US Healthcare Staffing Market Assessment: 2024 Update
US Healthcare Staffing Market Assessment: 2024 Update
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US Healthcare Staffing Market Assessment: 2024 Update
Key Findings:
•The level of job openings for the healthcare and social assistance sector has increased by 48% from 1.2 million in 2019 to 1.8 million in 2023, according to the Bureau of Labor Statistics. The high level of job openings reflects the imbalance of medical services demand exceeding clinician supply and is also boosted by the high level of quits, as clinicians seek new positions with better pay, better working conditions, or opt to retire or leave the industry.
•The level of hires in healthcare and social assistance increased by 27%, from 625K in 2019 to 794K in 2023. Quits however, have increased by 31% from 406K in 2019 to 533K in 2023. The effects of the pandemic on healthcare workers magnified fatigue and overload, prompting a wave of retirements and early departures from the field.
•After a turbulent 2022 and 2023, health system operating margins are showing signs of improvement. A deeper dive into the operating margins, as reported by Kaufmann Hall, reveals that 60% of US hospitals have increased profits in 2024. This is partly due to hospitals with aggressive reductions in contract labor leading to higher profitability. This may be a negative for staffing firms in the near term, however, the increase in clients with improved financial positions, may result in more stability and increased future business.
•Policy limits on immigration are constraining the number of clinicians from other countries that could be added to the US healthcare workforce. Nevertheless, there are opportunities for staffing firms to focus efforts on international recruitment including sponsoring the adjustment of status for immigrants currently working/living in the US. As these immigrants are already immersed in the labor market, there is opportunity to sponsor temporary visas with permanent visas (LPR).
•In a sharp contrast from the massive growth experienced in 2021 and 2022, the healthcare staffing segment declined 24% last year, driven by a 40% drop in the Travel Nurse segment and a 22% decrease in the Per Diem Nurse segment, as volumes continued to normalize downwards and pay rates decreased. Nevertheless, despite the contraction, healthcare staffing remains the largest segment of the US staffing industry as reported in SIA’s March 2024 US Staffing Industry Forecast.
•As demand has declined from the peak experienced during the pandemic, the pay rates that drew nurses to travel have begun to normalize. Nevertheless, the aggregate percentage of revenue made up by hourly wages, bonuses, payroll taxes continues to be the largest percentage of a travelers pay package - from 38.0% of bill rate in 2019 to 48.4% of bill rate in 2023, according to findings from the SIA NATHO Travel Nurse Benchmarking Historical Trends report.
•The average travel nurse bill rate declined substantially, from $133.47 in 2022 to $106.78 in 2023. The decline was mostly due to some normalizing after a surge in bill rates during the pandemic.
•According to SIA’s travel nurse survey, many of the burned-out nurses state they are unlikely to continue as travel nurses, translating to 9% of today’s travel nurse workforce potentially exiting within a year.
•In terms of employment settings, nursing and residential care employment has not recovered since the onset of the pandemic as of March 2024. Although the sector did add 18,000 new jobs in March, total employment in nursing and residential care facilities is approximately 220,000 jobs (7%) below pre-pandemic levels of employment, according to the Bureau of Labor Statistics. On a positive note, 2023 wage growth in health care settings was highest in nursing and residential care, at 4.0% year over year.
•Home health and personal care aides, nurse practitioners, and medical and health services managers are three occupations that are projected to experience both large increases in employment as well as rapid growth, according to the Bureau of Labor Statistics employment outlook. Drivers of growth include the aging population and increased demand from individuals with chronic conditions, such as heart disease and cancer.
•Technology advances are also a central focus for today’s healthcare staffing firms. Business processes unique to the staffing industry were typically organized into three main categories: Front, Middle and Back Office. The tech stack now extends into a broader ecosystem of applications and point solutions - reporting solutions, office automation, candidate and client-facing portals - as staffing companies seek to engage more closely with candidates, workers and clients.
•The scalability of the staffing platform model became a clear competitive advantage with an unprecedented spike in demand. The US staffing platform market for travel nurses soared by 340% from 2020 to 2022. Platforms today represent more than 20% of US temporary staffing revenue for travel nurses, per diem and allied. The platform market for locum tenens staffing, though still quite small, may be the next segment to see substantial growth in the use of a platform model.
This report is our annual broad assessment of the US healthcare staffing marketplace. Readers can use this report to gain a more detailed understanding of the market.
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