Addressing COVID-Related Staffing Shortages: Strategies to Recruit and Retain Employees

Issue March/April 2023 April 2023 By Yelena Greenberg and Sapna Jain
Health Law Section Review
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From left: Yelena Greenberg and Sapna Jain

Health care staffing continues to be a challenge for hospitals and health care systems across the country that are stretched thin due to staff burnout from COVID-19, lack of sufficiently trained staff, and high employee turnover. Failure to adequately staff for workforce needs within a hospital effectively limits the service lines or volume of services that hospitals can provide and can significantly impact the ability to provide patient care. Cost-effective, long-term solutions that support retention and recruitment of the hospital workforce are sorely needed. 

Third-party nurse staffing agencies

As a result of COVID-19, many hospitals continue to rely on temporary nurse staffing agencies to fill critical nursing gaps with travel nurses. Key contractual terms in agreements with temporary nurse staffing agencies that were previously nonstarters, including increasing traveler nurse compensation rates, were, and continue to be, negotiated or accepted by hospitals as staffing demands increase. Hospitals further incentivize traveler nurses to stay on for a set term with sign-on bonuses that traveler nurses would be required to repay if they voluntarily separated from the role under the applicable temporary staffing agency agreement. As travel nurse compensation exceeds that of full-time employed nurses, many directly employed nurses are incentivized to increase their compensation by seeking temporary roles, including in other locations with more pronounced shortages. This incentive has led to further turnover among the health care workforce. 

And yet, for a number of reasons, contracting with temporary staffing agencies is only a short-term solution. First, these staffing arrangements are expensive and may not be feasible for cash-strapped hospitals. Second, hospital staffing needs can shift unexpectedly, and contracts with a temporary staffing agency may have unfavorable termination provisions that make early termination infeasible or expensive for the hospital. Third, compensation under these staffing arrangements is high in relation to full-time employment compensation rates, creating a dual compensation system between traveler nurses and employed staff. This disparity is a source of discontent among existing employed staff and could incentivize employed staff to seek other opportunities. Fourth, turnover or retirement of nursing leadership poses a barrier to effective mentoring for employed nurses and integration of traveler nurses into the nursing team. Fifth and relatedly, traveler nurses are not well integrated into the hospital as an organization and could undermine a hospital’s other workforce retention and branding strategies. Longer-term solutions are needed to address staffing challenges.

Internal staffing agency model

Hospitals and health care systems are searching for cost savings. Some hospitals have reportedly established internal temporary nurse staffing programs to recruit and hire temporary staffing directly. Doing so might help hospitals avoid some of the mark-up on compensation rates imposed by staffing agencies and also avoid protracted negotiations with staffing agencies and unfavorable contract terms. On the other hand, until demand for staffing moderates and travel nurse compensation decreases, this solution may not address the disparity in compensation for the same services among travel nurses and employed staff, and subsequent discontent among full-time employed staff. 

Moreover, hospitals that internalize their temporary staffing function will have to address how such staff would be characterized for employment purposes, whether benefits would be included, and, if a labor union represents the hospital’s similarly situated employed staff, whether the temporary staff are covered by the collective bargaining agreement. Hospitals considering establishing an internal staffing agency may try to address these barriers by: establishing an internal staffing agency through an affiliate; imposing strict parameters on the temporary nature of the roles, such as a maximum term; and offering no benefit plans or plans that meet the minimum criteria under the Affordable Care Act. Despite the potential cost savings, effectively insourcing the recruitment function might still be prohibitively expensive and administratively burdensome for many hospitals or health care systems. Hospitals and health care systems will have to manage an additional employment structure and recognize the potential for increased liability such as that faced by traditional staffing agencies. It is critical for hospital and health care system employers with unionized workforces to review the collective bargaining agreement to avoid running afoul of any provisions. 

Notwithstanding these concerns, hospitals that effectively bring the recruitment function in-house for at least part of their staffing needs can experience additional benefits, such as: (a) aligning recruitment with internal branding strategies to champion the hospital as a desirable employer; (b) aligning recruitment (e.g., including nurses, allied health professionals and environmental service personnel) with the priorities of the hospital, including the hospital’s diversity, equity and inclusion goals; and (c) beginning to re-establish pay equity among similarly situated staff. These types of investments in recruiting will likely help build a more enduring and engaged health care workforce to counter potential turnover. 

Third-party recruiting firms

In addition to temporary staffing, hospitals and health care systems are looking to increase their capacity to recruit full-time staff. Some third-party recruiting firms offer to conduct searches for specialized clinic staff, while others have begun to offer large-scale recruitment initiatives aided by software that electronically connects hospitals with available staff. Although the upfront investment to engage a firm to recruit dozens of staff members (e.g., 50 or more nurses) is not insignificant, engaging a single firm for recruiting may help streamline the recruiting process and provide a steady flow of needed staff over a designated period of time (e.g., six months to one year). Unlike the temporary staffing agency model, these firms operate more as online marketplaces for staff and do not directly employ the staff members. Although they perform basic vetting of candidates, these arrangements may provide fewer assurances as to the qualifications or competence of individual staff members, and the hospital’s human resources department must maintain the responsibility of selecting individuals who satisfy the hospital’s requirements and needs.

Retention efforts

Hospitals are also making greater efforts to retain existing staff, including by offering staff nurses the opportunity to work for multiple hospitals or clinical settings, or allowing staff to choose which department(s) of the hospital they would like to work in, rather than imposing rigid requirements to specialize in a single hospital department. Allowing staff the flexibility to choose their work setting may further expand clinical training opportunities and increase job satisfaction, as staff may experience working with patients along the spectrum of health. Doing so may also help avoid burnout, particularly for nurses and allied health professionals working in high-stress emergency settings, including the COVID-19 clinic of a hospital. With these types of efforts, it is important for the hospital to understand how the relationship of its various entities will be viewed under laws such as the Fair Labor Standards Act, which could require payment of overtime compensation. Hospitals should also consider the implications of having staff work simultaneously in both a union and nonunion setting. 

Hospitals are also experimenting with a number of other retention initiatives aimed at making the hospital more employee-centered, including: 

  • increasing opportunities for professional growth, such as offering courses and expanded tuition reimbursement;

  • increasing emphasis on diversity, equity and inclusion initiatives;

  • providing on-site child care;

  • paying internal recruitment bonuses for referrals;

  • offering retention bonuses;

  • implementing wellness campaigns to encourage practices such as meditation, yoga and healthy eating;

  • empowering frontline staff to improve workflows and efficiency; and

  • making renewed efforts to guarantee certain work shifts or to avoid shift cancellations. 

Key takeaways

COVID-19 has exposed weaknesses in the overall health care workforce staffing. Hospitals and health care systems can respond by implementing new strategies to increase recruitment of temporary and permanent staff, and retention of existing staff members. This article outlines strategies and key factors to consider, including: 

  • Utilization of third-party temporary staffing agencies, and the associated costs and short-term benefits;

  • Opportunities associated with bringing the recruitment function in-house with the establishment of internal staffing agencies;

  • Renewed emphasis on third-party search firms that can scale recruiting efforts using technology to offer a large number of full-time candidates in a relatively short period of time; and

  • New strategies to retain existing staff. 
As COVID-19 appears to continue to challenge hospitals and health care systems, these strategies may become more commonplace to ensure hospitals and health care systems can adequately staff their health care workforce needs to enable the provision of patient care in a cost-effective manner. 

As a member of Robinson+Cole’s Health Law Group, Yelena Greenberg advises hospitals and health systems, as well as university health centers and clinical programs, on a broad range of regulatory compliance matters involving fraud and abuse, health care privacy, 340B compliance and determination of need. She also negotiates various vendor agreements, clinical affiliations and professional services agreements.

Sapna Jain, a member of Robinson+Cole’s Labor, Employment, Benefits + Immigration Group, advises clients on general employment matters, including anti-discrimination and anti-harassment laws as well as restrictive covenants. Jain also has investigated complaints of discrimination and harassment and conducted trainings on these topics. She represents clients in various stages of civil litigation, including in federal and state court, and before administrative agencies.