SAN FRANCISCO – After a relatively good year compared to other sectors, the strength of the national healthcare labor market remained flat across a number of major metropolitan areas in the fourth quarter.
The HWS Labor Market Pulse Index, a quarterly barometer of local market healthcare workforce fluctuations released this week, posted a 3 percent decline in the fourth quarter of 2010 from the third quarter of 2010, after a 13 percent decline the prior quarter.
“Like the broader economic data, the healthcare labor market began the year with some marked improvement over the prior year and the promise of great strength by (the fourth quarter),” said David Cherner, managing partner of Health Workforce Solutions, which publishes the LMPI. “Unfortunately, that didn’t materialize, as many of us had hoped.”
Of the 30 major metropolitan markets the LMPI tracks, the near-term demand for healthcare workers was strongest in the Tampa, Fla., Riverside/San Bernardino, Calif., and Phoenix regions for the fourth quarter of 2010, while the Chicago and San Francisco Bay Area markets ranked at the bottom.
Cherner said the healthcare labor market likely won't experience more meaningful gains until later in 2011. However, he thinks those gains will be much more sustainable.
In other healthcare employment news, a new survey by the Philadelphia-based Hay Group found that U.S. healthcare employees can expect an average base salary increase of only 2.6 percent in 2011. While that’s up from base salary increases of 2.3 percent reported in 2010, it ranks slightly below increases of 2.8 percent reported across all U.S. industries for 2011.
According to the Hay Group’s survey, 18 percent of respondents across all industries reported they would maintain a salary freeze across all levels in 2011 to reduce compensation costs, while only 4 percent of respondents in healthcare reported an across-the-board freeze on salaries.
“Healthcare providers have felt the pinch, but salary budgets are beginning to move upward, mirroring the slow ascent we are seeing in the broader economy,” said Ron Seifert, vice president and executive compensation practice leader for the Hay Group’s healthcare practice. “Interestingly, healthcare salary trends are also starting to track those of other industries, which we haven’t seen for at least a decade.”
Fewer healthcare executives will see their salaries frozen in 2011, Seifert said, with 8 percent of organizations reporting a freeze of executive pay. That’s compared to a little more than 20 percent of organizations that reported freezing executive pay in 2010.
The Hay Group’s survey also shows a parity of planned salary increases for healthcare employees in 2011, with both executives and all employee groups seeing a 2.6 percent increase.
