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The Health Care Industry's Top HR Challenges

The health care industry is struggling to find qualified workers, especially in rural areas, to meet an increasing demand for services.

​When Jeremy Tolley's company tried to find a registered dietician for a new clinic in a rural area near Roanoke, Va., he says it was like "looking for a purple squirrel."

Tolley, who holds a SHRM-SCP, is chief people officer at CareHere LLC, which runs employer health clinics and offers virtual medical services. State records showed that within driving distance of the new clinic, there were only 10 registered dieticians. "It's very difficult to find talent … particularly in rural areas," says Tolley, whose 1,100-employee company is based in Brentwood, Tenn., but operates nationally.

Talent acquisition is the top problem for Tolley and many other HR practitioners in the health care industry, but employee burnout, the constant need for retraining, and evolving state laws and licensing requirements are also pressing concerns. To be sure, other industries face similar issues, but HR professionals working in health care say their challenges have never been this critical.

Looming Shortages

The number of health care jobs in the U.S. will grow nearly 12 percent between 2018 and 2028, according to U.S. Bureau of Labor Statistics (BLS) projections—nearly double the projected rate for all occupations. That growth will be partly driven by the aging of the massive Baby Boomer generation, since people generally use more health care services as they age.

Additionally, some of those aging Boomers are nurses who will be retiring just as patient needs are increasing. (About 51 percent of registered nurses are 50 and older, according to the American Association of Colleges of Nursing.)

The shortage of nurses already being felt by many health care companies is going to get worse, especially in the South and West, according to projections. The BLS estimates that 203,700 more nurses will be needed nationwide each year to meet demand and replace retirees. But U.S. nursing schools aren't keeping pace. They produced just 158,000 graduates in 2015, for example, according to a government study.

"There's probably not a worse industry out there than health care" as far as talent acquisition is concerned, says Julie Fletcher, chief talent officer for AMN Healthcare, a large San Diego-based staffing company. "They have to get creative about how to hang on to who they have." 

Medical Cross

Health care is one industry in which staffing deficiencies can literally mean life or death. For instance, a 16-year-old boy, badly injured in a car accident, showed up at a rural hospital that had been short on emergency room doctors, Fletcher says. "Our temporary physician had just [been hired] and was able to save the young man. [But if hospitals] don't have someone with the right skills to serve an injured patient, it's bad news."

As of 2017, 90 percent of hospital leaders were worried about finding clinical staff such as physicians, nurses and specialists in the next 10 years, and nearly 20 percent were already facing shortages of nurses, according to a survey for Prudential conducted by the Economist Intelligence Unit.

Developing Relationships

Recruiting is inherently different in health care, says Debby Routt, vice president of people and culture at Indianapolis-based OurHealth, which runs 40 clinics for employers, many of them based at client sites. Last December, Routt was already working on filling slots that will be opening in July. Many physicians have to give six months' notice because of noncompete agreements, and Routt can't afford to wait until a position opens to start looking for replacements. "We try to develop those relationships in advance because there's such a long ramp-up," she says.


Source: Prudential.

Because the clinics are situated at client sites, medical personnel can get to know the patients who work in that location. That's a selling point in recruiting, since personal bonds are important to many caregivers, but it also makes finding the right fit especially important. OurHealth's president meets with each potential doctor, Routt says, and candidates spend a day job-shadowing in the clinic.

When Routt's team finds a candidate it likes, it is willing to go the extra mile to get that prospect signed on.

For example, OurHealth found a great health coach who was willing to move to Charlotte, N.C., for a new position, but she couldn't find a townhouse that would accept her best friend―a partly blind and elderly dog―because many rental companies banned its breed from their properties. Rather than lose the hire, Routt's team got help from animal welfare experts to find a townhouse community near the clinic that would take the dog. The health coach and her companion are now settled in Charlotte.

To attract top talent, hospitals are focusing on:


​Offering training/advancement opportunities.


​Providing flexible work conditions.


​Offering signing bonuses.


​Ensuring that total compensation packages (including benefits) are market-leading.

Source: Prudential.

Alternative Solutions

Other health care recruiters are making broad changes to address the nursing shortage. For example, they raise pay when possible and stress nonfinancial differentiators, such as flexible scheduling and training opportunities.

Carrie O'Dell, CHRO for the Group Health Cooperative of South Central Wisconsin, which has 800 employees, recently hiked pay for nurses by $3 an hour to compete in the marketplace. "You have to keep up," she says, likening the competition for nurses to an arms race.

Tolley's company also has had to raise wages to compete for talent. "It's detrimental when they leave for $1 an hour" more in pay, he says. "We've done a lot to improve our benefits and set ourselves apart."

O'Dell's health system recently rolled out new bonuses for employees willing to pick up open shifts, and it's offering an extra $3 an hour to "float" nurses who are shifted to areas with the greatest need. (But it can be an unpopular position, since the nurses generally don't get to know the doctors and patients as well.) "You get the incentive because we want to keep you here," O'Dell says. "We want to keep our good nurses."

Companies also need to rethink staffing to include temporary workers, job sharing and part-time shifts, Fletcher says. Many nurses from the Millennial generation, she points out, want to travel and see the world, so they're willing to try out an area on a contingent basis. "There has to be more [of a strategy] than just 'hire all full-time people,' " Fletcher says. "There just aren't enough. If you don't think outside the box, you're going to struggle."

Top causes of current hospital staffing issues:


​Increased demand for health care/heavy workload.


​Poor work/life balance.


​Declining morale.


​Well-being concerns.

Source: 2019 Global Health Care Outlook, Deloitte.

Emphasis on Culture

The best people strategy, many HR leaders say, is keeping the people you already have.

Michele Tucker, senior HR business partner at Calvert Health System, a privately held hospital in southern Maryland with 1,250 employees, says her retention efforts now include a "stay" survey to get a read on what keeps workers tethered to their jobs—and what makes them want to leave.

"We want to find out [if we are] meeting their needs," Tucker says. "We want to be an employer of choice."

Health care companies, especially those that have to face off against wealthier competitors, are emphasizing intangibles such as culture and more scheduling options in their recruiting. O'Dell says she recently hired a psychiatrist who was drawn to the cooperative structure of her system and the ability to spend more time with patients.

Even seemingly trivial changes can help, like the "dress for your day" policy that O'Dell implemented. Under the policy, unless their duties for the day demand otherwise—for example, if they are meeting with people from outside the organization—employees can take advantage of a relaxed dress code. "That was free," she says, "and the morale boost that provided was amazing."

Tolley, whose clinics are located within clients' companies and don't operate around the-clock like hospitals, can lure people with flexible hours, dedicated shifts that are predictable, and a lack of required overtime or on-call time.

A culture of engagement is also key, Tucker says, with a focus on camaraderie within departments. Her team is rolling out a "Just Culture" algorithm, which involves a decision tree approach to assessing problems. The system encourages workers to report issues without fear of repercussions. It addresses rule breaking, medical errors, conflicts and behavioral issues to figure out if incidents were intentional, caused by communication problems or indicative of a systemic issue.

Tough Tasks

Positions located in rural areas are among the trickiest for recruiters to fill. Tolley's team eventually found its "purple squirrel" by tracking down as many of the 10 nearby dieticians as it could. "We stalked those people," he jokes.

To fill rural slots, Fletcher looks for people who grew up in the area and might want to return, as well as those who like the idea of practicing in that type of environment and forming closer connections with patients.

Tucker was trying to fill a medical technologist position that had been open for six months, but the nearest college for that specialty had produced just one graduate in two years―and that individual was promptly snapped up by a bigger hospital.

"It's really difficult," notes Kelly Barnes, global and U.S. health industries leader for PwC's Health Research Institute. Rural providers need to invest in higher wages, benefits packages and digital training, she says.

In October 2019, the federal government raised its wage index for rural areas. That's likely to help because it means higher reimbursements for services provided to Medicare and Medicaid patients in areas struggling to offer competitive salaries to attract staff.

Health Professional Shortage Areas


One significant side effect of staffing shortages is retention-killing burnout. Unlike industries where production lines can be shuttered or orders can be declined if there are not enough workers, health care companies must keep shifts filled to take care of the patients who depend on them. HR leaders warn that if staffing shortages lead to forced overtime hours, workers will retire early or leave for other jobs, making the situation even worse.

"When you're short-staffed in health care, the rest of the team takes it on and gets burned out," O'Dell says. Then they ask, "Why should I stay?"

It's not just the additional hours that cause a problem. It's also the "mental load" that doctors and other providers must carry. "You're not just making widgets," O'Dell says. "You're in a room with a patient discussing cancer. The emotional burnout of taking on everyone else's sicknesses, depersonalizing it, doing it all day, adds up to a different type of burnout than having a lot of work to do."

The health care workplace relies increasingly on technology and real-time communications, and that can contribute to burnout as well. Clinical staff often must document everything in medical records and respond directly to electronic messages from patients that come in at all hours.

O'Dell is considering hiring people with medical backgrounds to take on some of these documentation responsibilities so staff can spend more time with patients. She's also offering training in mindfulness and other techniques to help staff reduce stress.

Improving Digital Skills

One solution to ease burnout and staffing shortages is upskilling, including teaching staff more digital skills. Health provider executives surveyed by PwC's Health Research Institute rated digital training as a top workforce strategy priority for 2020. Training health care providers on emerging technologies can free up time for patient visits and reduce time spent on paperwork.

To compete for talent against larger health systems, OurHealth employs regional care team managers who work around the country on employee development and training in the company's clinics. Usually, "if you're working in a smaller environment, you don't have the same type of development opportunities," Routt says. That makes the chance for professional development especially important in rural areas, she notes.

But companies may need to rethink their approach to training, according to Karen Feeney, SHRM-SCP, client and employee experience leader at Sterling, a New York City-based provider of background and identity services. Staffers are usually short on time and more able to consume a five-minute video on their phones than a lengthy seminar.

"This is an era of instant gratification," says Feeney. "There's a dynamic where we have so much information coming at us so quickly." Companies need flexible training platforms to quickly distribute information that helps staff do their jobs better, she says.

Barriers to digital strategies

With medical technology constantly advancing, many clinical staff haven't learned needed skills to keep up. But acquiring those skills is complicated by the need to find time for the training when staffing levels, especially for nurses, are already low. "How do you manage your talent pool while you make this shift?" Barnes asks.

One solution is using temporary workers to fill in while training takes place. New technologies, including improved data-management and diagnostic tools, can be a money-saver, so the cost of temporary help is a more palatable expense toward increased efficiency.

Another idea is tapping people who are naturally adept with technology for training first, so they can share what they learned with others. "They're running ahead of the curve and are so excited about it," Barnes says. "They translate it back to everyone."

Technology is also allowing doctors to serve rural areas from afar via videoconference, using tools such as remote stethoscopes. Many current medical providers don't have training on these devices, but they will increasingly need those skills.

In a tight labor market, companies often don't have the luxury of screening out candidates without tech chops, Tolley says, so they must train them. "The technology has gotten to the point where there are no compromises," he says.

State Laws and Licensing

One headache health care HR practitioners experience that most of their counterparts in other industries don't is dealing with licensing rules for their staffs and related regulations that vary by state. Differing state rules pose a special challenge for companies that operate around the country. Routt, for instance, must work with legal teams in six states to ensure compliance with regional requirements. O'Dell has a full-time position devoted to staying on top of such rules. 

"You have to know those regulations in order to figure out who you can treat [and] how you train and onboard" staff, Tolley says.

In Missouri, for instance, nurse practitioners are required to work directly with a physician for 30 days before they can begin seeing patients. For a clinic that doesn't have a doctor onsite, that means paying a nurse practitioner to work for a doctor outside the company―and paying the outside doctor, too.

Staying in Touch

Communication poses unique challenges in health care. Hospitals are open 24/7/365, so employees are on the clock at different times. Also, workers at Calvert Health System and other provider companies typically have vastly different levels of education, Tucker notes. "We have housekeepers and physicians and everything in between." (About 12 percent of her company's staff has a high school education or less.)

Since staffers spend much of their time with patients, not in front of a computer, Calvert Health draws attention to crucial e-mails with subject lines such as "Action Required." Company directors give managers talking points and require them to hold regular staff meetings. Workers must attend at least 85 percent of meetings, in person or remotely, or be docked pay.


Julie Fletcher

Julie Fletcher

Tolley's workforce is spread out, many in rural areas with few co-workers, so it's important to find remote connections for communication. His company holds a regularly scheduled videoconference with the company president, during which workers can call in with questions. Tolley also has offered training for managers in how to lead remote teams. 

A crucial part of communicating, Fletcher says, is listening to what employees need. Happy employees usually don't leave. "From a retention standpoint," she says, "your workforce is like gold."

Tamara Lytle is a freelance writer in the Washington, D.C., area.

Illustration by Fatinha Ramos.

Editor’s Note: This is the first in a series of articles from HR Magazine focusing on workforce challenges in major industries.