Twice annually, SIA analyzes the market dynamics across skill segments in its US Staffing Industry Forecast: September 2024 Update 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 significant workforce shortages, an increase in the use of contingent workers and elevated levels of burnout and financial pressures, followed by a close return to pre-pandemic levels.

After growing more than three times its pre-pandemic size, the healthcare staffing sector experienced a decline in market size for the first time since 2010, contracting by 22% in 2023, driven by a 36% drop in the travel nurse segment and a 25% 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 continued nursing shortage estimated at more than 190,000 per year, according to the US Bureau of Labor Statistics, as well as the substantial regional variations in registered nurse supply and demand.

The per diem segment contracted by 25% in 2023 and SIA estimates further contraction in 2024. Headwinds include regulations applicable to the long-term care industry as well as competition from talent platforms utilizing a 1099 model. Tailwinds for this segment include talent preferences for flexible staffing models as well as strong demand from skilled nursing facilities, whose employment levels have not recovered from the pandemic.

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 certified registered nurse anesthetists and internal medicine physicians that cater to the aging population.

SIA estimated the allied segment also experienced growth in 2023 but will decline by 18% in 2024 as healthcare clients reduced bill rates in many specialties, although imaging and therapy remain elevated. The aging population is a key driver behind heightened allied demand. Growth in the allied segment is primarily due to the aging population who requires specialized treatment that is delivered via new technologies that are operated by allied healthcare professionals.

Despite the overall contraction in the market, healthcare staffing continues to be the dominant sector within the US with persistent demand for medical services within this industry. Health system margins continue to improve, and publicly traded hospitals like Tenet and HCA confirmed an increase in census and higher acuity. For more insight into the healthcare staffing market, SIA corporate members can read the US Staffing Industry Forecast: September 2024 Update.