Healthcare labor shortages may be easing up, Bank of America report finds

From worker burnout to staffing shortages, all the news coming out about the healthcare sector’s workforce seems to be consistently bleak—but in reality, the healthcare employment situation isn’t as cut-and-dried as it seems.

According to a report from Bank of America, healthcare payrolls have increased in the past year, recovering from the dip in nonessential healthcare services that happened during the pandemic. We’re still not quite back on track yet—the report says current healthcare employment levels are still below the pre-pandemic trend—but there are “signs of recovery,” according to Bank of America, especially for small healthcare businesses.

As for why healthcare employment levels are lower than expected, it may be because while there’s been considerable payroll growth, payroll spending is relatively low, suggesting that wage growth in the healthcare industry is slow, according to Bank of America.

Slow wage growth also reflects the most commonly brought up complaint for worker burnout, which according to Bank of America is “inadequate pay.”

One of the most significant indicators of stabilizing employment levels in healthcare, though, is the growth rate of contract labor within small healthcare businesses. Contract labor became commonplace as staffing shortages worsened during the pandemic, and many providers turned to hiring temporary workers to make up the difference, Bank of America’s internal small business data found.

Once outpacing the growth rate of permanent payrolls, the growth rate of contract labor decreased over a year to 2%—down from 60%. In comparison, the growth rate of payrolls increased to 17%, up from around 5%.

According to Bank of America, this ease in reliance on contract labor could “imply normalizing employment growth ahead.”