US Healthcare Labor Shortages Compounded as a Result of the Pandemic

The healthcare workforce is burned-out and traumatized following a nearly two-year face-off against COVID-19. Healthcare workers are – and will continue to be – in high demand – and labor supply is not keeping up. Even before COVID-19, the US healthcare labor market faced remarkable challenges and while labor shortages in the US are widespread, significant deficits in healthcare talent will have an impact on all of us.  

Mercer’s 2021 External Healthcare Labor Market Analysis identified significant shortages in this critical sector across all 50 states over the next five to ten years. First the bad news: there will not be enough healthcare workers to fill demand in the future. 

Prior to the pandemic, healthcare talent shortages were driven by a population that was trending older, sicker and more sedentary. But now, hospitals and healthcare systems have to contend with additional influences. Notably, healthcare professionals are leaving the profession at an accelerated rate; faster than we have seen previously, and at higher volume than estimates from when COVID-19 began. In part, the increased departure rate is due to an ageing population - but the exhaustion and burnout our healthcare and pharmacy providers have endured because of COVID-19 is a direct contributor. A recent Mercer survey of healthcare employees found that after physical health and fitness, concerns around burnout are top-of-mind: workload / life balance comes in as employees’ second highest concern, a close tie with mental health concerns. Further, 49% of healthcare professionals surveyed cited burnout due to workload as a primary reason they would consider leaving their current employer. 

While hospitals and healthcare systems cannot control what is happening in the external labor market, effective workforce planning and addressing employee needs will help mitigate labor shortages. Workforce strategies that will position an employer for long-term success should focus on compensation, benefits, and flexibility. 

  • Don’t just mitigate now, prepare now for the future. Having rigorous analytically based workforce plans, as well as an understanding of the external healthcare labor landscape, will enable your organization predict and react to shortages and shifts in available talent. 
  • Upend traditional work environments and modernize your employee value proposition. Conduct root cause analyses and assess employee experience to substantially reduce voluntary attrition. 64% of healthcare professionals said better flexibility and work-life balance are key considerations that would attract them to a new employer.  
  • Valuable skills come at a price. Insufficient pay and benefits was the #1 reason healthcare workers would consider leaving their company, with 2 in 5 workers saying they are not compensated fairly today. Competitive compensation packages are still a strong attraction strategy, with 87% of respondents citing that better pay and benefits would attract them to a new employer.  

Shortages in healthcare talent will impact all of us. Every state is different, and every healthcare system should assess how these anticipated labor market projections will ultimately affect workforce strategies and patients outcomes in the coming years.

If you’d like to explore the Healthcare Labor Analysis further, this interactive map features a small subset of the healthcare workforce at a broad geographic level from Mercer’s proprietary database of over 80 healthcare roles, projected over 3, 5, and 10 years at the county and metropolitan statistical area level. You can also listen to this podcast to hear the complex challenges and risks the healthcare provider industry is facing now, and their ideas on how providers can address those issues now and in the near future. 

CLICK HERE TO READ THE 2021 HEALTHCARE LABOR MARKET ANALYSIS.

John Derse
by John Derse

Partner, Healthcare Industry Vertical Leader

Tanner Bateman
by Tanner Bateman

Senior Associate, Mercer

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