The need for healthcare workers is quickly outpacing an ever-shrinking candidate pool. As one response to the labor crisis, healthcare organizations need an effective way to communicate the full value of the benefits they provide to employees.
Word of a looming labor crisis should come as no surprise. The need for healthcare workers is quickly outpacing an ever-shrinking candidate pool. According to the Bureau of Health Professions, the number of healthcare jobs will grow to nearly 14 million by 2010 to meet the increased demand as the baby boomer generation reaches 65. Conversely, hospitals and healthcare facilities are faced with an aging baby boomer workforce who, if not retiring, will be moving to less stressful jobs and part-time occupations. The impact is also expected to be felt across different functional areas in healthcare. For example, by 2014 there will be a need for 1.2 million new and/or replacement nurses. In addition, the allied health provider shortage is predicted to reach 1.6 million to 2.5 million by 2020.
For the nation's healthcare industry, recruiting and retaining a qualified workforce will become its most pressing challenge.
Role of compensation and benefits
Benefits and employee recruitment and retention are-and will remain-intertwined. According to the MetLife study, as organizations face a difficult balancing act with potentially conflicting priorities, they cannot afford to view benefits as a cost center to be minimized. The growing challenge of recruiting and retaining talented workers solidifies the role of benefits as a top strategic consideration for management and a key point of differentiation among organizations competing for talent. This finding suggests that benefits will become a stronger business driver than they have been historically.
The challenge, in this case, is also the solution. Healthcare organizations need an effective way to communicate the full value of the benefits they provide to employees. Studies have shown that employees underestimate the value of their benefits and are unaware of just how much employers contribute. New data from the Towers Perrin 2008 Health Care Cost Survey indicate that the average corporate health benefit expenditure in 2008 will be $9,312 per employee-an increase of 7% over 2007.
With rising benefits costs (such as medical), it is increasingly important for employers to convey the full value of benefits in terms of the "non-cash" compensation they provide (employer-paid contribution to medical, disability, or retirement). In fact, the average employer will spend 41 cents for benefits for every dollar of payroll. On average, that's 29% of the total employee compensation package.
In light of these statistics and trends, healthcare organizations can use their investment in human capital as an invaluable tool to address what has become their number one concern-recruiting and retaining talent. A solution, which communicates and demonstrates the full value of an employee's benefits and compensation, is the best bet for competing effectively in the emerging labor shortage and changing employment landscape.
Case study: Emanuel Medical Center
Emanuel Medical Center (Turlock, Calif.), a not-for-profit, community-based hospital, is typical of its counterparts across of the country. It has a self-funded health plan and a fully-funded pension plan-and, of course, the hospital is cost-conscious. At the same time, Emanuel understands the importance of offering the community quality services provided by top-notch staff. The challenge that is magnified for Emanuel is its geography.
California faces a particularly rough road ahead when it comes to the healthcare labor shortage. The state's senior citizen population is projected to grow by 3.2 million by 2020 and, mirroring national trends, California is experiencing labor shortage across many key healthcare areas-allied health professionals, nurses, and physicians. On a regional level, Emanuel competes and draws from the same talent pool as two other area hospitals.