Staffing Industry Analysts estimates the healthcare staffing sector reached $68.7 billion in 2022, more than three times the market size in 2019. The Covid-19 pandemic contributed to the growth in travel nursing, per diem nursing, allied and locum tenens over the past three years, but demand for healthcare staffing is now less about Covid-related care and more about tight labor markets, turnover and attrition. This article briefly highlights recent trends in all four segments of the healthcare industry and SIA’s forecasts for 2023 and 2024.
Travel nurse. The travel nurse segment reached its peak in 2022, growing to more than six times its 2019 market size. SIA forecasts this segment will contract 30% in 2023 and continue to decrease by 5% in 2024. The travel nurse segment experienced extraordinary growth during 2021 and 2022 and the contraction in market size is more of a pullback after the peak brought on by intense demand related to the pandemic. Health systems are taking steps to reduce their contingent spend by decreasing their utilization of travel staff. However, reliance on staffing firms continues to play out in the healthcare staffing industry as demand for healthcare services remains elevated and vacancies from leaves, retirement and burnout persist.
Per diem. After another high-demand year for the per diem segment, SIA forecasts this segment will decrease by 8% in 2023 and normalize in 2024 with projected growth of 2%. This segment presents opportunities for health systems to fill open shifts on an as-needed basis without committing to a 13-week contract; this is particularly beneficial to the long-term care industry, which continues to experience challenges in recruitment and meeting patient demand. Additionally, per diem offers flexibility to healthcare professionals and opportunities to try out different settings before committing to a longer-term contract. Several staffing firms have also implemented staffing platform technology to expedite recruitment, onboarding and scheduling by automating tasks for both clients and talent. The rollout of this delivery model accounted for 22% of the healthcare staffing industry in 2022, according to SIA.
Locum tenens. In contrast to the declines in the other subsegments, SIA forecasts the locum tenens segment will grow by 12% in 2023 with continued growth in 2024. Growth in this segment is in part due to the aging population that will demand more medical services for chronic and complex illnesses that will require treatment from a physician. Additionally, a large portion of the physician workforce is approaching retirement age, which is eroding the supply of physicians. Lastly, advanced-practice providers are expected to remain in high demand as they fill gaps within the workforce and move towards a team-based model. Staffing firms have been leveraging their talent pools and wide reach to secure locum tenens for their clients in need.
Allied. After robust demand in 2021 and 2022, SIA forecasts the allied segment will contract by 3% in 2023 and decrease by 5% in 2024.
Demand for allied is partly attributed to schools leaning on staffing firms to plug holes in their school year, such as speech language pathologists and school psychologists. Additionally, the aging population continues to drive demand for healthcare services from cardiovascular technologists, clinical lab technicians and other allied healthcare professionals who operate specialized equipment to diagnose and treat conditions associated with aging.
There is a continued imbalance of demand over supply when it comes to jobs in the healthcare sector. With an aging population driving demand for healthcare services, an overstretched workforce and seasonality, it is likely health systems will continue to rely on those staffing firms that can best solve their workforce challenges.
For more insight into SIA’s market size and growth estimates in the US temporary staffing industry, see SIA’s US Staffing Industry Forecast.
