How Healthcare Employers Are Handling High Compensation
Amid frequent–and rapid–shifts in the healthcare industry, professionals are changing jobs more than ever before. According to our 2022 Healthcare Hiring Outlook, 73% of employers experienced more voluntary turnover in 2021 than any previous year.
“What’s even more challenging for employers is that compensation expectations for healthcare professionals has increased very quickly,” explains Steffanie Ngo-Hattchie, a Managing Director at Tandym Health. According to Doximity’s 2021 Physician Compensation Report, compensation for U.S. physicians grew by 3.8% on average, with individual cities in the U.S. increasing as much as 12.9% between 2020 and 2021.
Between staffing shortages, budget constraints, and extreme burnout, healthcare facilities are facing many challenges to meet patient demands. So, what can they do to keep their talent and attract new employees?
“The easiest and most obvious way to address these challenges is being able to offer higher compensation,” says Steffanie. “However, higher salary doesn’t solve all candidate concerns, such as burnout, and then there could be budget constraints. So, I always encourage employers to take a look at the entire compensation package.” Here’s what Steffanie recommends to not only attract healthcare professionals, but retain them long-term:
Weigh a retention bonus vs. a signing bonus
Employers often offer signing bonuses to in-demand professionals to entice them with an additional cash offer. “While a signing bonus is a lump sum on day one, employers often don’t know if they will see a return on that investment,” explains Steffanie. “However, a retention bonus can be offered instead with the hopes that this employee stays long-term.”
Instead of a signing bonus paid out immediately, a retention bonus may be paid out every year the employee stays, up to five years. “Sometimes this includes a small sum at the start of employment as well,” says Steffanie. “But to reduce turnover, switching to a retention bonus can help ensure that you get the return on that investment.”
Address pay disparity between new and old employees
With compensation increasing so much, you may have new employees starting at a much higher rate than your more tenured employees. Steffanie suggests that it’s important to adjust the pay of these employees for multiple reasons.
“First, it’s important to pay your employees the market value for the work they’re doing,” she says. “If you don’t, your employees are very likely to leave for an employer who will pay them what their skills are worth. There are plenty of employers willing to do so.”
Additionally, be mindful to reward those employees who have stayed by your side. “If you’ve retained these healthcare professionals thus far, you can ensure you don’t lose them by doing this,” Steffanie explains.
Expand compensation package benefits
In addition to actual monetary value, it’s important to evaluate your entire compensation package. Here are a few other items Steffanie suggests you look at:
- Paid leave: From maternity/paternity leave to bereavement, there are several options employers can offer for their staff that are low cost to them. “This includes several options, from offering valuable longer-term paid leave policies to additional days off, for example to vote or volunteer,” explains Steffanie.
- Flexible scheduling: If you’re able to, offering a more flexible schedule can help attract top healthcare talent in today’s competitive hiring environment. According to our 2022 Healthcare Hiring Outlook, job seekers ranked this as a top consideration when looking for a new job. “With so much burnout in this profession, offering a more flexible schedule can be a game-changer for attracting and retaining talent today,” says Steffanie. “Even giving staff more autonomy over their own schedules can make a huge difference.”
- Growth opportunities: To retain employees long-term, be sure to explore how a prospective employee might be able to grow in this role. Plus, consider how you can help with continuing education for healthcare professionals. As Steffanie explains, “Many employers offer to pay CME dues, plus they allow time for that necessary learning.”
Create a welcoming environment
Lastly, as you look to attract and retain talent in an unprecedented job market, it is critical to understand how to “sell” your opportunity, putting all the benefits of your working environment on display. With healthcare professionals facing multiple options, it’s not enough for employers to simply make an offer.
“You have so much competition for each healthcare professional you’re after, so making an enticing offer is only half the challenge,” explains Steffanie. “Be sure that you can not only explain what sets you apart from others, but also how you can meet their expectations.”