7 HR Trends in the Healthcare Industry
The healthcare industry is staring down a devastating talent shortage—by 2028, we could be falling short by over 100,000 essential health workers. And that’s just one of the challenges HR in healthcare is dealing with today.
Healthcare has undergone immense changes over the last decade, including advances in technology, a shifting labor force, and the trauma of a global pandemic. While healthcare workers navigate these trends with their patients, HR pros are seeing firsthand how an evolving (and suffering) industry is impacting employees.
To learn more, we interviewed HR leaders about the current state of HR in healthcare. Read on to find out about the latest industry trends, what to expect in the future, and how HR can stay prepared.
*Editor’s Note: Quotes have been lightly edited for clarity and concision.
Key takeaways
- Implement an AI use policy and ensure humans review all AI-generated hiring content to prevent accidental bias and errors.
- Combat severe labor shortages and high turnover by offering creative benefits and tracking employee satisfaction to improve retention.
- Manage complex, ever-changing regulations and compliance training (including HIPAA) with an HR information system and a system for following industry news.
- To retain young talent, like Gen Z, invest in a strong workplace culture, offer mentorship, and clearly communicate career advancement opportunities.
AI for hiring and employee management
AI is a buzzy topic for HR across all industries—at least 1 in 4 companies use AI for HR, SHRM reports—and healthcare is no exception. AI can save time and empower HR in healthcare, but HR professionals also have concerns about the impact on hiring and talent management.
AI can automate tasks like posting job ads, sending emails, and analyzing employee data, and for HR in healthcare, this can mean major time savings for overworked and understaffed teams.
“I think AI is actually very helpful. I've used it to help me with hiring and finding people, drafting letters and stuff like that. I think that it could be pretty helpful in helping us figure out how to do certain things better with our hiring process, what resources we should be allocating where, and employee management.”
HR Generalist
However, AI isn’t an instant fix to all of HR’s problems, and in some cases, it may be introducing new challenges. For example, while AI can speed up the hiring process, it can also cause roadblocks by favoring keyword-stuffed resumes and potentially overlooking qualified candidates.
And as patients remain hesitant about the role of AI in their healthcare, some HR pros are also questioning how much AI should stand in for human judgment when it comes to hiring healthcare providers.
“I've seen AI a lot in hiring, and it's looking for keywords in resumes, and many people know that. So what people are doing is they're taking our job ads, and they're using AI to create their resume and cover letter based on our job ad. So then our AI would automatically say, ‘OK, great, this is the person that you should hire.’ And that's not good.”
HR Generalist
How HR can stay ahead:
- Create an AI use policy: Establish an internal policy on ethical and proper use of AI tools, including guidelines on data security, privacy, accidental bias, and appropriate use cases.
- Review AI tools: Have relevant leaders (such as executives, IT leaders, or legal counsel) review and approve AI tools before your team starts using them.
- Use human judgment: Any AI-generated content or analysis should be evaluated by a human before being shared or used for decision-making.
Labor shortages and high turnover
A Mercer report estimates there will be a shortage of around 100,000 critical workers by 2028. This rising shortage is the convergence of two unfavorable factors: burnout and an aging population.
Burnout was already a pressing issue, but the trauma of the COVID pandemic has intensified the crisis, causing workers to leave the healthcare industry. Compared to other industries, healthcare has one of the highest turnover rates. Meanwhile, as healthcare institutions hemorrhage workers, the global population is aging and the need for providers is rising, with more patients having more acute needs.
From an HR perspective, the growing gap between labor supply and patient demand adds immense pressure to the job. Understaffing in healthcare can become a literal life-or-death problem, and the competition to recruit qualified workers has never been more fierce.
“There's a lot of competition for good workers, a lot of competition for therapists, nurses, doctors. Even when you offer good benefits and rewards, it's hard to be competitive with those things because benefits can be very expensive. One of my biggest challenges is getting the right people in the right positions and then keeping them satisfied and motivated enough within their positions to stay.”
HR Generalist
How HR can stay ahead:
- Get creative with benefits: Enhance compensation packages with creative benefits that attract talent without stretching your budget—consider perks like flexible PTO, remote work options, and career training opportunities.
- Hire paid interns: Hiring paid interns allows you to cultivate and recruit talent while getting some much-needed hands on deck.
- Track employee satisfaction: Anticipate and prevent turnover by gathering actionable feedback with employee satisfaction and wellbeing surveys.
“We do something a little different, and we give people unlimited time off. People just want to know that they can take off and take care of their lives, and that’s one of the perks of our company that I do think keeps our people happier.”
Senior VP of Operations
Compliance and ever-changing regulations
The healthcare field requires HR to wear many compliance hats, from protecting patient rights to ensuring a safe and ethical workplace. Safety requires extra attention in healthcare, with employees at increased risk of exposure to biohazards, infectious diseases, and dangerous equipment. Poor working conditions can also impact patient care—an overworked nurse or distracted doctor can make life-threatening errors.
In addition to safety compliance, HR is often also responsible for ensuring that all staff members are up to date on their HIPAA compliance training. Cybersecurity awareness is a particular challenge for the industry, with only around 30% of healthcare providers conducting monthly security training. And while most HR roles don’t directly deal with patients, HR pros still need to be mindful of their own team’s HIPAA compliance, as they could interact with HIPAA-protected data, such as schedules that include patients’ personally identifiable information (PII).
Staying on top of these crucial, constantly changing industry regulations leaves many HR professionals feeling overburdened. Here are just a few legal topics HR pros in healthcare need to monitor:
- Healthcare worker wage hours and overtime policies
- Laws regarding violence against healthcare workers
- Hazardous materials regulations
- Patient rights and privacy protections
- Healthcare cybersecurity laws
“There’s state and federal laws that you have to abide by. The HR paperwork has to be perfect, the facilities have to be safe, and it’s all a little bit more difficult.”
HR Generalist
How HR can stay ahead:
- Subscribe to industry publications: Follow the latest industry news through platforms like Healthcare Brew or the HIPAA Journal.
- Track compliance training: Use your HR information system to track employee training requirements and send out reminder messages.
- Establish a reporting system: Create a system for employees to confidentially report safety and compliance concerns, as well as a process for internally investigating complaints.
Challenging payroll complexities
Running payroll in the healthcare industry is far from straightforward. While some industries deal mainly with salaried workers or standard 9 to 5 wage workers, healthcare is an intersection of just about every type of pay structure and employment type you can imagine.
The typical HR pro in healthcare may be running payroll that accounts for:
- Medical staff
- Non-medical staff
- Student workers and paid interns
- Payroll taxes for H-1B and J-1 visa holders
- Irregular shift schedules
- Varying shift pay rates
- Overtime pay
- Multiple union contracts
Payroll for healthcare workers is already a complicated process, and with staffing shortages, many HR leaders are left with limited support. This excess burden on HR can lead to costly errors in payroll taxes and miscalculated paychecks, as well as time wasted on making corrections and manually double-checking processes.
“Payroll always presents the biggest challenge for me: trying to make sure everyone’s hours are correct, that there are no mistakes, that people get their pay on time. People want their money when they want their money.”
HR Manager
How HR can stay ahead:
- Connect time tracking with payroll: Choose a single, connected platform for your time tracking and payroll tools, ensuring even the most complicated shift hours will flow accurately into payroll without manual entry errors.
- Get a platform with multiple pay rates: Look for a payroll solution that offers automated multiple pay rate calculations, simplifying payroll for those employees that take shifts with varying pay rates.
- Leverage data analysis: Track important metrics, such as overtime costs, to find opportunities for improving shift scheduling and compensation strategy.
Training and learning gaps
Most healthcare workers need to renew licenses or certifications regularly, as well as complete continuing education hours to learn the latest best practices within their specialties. However, busy schedules, high-stress work environments, and confusion around training requirements leave many healthcare workers behind in their continuing education—and it’s up to HR to help them play catch-up.
Continuing education has become an even greater concern since the beginning of the COVID pandemic, when medical and nursing students missed important practical training opportunities, such as clinical rotations. As a result, skill gaps in the newest generation of healthcare professionals now pose a major risk to patient safety.
To keep healthcare workers on track, HR pros are finding it necessary to provide them with additional support. Managing training has gone from just checking off forms to coordinating with each worker on their particular certification requirements and the logistics of scheduling courses.
“Learning is another difficult area. It's really hard to get people the information they need to make sure that their CEUs (continuing education units) are there and to make sure they're getting the skills they need to do their job.”
HR Generalist
How HR can stay ahead:
- Manage training data: Use an HRIS to efficiently track training requirements and completion statuses for each employee. Look for a platform that offers self-service, so employees are empowered to independently review their training information.
- Document skill gaps: Emphasize skill proficiencies during performance review cycles, creating evaluation forms that enable supervisors to flag significant skill gaps.
- Incentivize training engagement: Encourage employees to meet training deadlines by awarding small perks for completed courses.
Engaging younger talent
Younger healthcare workers are now highly sought-after, and for good reason—the Association of American Medical Colleges (AAMC) reports that 20% of clinical physicians are over 65, and another 22% are between 55 and 64. With a large portion of doctors approaching retirement or having already surpassed retirement age, recruiting and retaining the next generation of healthcare providers is essential to combating the labor shortage.
Unfortunately, younger employees are not warming up to healthcare. In fact, more than 1 in 5 Gen Z healthcare workers expect to leave the industry within the next few years. Issues like bad workplace culture, a lack of career advancement, and unsatisfactory compensation have left young healthcare professionals ready to try something different.
To convince Gen Z to stick around, HR will need to get creative with their engagement strategies, especially when it comes to company culture and career growth.
“The younger generation now entering into the business world moves around a lot, and it’s hard to make people want to stay with a company for a long time.”
Senior VP of Operations
How HR can stay ahead:
- Invest in culture: Prioritize employee experience by regularly gathering feedback, emphasizing collaboration and recognition, and pursuing team-building activities.
- Create retention incentives: Try offering perks for staying long-term, such as retention bonuses or extra PTO for reaching certain tenure milestones.
- Communicate career paths: Make sure employees are aware of potential career opportunities within your organization, and outline a clear path of how employees could advance.
- Offer mentorship: Pair entry-level workers with more experienced employees to provide guidance on long-term career planning and promote networking.
Burnout and mental health struggles
Healthcare continues to face staggering rates of burnout and poor mental wellbeing among employees. Nearly half (45%) of healthcare workers report burnout, and employee satisfaction in healthcare consistently ranks low compared to other industries.
In the last several years, the COVID pandemic has exacerbated existing stressors like dangerous work environments, low wages, and excessive overtime, triggering a widespread crisis for health workers. Case in point, a significant portion of infectious disease specialists experience emotional exhaustion and depersonalization.
Safety issues have especially damaged mental wellness—the rate of workplace violence against healthcare professionals may be as high as 76%, including acts of physical violence, verbal abuse, threats, and sexual harassment.
HR is often on the frontlines of these mental health challenges, navigating high turnover rates and staffing shortages, responding to workplace safety issues, and coordinating assistance and benefits for workers in crisis.
“The staff is having to do more for less, and I think that's the new norm, and it shouldn’t be. As a result, people are taking off for mental health days, and they no longer go above and beyond—which they shouldn’t be because people doing the work aren’t getting promoted. It’s really a mental health crisis.”
HR Generalist
How HR can stay ahead:
- Offer an employee assistance program (EAP): Include an EAP in your benefits package, so employees can access mental health counseling and other wellness resources, such as mindfulness workshops.
- Promote a culture of psychological safety: Foster a culture of open communication where employees feel safe sharing their needs and concerns, and lead initiatives to reduce stigma around mental health issues.
- Train your team in mental health first aid: Train your HR and leadership teams on how to recognize and respond to mental health emergencies.
- Educate employees on their rights: Make sure employees know their rights, including their right to a safe workplace free of violence and harassment. Provide clear guidance and resources for safely deescalating and reporting workplace violence.