Healthcare added more than 650,000 jobs last year. How many of those new hires signed a noncompete agreement with their employment contract when they walked through the door?
Among physicians, it was plenty, according to the American Medical Association. The trade group estimates as many as 45% of physicians are bound by such agreements.
Related: How the FTC noncompete ban affects nonprofit providers
The Federal Trade Commission voted last month to finalize a rule nullifying existing noncompetes for all but senior executives and preventing new ones for any employee. The ban is likely to affect some nonprofit health organizations, depending on their structure.
The FTC’s decision was immediately challenged in the courts, and that process is likely to be lengthy and delay implementation. In the meantime, what happens to already-competitive recruitment and retention activities? To use a real estate analogy, it just became even more of a buyer’s market.
Fitch Ratings called the rule a complication that could add to nonprofit health systems’ staffing woes. I’ll say so. Consider how much crosstown competitors may up the ante trying to woo the best and brightest from one side of town to the other. And the hospitals, along with their patients, in struggling communities that lose out entirely because their human resources executives simply can’t afford to play the game.
Given the limbo hiring managers may be in while the legal issues are thrashed out, one corporate recruiter I talked with said he’s advising his employer clients to do more than dangle lucrative compensation packages before candidates. He’s telling them to demonstrate why they’re a good place to work, starting with a positive interview process. At a time when healthcare is in such a hurry to hire, the niceties like scheduling interviews off-hours can get overlooked. Financial creativity, he told me, can include retention bonuses and possibly even offering tuition reimbursement for the job candidate’s children.
See what I mean about a buyer’s market? Of course, the higher salaries and other perquisites are hard to take back once they’re made part of the process. That will add to the wage inflation healthcare employers are finally tempering with less reliance on contract workers.
Job candidates need to balance an ability to negotiate the best deal with remembering why they got into healthcare in the first place. How much more competitive will hiring get — and who really benefits? I guess we’re about to find out.
