How can healthcare organizations attract and retain top talent

The state of talent in the healthcare industry

Few industries have experienced the same transformation and strain as healthcare in recent years. While service demand continues to rise, the size of the qualified talent pool has not, especially in clinical roles. Between 2000 and 2025, healthcare's share of the total US workforce grew from 9% to 13%, reflecting the sector's expanding footprint and vital role in the economy.

However, the growth in demand has brought new challenges. Government programs like Medicare, Medicaid, and veteran's benefits fuel industry expansion, while the aging population drives higher care utilization. Yet hospitals, health systems, and long-term care facilities struggle to quickly fill critical positions to meet patient needs.

The Bureau of Labor Statistics anticipates that healthcare employment will increase faster than the average for all occupations through 2033. For HR and total rewards leaders, competition for talent, especially skilled clinical workers, will remain intense for years.

The 4 biggest challenges in staffing and recruiting in the healthcare industry

The healthcare industry faces numerous challenges in the year ahead, four of which are outlined below.

1. Staffing shortages across the continuum

The most pressing healthcare talent trend is the shortage of qualified professionals. Nursing shortages are expected to reach 500,000 Registered Nurses (RNs) by the end of 2025. This is driven by nurses leaving the profession, insufficient enrollment in nursing education, and an aging population requiring more care.

Physician shortages are also worsening, with the Association of American Medical Colleges projecting a deficit of up to 124,000 physicians by 2034. Meanwhile, the US could face a shortfall of 3.2 million direct care professionals by 2026, including home health aides, medical assistants, and nursing assistants.

These shortages have real consequences: longer wait times, heavier workloads, and increased stress for those who remain. Healthcare systems are responding with workforce development initiatives, policy changes, and an increased focus on technology, but progress takes time and as employee expectations continue to shift, are employers doing enough?

2. Burnout and turnover

A 2025 survey found that 65% of nurses report high levels of stress and burnout, and only 39% plan to stay in their current position over the next year. The combination of long hours, administrative burden, and emotional fatigue erodes engagement and well-being across healthcare roles.

Healthcare talent trends show that turnover remains a challenge as well. While voluntary turnover has decreased to a median 14%, specific roles still see a higher churn:

• The turnover of Licensed Practical Nurses (LPNs) has increased to a median 18%, but it is still lower than in 2023 and 2022.
• Nursing Assistant turnover has stabilized at a median 26%, which is higher than in 2023 but lower than in 2024.
• Medical Assistant turnover has stayed at a median 19% for the last few years.

Healthcare employers are increasingly investing in workforce well-being programs, flexible schedules, and creating a positive work environment as part of their retention strategy. Addressing burnout at a systemic level, not just individually, will continue to be a key differentiator in the years ahead.

3. Layoffs and financial strain

Even as the industry battles shortages, some healthcare systems are tightening their operations in response to financial pressures. Between January and July 2025, major hospitals and health systems collectively eliminated an estimated 15,000 to 20,000 positions, reflecting persistent financial pressures, payer mix challenges, and federal funding cuts. Workforce instability is affecting all sizes of healthcare organizations, ranging from small community hospitals to large academic medical centers as well as federal health agencies such as the CDC, FDA, and NIH.

Healthcare organizations also face rising workforce expenses fueled by competition, inflation, and reliance on premium contract labor. At the same time, reimbursement rates have not kept pace with the rising cost of care. For HR leaders, this reinforces the importance of maintaining compensation structures that are both sustainable and competitive, supported by robust, industry-specific data.

4. Adapting to new models of care

As workforce and cost pressures mount, healthcare organizations are reimagining how and where care is delivered. Telehealth and other digital health tools have expanded access to underserved populations, while hospital-at-home programs allow patients to receive acute-level care from the comfort of home. Advances in genomics, AI, and data integration are enabling more personalized and efficient care models.

These innovations are reshaping workforce design. Roles that once required on-site presence are now being redefined for virtual or hybrid delivery. Automation and AI are streamlining various healthcare operations, both reducing errors and costs. A shift toward value-based care models is further driving the adoption of technology and integrated care models. Technology is also creating new talent needs, ranging from AI specialists to data analysts, further broadening the definition of what "healthcare work" looks like.

Insights from Mercer's compensation survey

As talent pressures evolve and the healthcare workforce continues to transform, compensation strategy has become critical for attraction and retention. That's where Mercer's US Healthcare Compensation Survey Suite comes in. For more than 30 years, Mercer has provided healthcare organizations with the trusted, data-driven insights they need to make informed pay decisions.

The 2025 Healthcare Compensation survey includes data from 2,846 organizations and over 3 million incumbents across 778 positions. It covers every level of the healthcare workforce and provides the most comprehensive view of pay practices in the industry.

Here are some key findings from 2025:

• Salary budgets have remained steady at around 3% for the past four years, even as salaries have increased at higher rates to stay competitive.
• RNs saw base pay increases of 4% for Levels 1 and 2, and 3% for Level 4, reflecting ongoing demand for nursing talent.
• Regional difference persists: The Northeast region experienced the most significant increase (9%) for RN Level 2 roles, while the South Central region saw slower growth.
• Shift differentials remain a meaningful part of pay for many clinical workers.
• Mercer added 33 new jobs to the 2025 survey, reflecting emerging functions in technology and home-based care.

This detailed benchmarking allows HR and total rewards professionals to compare pay practices across markets, facilities, and job families. It also helps ensure compensation structures remain fair, competitive, and aligned with organizational goals.

While healthcare salary surveys provide a solid foundation, Mercer's consulting and advisory services help organizations translate data into strategy. Our experts work alongside HR leaders to address pay equity, workforce analytics, and long-term talent planning. By combining compensation insights with workforce data, healthcare organizations can make decisions that attract top talent.

Planning ahead and preparing for the future

The healthcare industry will continue to balance the competing demands of cost, quality, and workforce stability. Inflationary pressures, reimbursement challenges, and the growing complexity of care delivery will keep compensation planning high on every HR leader's agenda.

To help organizations stay ahead, Mercer is introducing several enhancements designed to streamline survey participation and improve access to actionable data. We offer:

• Mercer Data Connector: The IHN Healthcare Survey will transition to Mercer Data Connector in 2026. This will eliminate the manual data validation files, providing a more user-friendly and efficient experience. With real-time validation, data pre-population, and centralized access, participants can seamlessly upload and manage survey submissions.
• Mercer Job Library: In 2027, the IHN Healthcare Survey positions will transition to the Mercer Job Library. This will bring a single, global job catalog to the healthcare survey framework. This enhancement will make it easier for organizations to map roles consistently across business units and geographies.

These advancements reflect Mercer's ongoing commitment to innovation and client experience. By improving the quality, accessibility, and consistency of compensation data, Mercer empowers healthcare organizations to make smarter, faster, and fairer pay decisions.

At Mercer, we're proud to partner with healthcare organizations nationwide to help them navigate these challenges. Through our healthcare salary surveys, consulting expertise, and forward-looking insights, we help employers attract, retain, and reward the people who make quality care possible.

For more information on what solutions Mercer has for the healthcare industry, give us a call 855-286-5302 or email us at surveys@mercer.com.