One hospital is helping nursing students graduate. Another is offering $100,000 signing bonuses.
To fight severe staffing shortages and lessen the use of contract labor, hospitals are updating their strategies to recruit and retrain front-line employees, especially nurses, and the efforts are working.
Still, the battle to fill open positions poses a nearly insurmountable challenge for smaller hospitals, particularly those in rural communities, that don't have the means to match, much less beat the packages offered by larger systems.
Across the board, wage inflation has eroded health systems’ operating margins and significantly increased payroll expenses.
“These inflationary pressures are mounting against small rural hospitals who really don't have the deeper pockets of larger health systems and more urban hospitals to weather the storm,” said Michael Topchik, national leader of the Chartis Center for Rural Health.
Even state governments are getting involved in the effort to keep jobs filled. In California, the state’s Department of Health Care Services has started handing out a total of $1 billion in one-time retention payments as a way to incentivize healthcare workers to stay at their current facility.
Here are some of the strategies being used to woo and keep workers.
Focus on the work environment
At Citizens Memorial Hospital, a small facility in Bolivar, Missouri, with 86 beds and a large Medicare and Medicaid population, one of the greatest hurdles has been its inability to offer competitive pay, said Sarah Hanak, the hospital’s chief nursing officer.
“I swear every time I turn around, just when I think we're getting a little bit of an edge, there are other local hospitals bumping up their pay,” Hanak said. “It has been like that consistently for the last three years.”
Nursing wages in the region have gone from $21 an hour base pay in 2020 to $28 in 2023 for a new nurse with no experience, she said. During the height of the pandemic, Citizens Memorial was paying nurses $50 an hour while larger hospitals nearby were paying $90 an hour.
This year, Hanak said she is proposing a $1.4 million increase in nurse wages. “We can't afford to do it,” she said. “But we can't afford not to.”
Because Citizens Memorial doesn’t have the cash on hand to immediately boost pay, it is focusing on employee development and engagement in addition to financial incentives, Hanak said.
“We have to work even harder at making this a desirable place to work through building great relationships and ensuring that we have good nurse-to-patient ratios,” she said. “We have to find ways to provide things that the bigger places can't that are outside the dollar.”
The hospital is working to implement a shared governance model where front-line nurses provide input on patient care practices, and recently launched a nurse residency program.
For the initiative, Citizens Memorial is partnering with local schools to mentor and pay nursing students to complete the clinical hours they need in exchange for a commitment to work at the hospital after graduation.
“People aren't going to be as interested in going for $2 more down the road because they're satisfied with where they are,” said Brock Slabach, chief operations officer with the National Rural Health Association. "The pay isn't the only variable in terms of a [successful] employee retention plan.”
Lead the market in bonuses
Palomar Health, based in Escondido, California, recently began offering nurses $100,000 in bounuses if they agree to stay with the system for three years.
Each year, nurses will receive one-third of the $100,000 payout. There are no clawback provisions in the program.
“We have been struggling to fill positions just like everyone else,” said CEO Diane Hansen. “We were definitely not one of the organizations in our region that was paying the highest wages. This program puts us in a position where we're leading the market now.”
Palomar is spending between $40 million and $50 million a year on more than 180 contract nurses in addition to expenses related to overtime and turnover, she said. The system's leaders hope the bonuses will attract new employees and stabilize the nursing workforce while reducing overall costs.
Since announcing the program, the health system has had many of its current permanent and traveler nurses sign up for the three-year commitment, and also seen an influx of new candidates, Hansen said.
Palomar Health is also offering referral bonuses of up to $10,000 and may adjust its wage categories to keep paying current employees competitive rates.
“We know that we can't continue to pay these kinds of bonuses into the long-term future, but we do know that right now, while we're in a nursing shortage, this is probably the best opportunity for us to get out ahead of all of the contract labor costs that we're experiencing,” Hansen said.
Cast a wide recruitment net
For Catholic Health, a system based in Buffalo, New York, one solution to the hiring challenges has been to bring together members from talent acquisition, operations, marketing and finance to create a team focused on recruitment activities.
The team was able to shorten the system’s recruitment process by setting up large employment events and finding creative ways to advertise open positions on social media, television and radio stations in the Buffalo area, said Bill Pryor, chief administrative officer.
The efforts have paid off. Last year Catholic Health hired 2,900 new employees, including 620 registered nurses, Pryor said.
After extending its referral bonus program to offer referral payments to members of the surrounding community, the system went from getting around 60 new hires annually from referrals to nearly 290, he said.
Catholic Health has also offered sign-on bonuses, reevaluated its pay and hiring practices, partnered with local colleges and universities and created its own internal staffing agency to boost its staffing pipeline.
Like other systems, Catholic Health has filled several positions by hiring nurses to become part of its internal agency for a period of 12 to 15 weeks, Pryor said. The nurses are paid less than external travel agency nurses, and more than staff nurses.
Providing new hires with adequate onboarding training and resources, conducting employee engagement surveys and maintaining good relationships with unions for retention advice are all key to figuring out the best ways to retain staff, he said.
“What can we afford, and what is really helping retain our associates,” Pryor said. “We're all monitoring what is working, what is not working and what should we continue to do?”
