Staffing budgets swell as contract labor costs level off: Report

Tight hospital margins and chronic staffing troubles have led many healthcare organizations to reevaluate their hiring strategies, as evidenced by a May 23 Kaufman Hall report. 

The healthcare management consulting firm gathered proprietary financial and operational data from nearly 1,000 hospitals' general ledger and payroll to craft its "Health System Workforce Market & Solutions" report. 

Five key findings: 

1. Contract hours relative to paid hours were up 91 percent in March 2023 from March 2020. 

2. Health systems' labor expenses increased 20 percent between March 2022 and March 2023, "largely driven by growth of contract labor," the report says. In 2023, contract labor wages have remained more than 150 percent higher than pre-pandemic levels. 

3. However, contract labor wages have leveled off after peaking in the early months of 2022.

4. Talent acquisition spending increased 27 percent from March 2022 to March 2023 compared to pre-pandemic levels. 

5. Learning and development spending hit its highest point since March 2020 in March 2023. Kaufman Hall estimates health systems will spend $27.7 billion on learning and development for employees in 2023. 

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