Twice annually, SIA analyzes the market dynamics across skill segments in its US Staffing Industry Forecast report. This article provides a high-level overview of SIA’s forecast specific to the healthcare sector, which experienced several transformative years. In recent years, the sector has experienced widespread workforce shortages, increased utilization of contingent workers, increased burnout and financial pressures, and finally a pullback to more normalized levels. SIA estimates the market contracted by 24% last year.

After growing more than three times its pre-pandemic size, the healthcare staffing sector experienced its first year of normalization in 2023, contracting by 24%, driven by a 40% drop in the travel nurse segment and a 22% decrease in the per diem segment as volumes trended downwards and pay rates continued to push down. There are, however, tailwinds for the travel nurse segment such as the nursing shortage, the continued imbalance of demand over supply and increased patient demand as more individuals return to normal healthcare routines.

The per diem segment contracted by 22% in 2023, and SIA estimates further contraction in 2024. Tailwinds for this segment include talent preferences for flexible staffing models — part time/on demand — and robust demand in the long-term care sector, which was the hardest hit during the pandemic and the slowest to return to pre-pandemic levels of staffing.

The locum tenens segment had another very strong year in 2023 and SIA estimates further growth this year, driven by elevated volume and increased pay rates for certain specialties, such as surgery and occupations that provide services to the aging population.

SIA estimated the allied segment also experienced growth in 2023 but will decline modestly in 2024 as healthcare clients seek to find a balance between cost control and meeting patient demand. The aging population is a key driver behind heightened allied demand.

Despite the overall contraction in the market, healthcare staffing remains the largest segment of the US staffing industry. Health system margins are showing signs of improvement with many executives forecasting rising levels of services this year. As the economy improves and consumer confidence is more optimistic, it is also possible that more clinicians will consider travel assignments. For more insight into the healthcare staffing market, SIA corporate members can read the US Staffing Industry Forecast.