Hospital payrolls are increasing while average hourly earnings growth for employees has slowed — a sign the industry's labor challenges may be easing, according to a new report from Fitch Ratings.
The "Hospitals and Healthcare Systems Labor Dashboard: April 2023" shows year-over-year average hourly earnings growth for employees at nonprofit hospitals slowed to 4.7 percent in February, down from a peak of 8.4 percent in June 2022. Earnings growth has also come down from a high of 6.3 percent in January 2022 to 3.8 percent in February for employees in ambulatory healthcare settings.
More takeaways from the report:
- As of March, hospital payrolls have risen for 14 consecutive months. Over the 12-month period from April 2022 to March 2023, monthly job additions at hospitals have been up by an average of 15,150. Over the same period, monthly job additions were up by an average of 24,300 across ambulatory care settings.
- The job openings rate for the healthcare and social assistance sector has fallen from a peak of more than 9 percent in March 2022 to 7.4 percent as of February 2023. Still, the rate is "very high" compared to the average of 4.2 percent in the nine-year period before the pandemic.
- Quit rates in the sector are still high, sitting at 2.7 percent as of February. That's up from the average of 1.6 percent from 2010 to 2019.
"These statistics point to the potential of alleviating labor market pressure," Richard Park, Fitch ratings director, said in a statement. To rebound from the persistence of high quits and wage inflation over the last year, "Hospitals will have to invest in cost effective care solutions and develop enhanced business models that incorporate flexible staffing to adapt to labor costs that have been reset to a permanently higher level," Mr. Park said.