US Hospitals Boost Pay, Benefits to Combat Rampant Nurse Turnover

In response to the high turnover rates among nurses and physicians, many U.S. hospitals are demonstrating their commitment to improving the mental health and resiliency of their workforce by bolstering their pay and benefits, according to a new Aon survey.  

Last year, 62% of hospitals reported increased turnover among nurses, and 22% said physicians are leaving more often than the prior 12 months. 

“The top priority for hospitals is to attract and retain front-line medical professionals in the face of a nationwide talent shortage and a surge of demand for medical care after the pandemic,” said Sheena Singh, senior vice president of Aon’s national healthcare industry practice, in a release. “This shortage threatens to impact patient care and accelerate burnout among clinical staff. As a result, health systems have prioritized investment in total rewards and support for workforce resiliency and mental health.” 

To address this talent recruitment and retention issue, 70% of hospitals in the past year have implemented or bolstered sign-on bonuses, 59% have increased new hire pay, 54% have increased their minimum wage scales and 52% increased or added referral bonus programs, according to the results of the survey. 

The competitive landscape for health care employees is also driving more health system employers to make accommodations via their remote- and flexible-work policies. For example, 77% of hospitals reported offering more hybrid work schedules, and 65% increased full-time remote workers. In addition, 56% of hospitals offered flexible hours. 

Meanwhile, consulting company PwC found in its 2023 Saratoga benchmarking survey, which surveyed nearly 400 companies across more than 20 industries, that the churn of workers is slowing and turnover rates are starting to settle back to pre-pandemic levels. In 2022, PwC found that the voluntary separation rate for hospitals and health systems was 17.8%, down from 19.8% in 2021. 

However, according to PwC, voluntary separation rates differ across groups, with women of a racial or ethnic minority, Generation X and Generation Y employees showing improvements from 2021 to 2022, whereas rates among other groups remained nearly stagnant.  

The Aon report also revealed that average health plan expenses per hospital beneficiary per year increased 6.7% to $16,151 in 2023 from $15,142 in 2022. Despite this, 82% of hospitals aim to pay 76% or more of their employees’ health care costs, and 13% offer a no-cost health plan option to some segment of their employee population.  

Aon also found an increased prevalence of high-deductible health plans—offered by 63% of health systems in 2023, compared with 57% in 2022—and that these need to be “aligned with a thoughtful strategy to ensure that those who cannot afford high deductibles are guided to choose the most appropriate plan option.” 

Going into 2024, top concerns from human resources leaders at health systems include: 

• Access to mental health services (89%); 
• Employee burnout/workforce resiliency (86%); 
• Offering competitive total rewards to attract and retain talent (85%); 
• Increasing health care costs for the health system (85%); and  
• Improving health outcomes (83%). 

Hospitals also reported experiencing higher levels of financial stress among staff members and that staff are facing an increased amount of debt and cannot pay their bills. Aon observed that hospitals are turning to lower or salary-based health insurance premiums and cost-sharing through plan design, as well as offering emergency funds for low-wage earners. 

Aon’s survey results further revealed that health systems are modifying benefits to support diversity, equity and inclusion. For instance, around 20% of health system employers are investing financially to address social factors like transportation, food insecurity and housing that can impact employees’ cost and health outcomes. 

Aon’s 18th annual Benefits Survey of Hospitals surveyed hospital employers between April and June and includes responses from more than 1,400 U.S. hospitals.