible scheduling] happen, but that’s definitely going to be the one that’s the biggest lift.”