Amid persistent shortages in nursing and other clinical specialties, health system human resources leaders are becoming more strategic about where compensation dollars are allocated.
Ongoing budget constraints and uneven labor market conditions require a more targeted approach to compensation rather than across-the-board increases, Elisabeth Klar, PhD, CHRO of Springfield, Ill.-based Memorial Health, told Becker’s.
“Instead of spreading limited resources broadly, we are focusing investments on roles that are hardest to recruit or retain, as well as those experiencing the most significant movement in the external market,” Dr. Klar said. “This approach allows us to direct compensation dollars where they can have the greatest impact on workforce stability and operational needs.”
Given persistent financial pressures across the industry, Chapel Hill, N.C.-based UNC Health is also approaching compensation planning with a strong focus on targeted investments, Janel Lancaster, UNC Health’s system vice president of compensation, HR services and HR technology, told Becker’s.
“Directing resources to roles experiencing the greatest market pressure or operational risk allows us to protect critical talent and maintain competitiveness where it matters most,” Ms. Lancaster said. “While broad-based increases remain an important tool for overall equity and morale, our priority is ensuring each compensation dollar drives the most meaningful impact.”
Cincinnati Children’s is combining both approaches — targeted and broad investments — CHRO Peter Adebi told Becker’s. Broad adjustments remain important for engagement and equity, and targeted investments in critical roles address specific market gaps and operational risks, he said.
Oklahoma City-based OU Health is prioritizing targeted investments in roles that directly affect patient care, access and operational performance. Its approach is disciplined, data-driven and anchored in workforce stability indicators such as retention, vacancy pressure and external market movement, CHRO Jimmy Duncan told Becker’s.
The roles receiving priority
For systems prioritizing targeted roles for limited compensation dollars, positions essential to patient care that are challenging to recruit or retain are key focuses.
“Our approach is data-driven and grounded in collaboration with operational leaders to ensure investments align with both workforce realities and organizational priorities,” Ms. Lancaster said. “The goal is to balance competitiveness with transparency and financial stewardship.”
Attleboro, Mass.-based Sturdy Health is prioritizing nursing and key roles within diagnostic imaging, such as radiology, ultrasound and computed tomography, where the system is seeing the greatest market pressure and recruitment challenges, CHRO Natalie Cook told Becker’s.
OU Health is focused on nursing, pharmacy, respiratory therapy, advanced practice providers, and behavioral health roles because of their persistent shortages and direct impact on patient safety and access, Mr. Duncan said.
“These functions carry the highest operational risk when understaffed,” he said. “Investing in these areas provides the greatest return through higher engagement, improved retention, reduced premium labor and stronger patient outcomes.”
Each year, Scottsdale, Ariz.-based HonorHealth assesses its labor market and aims to be as targeted as possible while maintaining an intentional focus on staff in the lower pay ranges, CHRO Wayne Frangesch told Becker’s.
“Cost of living in our local market has only increased and although we often talk most about and certainly have a focus on our physicians, nurses and other direct patient caregivers, we are also trying to be able to maintain family supporting wages for our more entry level employees who are vital to our overall patient experience,” he said.
The data CHROs uses to guide decisions
Systems are also turning to key signals to guide decisions on workforce investments and compensation. For Gainesville, Fla.-based UF Health, leaders are evaluating labor market competitiveness — especially for key roles such as nursing, allied health and specialized clinical positions — and analyzing time to fill, turnover trends and how those compare to market benchmarks, CHRO Ed Daech told Becker’s.
“We’re also paying close attention to internal equity and workforce sentiment: what our employees are telling us about pay, workload and overall value. As we continue to grow as a more integrated health system, consistency across roles, departments and regions is becoming even more important,” he said. “And like many health systems, we’re balancing all of that with financial realities such as reimbursement pressures, rising labor costs, and the need to invest thoughtfully while maintaining long-term sustainability.”
UNC Health is also pairing external market benchmarks with internal workforce insights, such as retention trends, time to fill, candidate volume and offer acceptance rates.
“Evaluating these indicators together helps us pinpoint whether compensation is the driving challenge or if broader workforce or operational factors are influencing results,” Ms. Lancaster said.
Beyond base pay
Health systems are also turning to workforce investments beyond compensation.
Competitive pay remains essential at Clearwater, Fla.-based BayCare Health System — especially in today’s highly competitive healthcare labor market — Nikki Daily, chief team resources officer, told Becker’s. Over the next 12 to 18 months, developing team members through skill building, tuition assistance and clear career pathways will be the most important workforce investment, she said.
“Supporting growth within our existing workforce helps strengthen retention and prepares team members to step into critical clinical roles where skilled professionals are in short supply,” she said.
Omaha-based Nebraska Medicine is also focused on creating career paths and targeted upskilling, along with a more intentional, generational approach to designing employee experience, workforce strategy and rewards and recognition, Katie Beach, vice president of people strategy, told Becker’s.
At Nashville, Tenn.-based Vanderbilt University Medical Center, the transition toward comprehensive, provider-led health savings programs that eliminate financial and navigational barriers inherent in traditional insurance will be the most important workforce investment over the 12 to 18 months, Ruchika Talwar, MD, medical director of the Office of Episodes of Care Population Health, told Becker’s. The system has implemented MyHealth Bundles for its employees, moving away from fee-for-service toward a healthcare model that offers no out-of-pocket costs and dedicated patient navigation.
“The results of this investment have been tangible,” Dr. Talwar said. “We’ve seen a significant increase in benefits engagement, improvements in employee health, and an overall decrease in healthcare costs for our organization and employees. For us, the decision to invest in these bundles is a decision to provide a more stable, high-quality and predictable healthcare experience for our workforce.”
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