December 9, 2023
Healthcare payrolls recovering, still lag pre-pandemic levels

Dive Brief:

  • The nation’s healthcare sector added 28,000 jobs in May, including a 16,000-worker bump in hospitals, though the industry continues to operate with fewer employees than it did before the start of the pandemic, the government said Friday. Overall, U.S. nonfarm payroll employment increased by 390,000, with the unemployment rate unchanged for a third straight month at 3.6%, according to the Bureau of Labor Statistics.
  • Healthcare subsectors with the largest workforce gains after hospitals were ambulatory services, physician offices, and nursing and residential care facilities, at about 6,000 new employees apiece. Dental offices, outpatient care centers and home health services each added 1,000 workers in May.
  • Employment across healthcare is down 1.3%, or 223,000 jobs, from pre-pandemic levels. By comparison, total nonfarm payrolls are down 0.5%, or 822,000, compared to February 2020. 

Dive Insight:

The healthcare industry is continuing its slow, uneven recovery from the sharp workforce contraction seen in the early months of the pandemic, when many healthcare workers who were not directly caring for COVID-19 patients faced furloughs or reduced hours.

BLS figures show healthcare workforce gains so far this year of 18,000 jobs in January, 64,000 in February, 8,000 in March, and 34,000 in April, on top of May’s expansion.

Staffing shortages in the sector have persisted through the pandemic, especially during surges of coronavirus case numbers. Hospitals reporting critical staffing shortages during the omicron wave in early 2022 peaked at 22% in mid-January, according to a seven-day average tracked by the HHS, cited in a report last month from the Office of the Assistant Secretary for Planning and Evaluation. By mid-March, after COVID-19 case rates declined nationally, the seven-day average retreated to 9%.

A 2021 report from the HHS’ Office of Inspector General found that many hospitals reported shortages of nurses in particular, raising concerns about patient safety and quality of care. Staffing shortages have led to high turnover and competition for workers. Last month, U.S. Surgeon General Vivek Murthy warned that burnout among the healthcare workforce was contributing to ongoing staffing shortages.

The OIG report signaled that longer hours, more responsibilities, and witnessing COVID-related deaths were taking a toll on hospital staff, resulting in exhaustion, mental fatigue and trauma. Staff involved in direct care of patients also faced disproportionate mortality from COVID-19.

High staff turnover has forced hospitals to rely on contract labor, which in turn has helped drive up labor costs for operators. A number of nonprofit medical systems reported first-quarter losses, due in part to rising costs associated with widespread worker shortages.

Even before the pandemic hit, some geographic areas, including many rural communities, faced longstanding challenges in staffing of healthcare workers that were exacerbated by the public health crisis. Shortages of healthcare providers such as registered nurses, primary care physicians and behavioral health specialists were being projected even before the pandemic.

According to the BLS, sectors with notable employment gains in May were leisure and hospitality (84,000 jobs), professional and business services (75,000), transportation and warehousing (47,000) and construction (36,000), while the retail sector saw a loss of 61,000 jobs.