July 27, 2017

The “New” New Normal: Healthcare Professionals Demand (and Get) Higher Salaries

By Kay Linder, Partner and Practice Lead, Healthcare Technology & Innovation

The Great Recession of 2008-09 is over – in fact, it’s been nine years. In 2016, the U.S. saw 2.2 million jobs added to the national economy [1] (in addition to a 2.7 million increase the year before). Clearly, job seekers are in the driver’s seat today compared to nine years ago.

Several high-skill job sectors, including healthcare, are riding the crest of the post-recession boom and currently show an excellent prognosis for well-paid employment growth going forward. While healthcare employees may have been willing to settle for a lower salary following the recession, the recent economic uptick has empowered healthcare workers to demand and receive higher wages and better benefits. It’s a “seller’s market” across the industry.

A recent industry report [2] notes: “Healthcare employment is on a roll, with hospitals and other healthcare providers adding 374,000 new jobs last year and healthcare unemployment at 2.6 percent — its lowest level in nearly nine years.”

The 2017 Healthcare Recruiting Trends Report [3] shows a 23-percent bump in healthcare employment postings; in fact, around 30 percent of healthcare recruiters say they’ll spend more on new hires in 2017 over last year.

As healthcare employment demand begins to outpace supply, savvy hiring managers are shifting strategies and adding signing bonuses or relocation reimbursement to job packages. But more attractive offerings may not stem the tide: many niche employment classifications long associated with the healthcare industry – data analytics and performance improvement – have migrated to a wider range of employment sectors, placing an even greater strain on the supply of skilled healthcare workers. As organizations continue to undergo disruptive change, the division between healthcare providers and payor marketplaces has slowly been erased. Professionals may work in either sector or both over their careers and migration between the two sectors is growing.

Given the recent data, healthcare hiring managers face an uphill battle in attracting and retaining the best employees. Potential recruits expect to be dazzled by your organization; in fact, 92 percent of recent survey respondents stated that “employer branding is the ticket to attracting talent.” However, these same employers tend not to be spending enough money on branding: the survey noted that “only 43 percent of employers address [employee branding] with a dedicated budget and only 44 percent have someone specifically in charge of that function.”

Smart hiring managers leverage all of their strengths when seeking (and retaining) the best team members – whether it’s enhanced salary packages, bonuses, or superior insurance coverage.

A report by the Society of Human Resources Managers [4] notes that a mix of benefits and other perks will continue to grow in scope: About two-thirds of HR professionals indicated professional and career development (70%) and health care (68%) benefits will increase in importance to retain high-performing employees in the next three to five years.”

Given the proximity many healthcare organizations have with wellness systems, offering a wellness package (free membership, incentive programs, etc.) is another way you can attract talented employees. Across all industries, the SHRM found that “more than one-half (53%) of HR professionals anticipated wellness and preventive health benefits will increase in importance to retain employees at all levels of the organization in the next three to five years.”

Yes, all of these things cost money, but how much more would your organization lose by retaining incompetent or unmotivated staff? Managers can also attract the best of the best by leveraging local resources – in other words, become the loudest cheerleader of your region. What natural resources does your region offer? How about cultural events? Sports teams? Why would high-caliber employees want to live in your community? As the old saying goes, sell the steak and the sizzle.

And speaking of your best resources, are your data analytics healthy? It may be time for a systems checkup to ensure that your applicant tracking system is optimized, as well as key salary comparison data sets. By working with a top recruiting firm [5], your organization can enhance and modernize your entire hiring and recruiting system and avoid key mistakes such as utilizing outdated data, downplaying your brand, or miscommunicating salary expectations.

A final, sobering response from the survey: higher salary demands stopped more than half of all employers from filling key positions. That means these organizations may have to keep positions open for months. Thriving in a post-recession, high-demand employment world requires planning, proactive strategies, and creativity. How will your organization respond?

Kay Linder, CPC

Kay Linder, CPC

Kay Linder is a Partner focusing in recruiting in both the Healthcare Innovation and Nonprofit verticals at ThinkingAhead. Kay started at ThinkingAhead’s Nashville corporate offices...

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