2017 healthcare compensation trends

October 09, 2017

*For more current trends in healthcare compensation, please read Healthcare & HR: 7 Key Trends You Need to Know

In an industry that is undergoing constant reform and evolution, healthcare HR professionals have to go above and beyond to make sure their facilities are properly staffed and within budget. When it comes to compensation planning and payroll budgeting, these efforts are complicated by ongoing healthcare trends like staffing shortages, employment types, and fluctuating compensation policies.

From the healthcare industry’s increased usage of per diem workers, to its constantly changing pay differentials, there’s no shortage of challenges to keep up with. Here, some of the most common trends in healthcare are spotlighted to provide workforce management experts with a solid starting point for their compensation planning needs.

Healthcare Compensation Trend: Pay Variables Are Important Compensation Planning Factors

Many factors impact how supplementary pay is distributed, but “shift differential” is one of the most common. Typically, employees who work “normal” shifts are compensated with base hourly rates, while employees working “less desirable shifts” are compensated with higher rates, which take the form of shift differentials.

For example, the third shift has long been seen as the least desirable set of hours to work. As a result, higher pay rates are offered as compensation. However, recently there’s been a movement toward the second shift being the same as or higher than third shift in some locations. While not widespread, this has resulted in a slow but important change in the status quo that must be considered.

Indeed, workforce management professionals must always be ready to address these issues in their compensation planning. Still, there’s a multitude of ways in which different organizations go about determining their shift differentials. For example, Mercer’s 2017 healthcare research found that organizations determined their shift differentials by varying factors:

Healthcare Compensation Trends shift differential graph

Similarly, many healthcare facilities offer varying levels of supplementary pay for different types of work. These pay incentives also vary between organizations, as seen in the following findings:

Healthcare Compensation Trends supplementary pay graph

Any one of these subtle healthcare trends could affect a compensation planning strategy, meaning compensation management professionals must always stay as up to date and as informed as possible.

Healthcare Compensation Trend: Per Diem And Stand-By Workers Offer Cost-Effective Staffing Solutions

One popular solution to the healthcare industry’s ongoing staffing shortage is the use of per diem employees. By relying on these workers to fill vacant roles on an as-needed basis, HR professionals can better ensure that facilities are adequately staffed. Mercer’s 2017 healthcare research confirmed that this “by the day” type of work is indeed becoming more popular as facilities attempt to keep pace with increasingly unpredictable market demands.

Still, different organizations have different methods of acquiring per diem assistance, each of which comes with its own unique pay rates that can further complicate payroll budgeting and compensation planning. For example, Mercer found that:

  • 63% of surveyed organizations used both agency and their own per diem workers.
  • 31% of surveyed organizations only used their own per diem workers.
  • 4% of surveyed organizations used no per diem workers at all.
  • 1% of surveyed organizations only used agency per diem workers.
  • 1% of surveyed organizations responded with “Other.”
  • Additionally, 57 organizations responded when asked what percentage of their employees was per diem. Cumulatively, the average came out to be 10%, while the median was 9%.

Many HR healthcare professionals also continue to pay stand-by workers to remain on call for emergency situations; in fact, 80% of surveyed organizations said they pay their employees for this type of work. Looking at this compensation data, it’s clear that per diem and stand-by workers will continue to play a pivotal role in the healthcare workforce for some time.

Healthcare Compensation Trend: Data-Oriented Positions Are More Prominent

It’s no secret that technology is constantly transforming the world around us. In much the same way, constant innovations in healthcare are reshaping the very face of the medical industry as well as its workforce. From electronic medical records to refined system intelligence, nurses and physicians alike have to be carefully trained to navigate these increasingly complex frameworks. Meanwhile, technicians have to be taught how to maintain and repair this expensive equipment. As a result, many new jobs are being created around technology and, more specifically, data management.

One of these jobs is the “Data Warehouse Programmer Analyst” position, which requires workers capable of reviewing, developing, and storing patient information inside complex organizational databases. Looking at same organization, same job market changes, Mercer’s 2017 research found a base salary increase of 6.8% over 2016 results for this position. Looking at same organization, same job market changes, this position also saw a 17% increase in total number of employees.

Of course, this is just one of many examples showing how the healthcare industry is becoming increasingly digitized, resulting in the demand for brand new job types and employees capable of filling them. Workforce management professionals must be ready to plan accordingly.

Workforce Management Solutions to Optimize Your Healthcare Compensation Planning

Want to start working with this data directly to view compensation details and trends for individual healthcare positions or specific geographic markets? Mercer offers a full suite of healthcare-related salary surveys that provide in-depth compensation data on the various aspects of the healthcare industry, giving you the data you need to optimize your HR healthcare strategies and compensation planning efforts.