A Holistic Approach to Managing Healthcare Workforce Complexities

The healthcare workforce is burned-out and traumatized following a 15-month face-off against COVID-19. In the wake of the pandemic, the demands placed on healthcare workers have been unrelenting.

As with the broader labor market, the pandemic had a different impact, depending on the type of job, the location, and several other factors. While nursing shortages are top of mind in some locations, in others there will be an oversupply of nurses but a lack of mental health professionals. If we’ve learned anything, it’s the importance of having access to mental health providers and by the look of it, that will be challenging come 2026. Healthcare organizations are facing a tremendous challenge. and the impact will be felt by all of us, regardless of our field of work.

The Landscape

Overall, there will not be enough healthcare workers to fill demand in the future. But the exact shape of this deficit depends on the specific role and geography considered.

First, some bad news. There are some critical healthcare roles that will be widely difficult to fill. For example, within the next 5 years, approximately 6.5 million lower-wage healthcare workers (e.g., home health aides, certified nursing assistants, etc.) will permanently leave healthcare occupations, resulting in a shortage of 3.2 million workers by 2026 relative to a total need of nearly 11M workers. Mental health workers will also be in short supply in many areas; a total of 310K new workers are needed to meet growing demand and replace retiring professionals, but supply will likely come up 55K short.

And there is some uncertain news. We are losing physicians due to retirement, which stands to create shortages. However, at the same time, “physician-based care” is rapidly transitioning to “physician assistant” and “nurse practitioner-based care.” It remains to be seen whether the shifts in care models will compensate for the shifts in workforce makeup, and this may depend largely on individual healthcare organization actions.

There is also news that varies widely by region. Registered nurses, for example, are painfully short in some areas, but are in surplus in others. Twenty-one states, particularly in the south, will have an oversupply of nurses. The 29 other states in the US, including Pennsylvania, Massachusetts, Colorado, and Illinois, will be suffering from in inadequate supply of RNs.

What to Do

Get specific about the workforce shortage issues your organization actually faces. As noted above, the landscape is not the same everywhere, nor is the future easily predictable. Using the workforce predictive analytics available from Marsh McLennan can help organizations understand the type and magnitude of the issues they face.

Get smarter about how you recruit and retain your workforce

  • Digitalize and automate recruitment and onboarding. Hospital and health HR systems are struggling to maintain pace with the volume of hiring and onboarding, as well as greater turnover. As the economy rebounds, this pace will only intensify.
  • Modernize your employee value proposition. CHROs have realized that traditional efforts that simply standardize and harmonize compensation and benefits often miss the mark with key workforce categories. With the graying of doctors and nurses, CHROs that are winning the talent war are taking a more segmented approach to employee comp-and-benefits. For example, while Gen Xers may be drawn more to 401K match and no-match health benefits, Gen Zers are looking for maximum schedule flexibility, work-from-home options, and same-day pay.
  • Upend traditional work environments to make them more appealing and sustainable. The reality is that healthcare organizations face a tight labor market and need to build a highly attractive employee value proposition based on pay, flexibility, and other factors. A war for talent is certain to break out: This is true both for highly educated physicians and nurses, as well as lower-wage positions such as home health aides and nursing assistants. 

    People, however, base career choices and job decisions on more than just pay and perks. Looking beyond the traditional dollars-and-cents levers, healthcare systems should take a hard look at their workplace culture and identify the elements that may be contributing to attrition and difficulty in recruiting. The year of COVID, admittedly, has been exceptionally hard for health workers, but healthcare has always been a stressful field. That stress is part of the terrain and sometimes unavoidable; but at times leaders’ work expectations and communication styles are simply vestiges of an outmoded and outdated culture.

Workforce specific actions will not be enough. Shifts in workforce availability will require broader shifts in strategy

Adapt to thrive in the new workforce landscape

  • Don’t hesitate on care model transformation. Demand is shifting to telehealth and other digitally enabled care models – ones that are both more attractive to consumers and less labor intensive. In addition, shifting to more community-based care may create new opportunities to do more with a different kind of healthcare workforce. While many health systems have started down this road, only those providers who manage to get it right – and organize around the new business model – will reap the benefits. This means designing new clinical and financial models, restructuring the organization, designing a new staffing model, retraining staff, reconsidering the physical footprint, and undergoing a thorough transformation. Most importantly, it requires changing the leadership mindset, and developing new expectations for what patient care looks like in the future
  • Reorganize around key services. Healthcare organizations need to evaluate which activities they can provide safely, effectively and in a way that is accretive to the enterprise. A deep analysis of where value is derived today and where it is likely to come from in the future environment is critical

Even if healthcare organizations make all the right moves, there are risks associated with the complex healthcare labor market that they need to be prepared for

Anticipate the new risks healthcare organizations will face

Shortages of skilled clinicians together with an overworked staff, personnel placed in unfamiliar roles or teams, or lack of staff heightens many types of risks. Where healthcare provider staffing levels dip, workplace injuries and worker’s compensation claims increase, as do medical errors and professional liability claims. In addition, there are associations between workplace violence and low staffing levels, and wage-and-hour lawsuits rise as staff becomes short.

Changes made to adapt to workforce shortages can create risk as well. A reliance on digital communications amplifies cyberattack risk and data losses that can impact patients and health systems. Newly deployed health data collection tools, such as wearables or smartphone apps, can fail, affecting care in unpredictable ways. And the use of AI in decision-making also creates complex risks of poor decisions and outcomes.

To address these novel risks, health systems need to implement risk mitigation processes, put in place crisis recovery plans, and have adequate insurance coverage in the event of an incident.

Healthcare organizations face a significant workforce challenge and they will have to break down existing organizational barriers to address it. Human resources, risk management, and business strategy leaders all need to collaborate to reshape organizations to thrive in this new, challenging landscape.