How to tell whether shift differentials and other premiums are working
When a shift is hard to fill, raising the premium is often the quickest response. That said, more pay does not automatically fix the workforce issues behind it.
Shift differentials, weekend premiums, and other supplemental and premium pay practices remain important tools for maintaining coverage, especially as organizations work to reduce their reliance on agency labor. To use them well, organizations need to understand where additional pay is needed, what problem it is intended to resolve, and whether it is producing the desired result. SullivanCotter’s 2026 Health Care Staff Compensation Survey provides current data on premium pay practices across participating health care organizations.
Use the questions below to evaluate your own premium pay practices and make more targeted decisions.
What does the survey indicate about shift differentials?
Premium amounts generally rise as shifts become less desirable, and they rise faster for some jobs than others. For staff registered nurses (RNs), the median flat-dollar differential climbs from $3.25 per hour for weekday evenings to $4.70 for weekday nights and $7.00 for weekend nights. Across all reported jobs, the range ($2.25 to $3.25) is much narrower.
Differentials set as a percentage of base pay show the same pattern on weekends. The median RN weekend-night premium is 22% of base pay as compared with 17% across all jobs.
These differences show why organization-wide averages tell only part of the story. A single differential applied to every job can overpay some roles while falling short for the ones that are actually the most difficult to staff. Premium practices should be evaluated by employee group, shift, and labor market.
Why should organizations review premium pay separately from base pay?
Base pay and premium pay serve different purposes. Base pay reflects the ongoing value of the job and the organization’s desired market position, while premium pay is generally intended to recognize a specific working condition or encourage employees to accept a difficult assignment, schedule, or shift.
When the two are reviewed together, the picture can be misleading. An organization may increase total compensation without addressing why a position is hard to fill, or a generous premium may hide base pay that has fallen behind the market. The design also matters. Premiums set as a percentage of base pay increase automatically with every base pay adjustment, whether or not the staffing need has changed.
A focused review should ask:
- Is base pay competitive on its own?
- Is the premium tied to a defined staffing need?
- Is the amount large enough to influence employee behavior?
- Is the premium still needed?
What are the risks of making broad premium pay changes?
Broad changes can:
- Increase costs without improving recruitment, retention, or coverage
- Create internal equity concerns if premiums extend to groups that do not face the same workforce challenges
- Raise overtime costs since shift differentials are generally included in the overtime rate
- Be difficult to reverse because eliminating a premium can feel like a pay cut
Before making these adjustments, organizations should identify the jobs, locations, and shifts under the greatest pressure. Once established, premiums should be reviewed on a set schedule to confirm that the need still exists.
What information should leaders review before changing a premium?
Market data shows whether premiums are competitive. Internal data indicates whether pay is actually the problem.
A useful review may include:
- Market rates for base pay and shift differentials
- Vacancy, turnover, and time-to-fill by job, location, and shift
- Use of overtime, agency labor, and extra-shift incentives
- How often premium shifts are picked up
- Employee feedback about scheduling and workload
This combination helps leaders determine whether a compensation response is appropriate and how narrowly it should be targeted.
How can an organization tell if a premium is working?
Each premium should have a clear purpose, an expected result, and a baseline to measure against. If the goal is to improve weekend coverage, leaders should monitor whether open weekend shifts are declining. If the goal is to reduce agency labor, leaders should track whether premium spending is achieving this goal or not.
A regular review can help answer three questions:
- Is the premium changing employee behavior?
- Is it improving the workforce outcome it was designed to address?
- Is the value of the improvement greater than the cost?
What should leaders do next?
Begin with a focused assessment of the jobs and schedules experiencing the greatest staffing pressure. Compare market data with internal workforce results, then determine whether the concern relates to base pay, premium pay, or a broader workforce issue. The goal is to spend premium dollars where they will actually improve coverage and retention.
SullivanCotter’s Health Care Staff Compensation Survey provides national, regional, job category, and metropolitan market data, including shift differentials and other premium pay programs by position and schedule, to support your assessment.
Need help evaluating premium pay practices?
SullivanCotter can help you determine the right response!
