Healthcare employment agencies are reevaluating their strategies as interest in travel nurses wanes among both hospitals and workers.
It's another sign of the shifting needs of the industry since the height of the COVID-19 pandemic. Testing firms have laid off workers or folded. Telehealth companies have been challenged.
Related article: Health systems turning to ‘gig nurses’ to ease staffing issues
Employment firms, which quickly pivoted to create a marketplace for temporary clinical help amid pandemic-related staffing shortages, benefited from the lucrative hourly rates commanded by travel nurses — wages begrudgingly accepted by hospitals.
Now, however, employers are reducing their budgets for travel staff and spending more to recruit and retain permanent employees, which in turn is lowering demand and pay rates for contract workers. The shifting dynamics have required employment firms to make another pivot, adopting more technology to guide employers and helping workers manage their careers.
A survey of more than 3,300 registered nurses this month from employment firm Incredible Health found nurses' interest in travel positions have decreased by 22% from 2023. The report also found that 67% of health executives surveyed have not increased travel nurse positions in the last year.
"With permanent nurse wages going up, as well as travel nurse wages going down, you're [going to] have more nurses who want to stay in permanent [positions,]" said Dr. Iman Abuzeid, Incredible Health's CEO and co-founder.
In fact, many are taking a cleaver to contract labor spending.
Franklin, Tennessee-based Community Health Systems said it spent an estimated $48 million on contract labor in 2024's first quarter. That compared with an estimated $85 million in the first quarter of 2023.
Similarly, Dallas-based Tenet Healthcare reported its consolidated contract labor expense made up 2.9% of its first-quarter spending on salaries, wages and benefits, compared with 6% in the year-earlier period.
"The reductions in costs reflect the disciplined approach that we take towards labor management," said Sun Park, Tenet's executive vice president and chief financial officer, said during an earnings call with financial analysts.
Agencies geared toward travel positions may have to pivot operations to stay in the game, according to Joel Tremblay, president of staffing company Medical Solutions.
For Medical Solutions, the key to staying ahead of the competition is keeping a pulse on what health systems and hospitals need in terms of staffing and continuing to adapt their business model accordingly, offering permanent, per diem or travel staff as needed. The company launched in 2001 as a travel nursing company and has since expanded to offer a broader range of healthcare staffing services.
Incredible Health is banking on career-long services that include online support community, an artificial intelligence resume builder, salary estimators, continuing education and an online support community.
Staffing company AMN Healthcare is investing in technology, including the use of predictive artificial intelligence to help its clients calculate their staffing ratio needs for the greatest possible efficiency.
"We really see a great need for that, for us to help give [clients] those insights and make their job easier with technology and predictive analytics," said Robin Johnson, AMN group president of nursing and allied solutions.
AMN found in its 2024 Nursing Leadership report that most nursing leaders are aiming for 72% of their nursing staff to be permanent employees.
