Survey report indicates upward pressure on compensation for hourly employees due to health care workforce crisis
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December 7, 2023 – CHICAGO – SullivanCotter, the nation’s leading independent consulting firm in the assessment and development of total rewards programs, workforce solutions, and data products for health care and not-for-profits, has released the findings from its 2023 Health Care Staff Compensation Survey Report.
Despite annual salary budget increases returning to pre-pandemic levels of 3.0% to 3.5%, the report finds that actual median base hourly pay across all jobs nationally increased by 5.3% in 2023 – continuing the growth trend experienced in the prior two years. The most significant gains are in the South Central and Southeast regions, which go beyond the national median at 8.0% and 6.2%, respectively. When looking specifically at registered nurses (RNs), most regions are also seeing increases in base hourly rates well above the national median increase rate for all jobs of 5.3%, with RN pay growth in the South Central region reaching double-digits at 13.4%.
With findings reported from over 1,630 organizations representing more than 600 positions and approximately 1.4 million individuals, SullivanCotter’s dataset represents the largest and most comprehensive health care staff compensation resource for hospitals and health systems.
Health care organizations nationwide continue to grapple with a number of external market forces that are shaping how they operate. Labor shortages amidst growing staff and provider burnout remain an issue and are creating upward pressure on compensation to help organizations attract and retain staff and hourly employees in a tight market for talent.
Significant Increases in Median Base Pay
Many new roles demonstrated high percentage increases on both the clinical and non-clinical sides. On average, pay for some clinical jobs increased more than 11% from last year. While Certified Medical Assistant (9.3%) remains from last year’s list, RN Surgical Services (13.0%), Surgical Technologist First Assistant (10.1%), RN Ambulatory/Outpatient Care (9.5%), and EKG Technician (9.1%) are all new entrants seeing significant market movement compared to last year when they ranged from 3.0% to 8.0%.
Historical pay change levels have not been as high for non-clinical jobs as compared to clinical jobs. The exception is the recruiting and retention function, which remains an important priority for many organizations. This year, the median base pay for the Talent Acquisition Specialist role increased by 14.0% – landing itself just under Wellness Program Coordinator (17.9%) on the high-growth list.
Premium Pay Practices
Most organizations recognize the need to pay premiums to compensate for less desirable shifts and ensure full staffing. More than 80% of organizations offer premium pay programs. Of those, roughly 80% pay premiums as flat dollar amounts, while most others utilize percentages of hourly rates. Premium pay eligibility is more widespread for the clinical job group and more frequently paid due to the nature of staffing those jobs. Bedside RNs and Clinical Pharmacists have some of the highest rates.
Change in Internal Minimum Pay Rates
90% of organizations have an internal minimum pay rate that is higher than the federal, state, and local minimum wage. In 2022, there was a significant rise in organizations choosing to increase their internal minimum rate above the federal, state, or local minimum – from 64% in 2021 to 82% in 2022. The trend continued in this year’s survey, with a staggering 90.4% of respondents setting internal minimum rates above federal, state, or local minimums. “The establishment of internal minimum rates at a higher level has become a necessity for many organizations as they compete for employees within an increasingly competitive marketplace. Additional market pressures such as specific health care wage requirements, pay equity initiatives, collective bargaining pressures and pay transparency requirements are also driving wages up,” said Cathy Loose, Employee Workforce Practice Leader, SullivanCotter.
Considerations for 2024 and Beyond
External health care market forces continue to change how organizations are responding both strategically and operationally to recent workforce challenges. As organizations look cautiously towards greater financial stability and expect a return to pay growth more akin to pre-pandemic levels, it is important to take the following planning considerations into account:
- Market-driven base salary increases will focus more acutely on high-performing executives, critical clinical roles and the resolution of internal equity.
- Performance-based incentive compensation is expected to moderate.
- In a tight market for talent, leaders should ensure both pay levels and compensation delivery methods are aligned with the organization’s talent strategy.
- The aging baby boomer population will have a profound effect on the supply of executive and provider talent.
- Difficult choices and changes in the workforce will support an organization’s financial sustainability.
About SullivanCotter
SullivanCotter partners with health care and other not-for-profit organizations to understand what drives performance and improves outcomes through the development and implementation of integrated workforce strategies. Using our time-tested methodologies and industry-leading research and information, we provide data-driven insights, expertise, and data products to help organizations align business strategy and performance objectives – enabling our clients to deliver on their mission, vision, and values.
For more information on SullivanCotter’s surveys, please visit our website at www.sullivancotter.com, or contact us via email or by phone at 888.739.7039.
Note to media: Additional data and interviews are available on request.