Healthcare organizations hiring, retaining more employees: Fitch

Hospital employment numbers have increased, while healthcare job openings are on the decline—though the industry is still recovering from the effects of the COVID-19 pandemic. 

About 17.2 million individuals were on the payroll at healthcare organizations in November 2023, compared with 16.6 million in December 2022, according to the latest data from the Bureau of Labor Statistics.

Related: What health systems did this year to recruit, retain workers

Employers in the hospital and ambulatory healthcare services sectors filled an average of 15,830 and 27,160 jobs a month, respectively, over that time period, a Wednesday report from Fitch Ratings found. In the prior 12-month period, hospitals added an average of 10,470 jobs per month and ambulatory healthcare service facilities added an average of 24,640. The numbers represent full-time, part-time, permanent and temporary positions.

Using BLS data, the Fitch report found that the rate of job openings in the healthcare and social assistance sectors—calculated by dividing the number of job openings by the sum of all filled and unfilled jobs—decreased from a peak of 9.3% in March 2022 to 6.4% in October, the lowest it has been since early 2021. The average rate of employees quitting has also decreased in recent months, from a recent peak of 2.9% in May 2023 to 2.3% in October, the report found.

Some health systems have cut roles, citing operational and financial challenges.

Fewer open positions and lower rates of staff quitting are likely due to hospitals focusing on increased wages as a way to incentivize full-time positions over contract labor work, said Richard Park, director at Fitch Ratings.

“This indicates that people are not voluntarily moving from one hospital system to another as regularly, which is a good sign, especially [because] training and getting a full-time employee up to speed at a hospital can take quite a bit of time,” Park said. 

Despite the improvement, the industry has a way to go before the market returns to pre-pandemic levels, Park said.

In particular, the exodus of skilled healthcare workers over the course of the pandemic and resulting shortage of clinicians has led to hospitals offering higher wages to stay competitive. 

Though wage growth has begun to flatten in recent months, hospital pay will probably remain elevated compared to pre-pandemic rates, Park said. 

Between June and October, hospital employees have seen an average 4% increase in hourly earnings compared with the previous year, down slightly from an average year-over-year difference of 4.8% in the first half of 2023, according to Fitch. From 2010 through 2019, the average year-over-year wage growth was around 2.3% for hospital staff. 

Hospitals are working toward complete operational efficiency to make use of the employees they have, allowing nurses to practice at the top of their license, utilizing virtual and home health care, improving their technology infrastructures and working to discharge patients in a timely manner, all with an eye toward maximizing their investments in staff, Park said. 

Increasing union activity is another factor pressuring health systems to offer higher rates of pay. 

“Work environments over the past few years have made it so that workers are looking for favorable working conditions and wages,” Park said. “With those demands as well as the tight labor market, unions are entering negotiating periods in a very favorable position, with increased bargaining power.”

On Tuesday, several hundred nurses at Ascension Saint Joseph-Joliet, in Illinois, voted to reject a contract proposal from the health system, claiming in a statement on social media that the proposed wages were below market standards.

In a statement, Ascension Saint Joseph-Joliet said ratifying the contract would have led to a wage increase of up to 19% for registered nurses. 

In Southern California, more than 1,800 frontline healthcare workers at four Prime Healthcare facilities are striking over the Christmas holiday, advocating for safe staffing levels and support from the system to attract and retain hospital workers.