As the largest employer in the United States, the healthcare industry has a huge influence on American society and our economy. However, the healthcare industry is currently facing significant challenges, especially since the COVID-19 pandemic.

The challenges in healthcare today require innovative solutions, particularly from the HR department. With staffing challenges, rising labor costs, and data security issues, how should the healthcare industry respond?

Healthcare staffing shortages

The past few pandemic years have been particularly harsh on the healthcare industry. A lot of healthcare workers were left feeling burnt out and many left the profession. Those who remain tend to feel overwhelmed with the demands of the job. Healthcare staffing shortages include not only doctors and nurses, but other health professionals like therapists, medical technicians, and support staff.

Healthcare staffing shortages can have profound ripple effects in the industry, causing decreased quality of care, longer waiting times, and a higher risk of medical errors. The overworked and stressed healthcare professionals likely experience reduced job satisfaction and an increase in mental health issues, further perpetuating this cycle.

How to address burnout in healthcare

Burnout is one of the most serious causes of staffing shortages. It is a state of mental, physical, and emotional exhaustion typically caused by prolonged, excessive stress. In the healthcare industry, this is sometimes called the “silent epidemic.” One report showed that 62% of employees in 2023 were experiencing some degree of burnout.

So, how can the healthcare industry address the risks of burnout for its employees? Here are a few strategies to consider:

• Recognition and validation: The first step in addressing burnout is acknowledging its existence and validating the experiences of your healthcare employees. Create a work environment where it’s okay to talk about burnout without fear of judgment.
• Workload management: Prioritizing workload management is key to preventing burnout in the first place. This means management needs to set realistic schedules with adequate staffing and equal distribution of the work among the team members. You can use staffing technology to help streamline this process.
• Professional development and training: By investing in ongoing professional development and training opportunities, you can help your healthcare workers feel empowered and engaged in their work. These training opportunities can foster a sense of growth and fulfillment.
• Work-life balance: Encouraging better work-life balance can help stave off burnout. For the healthcare industry, this could mean offering flexible scheduling options, improving access to childcare, and promoting wellness programs for both physical and mental health. Encourage your employees to take regular breaks and use their vacation time.
• Peer support and counseling services: A peer support program along with access to counseling services can give healthcare professionals a safe space to seek emotional support and talk about their experiences.

Healthcare labor costs

One of the most significant factors driving up the price of healthcare is the cost of labor. However, issues like nursing turnover, employee retention, and wage increases can make this issue even more challenging.

1. Nursing turnover

High nursing turnover rates can seriously affect overall patient care and contribute to the increased costs of labor in the healthcare industry.

High turnover rates are caused by a variety of factors including:

• Burnout
• Inadequate staffing
• Workplace dissatisfaction
• Lack of professional development opportunities

Addressing high turnover rates requires employers to prioritize supportive work environments, ongoing education and training, and effective leadership.

2. Employee retention in healthcare

In addition to high rates of turnover for nurses, the healthcare industry has a problem with overall employee retention. Employees are either leaving the healthcare industry completely or finding more lucrative or flexible positions elsewhere.

To address the retention issues and attract the talent they need, employers should prioritize offering competitive compensation and benefits packages, while also implementing strategies that support the well-being and work-life balance of their employees. By improving retention rates, healthcare employers can reduce some of their labor costs.

3. Healthcare wage increases

Healthcare wage increases are critical if you want to attract the best-skilled workers in the industry. As workers’ shortages have increased, so have wages increased. These increases serve as a way to acknowledge the hard work and dedication of these critical workers. While putting a strain on the budget, wage increases can also help mitigate burnout, employee turnover, and workforce shortages.

Data security in healthcare

As a healthcare organization, you are entrusted with a vast amount of personal and medical data, ranging from patient health records to billing information. This makes the healthcare industry a prime target for cyberattacks. In a 2023 survey, 33% of healthcare leaders said data security was one of their top challenges.

Healthcare organizations must have a robust data security network that ensures they comply with regulations like HIPAA and maintain the trust of patients and stakeholders.

A strong data security network will include things like firewalls, access controls, encryption technology, and routine security audits. Healthcare organizations should also educate their staff about data security best practices.

Cybersecurity costs in healthcare have become a necessary investment as the industry increasingly relies on digital technology to maintain and manage patient data. Unfortunately, this means that the industry also faces an ever-growing cybersecurity threat.

While paying for advanced cybersecurity technology may feel expensive to some organizations, it is no match to the cost of a data breach. Healthcare data breaches are some of the most expensive types of breaches.

In 2023, the average data breach cost an organization $4.45 million, while a breach in the healthcare industry was an astounding $10.93 million. Organizations need to weigh the costs of their cybersecurity networks against the cost of a potential data breach.

A trusted advisor can help address the challenges in healthcare

While the healthcare industry has numerous challenges to work through, here at Mercer we’re ready to roll up our sleeves and help.

You can take advantage of our salary surveys specific to the healthcare industry to determine if you are offering competitive wages and benefits to your healthcare workers. You can also use some of our other surveys, like Inside Employees Minds, or run your own Employee Listening survey to get insights into what your healthcare workers are feeling and what they need from their employers to thrive in the workplace.

For more information on what solutions Mercer has for the healthcare industry, give us a call at 866-605-1031.