Now Hiring ... Again

Healthcare Employment and the Churn Factor

The recent headlines about healthcare's hiring slowdown tell only half the story. While healthcare organizations added just 47,000 employees in August—the smallest increase since January 2022—the real challenge isn't a lack of demand for healthcare workers. It's a supply crisis complicated by an industry plagued with one of the highest employee churn rates in the economy.

The Supply-Side Reality

Jon Guidi, founder of staffing firm HealthCare Recruiters International, points to "a noticeable slowdown in job growth for positions that require professional licensure, such as nurses, physical therapists, and mental health therapists." The trend, he explains, "appears to be driven by near-full employment in these fields, coupled with a limited pipeline of newly licensed professionals entering the workforce to meet ongoing demand."

This isn't economic weakness—it's a capacity constraint. Healthcare has essentially maxed out its available talent pool. The industry faces what economists call a "tight labor market," where qualified workers are already employed and new graduates can't keep pace with demand.

The Churn Factor: A Hidden Driver

What complicates this supply shortage is healthcare's notorious churn problem. The average turnover rate for hospital employees stands at 20.7%, with registered nurses experiencing turnover rates of 16.4% nationally. In some departments, the statistics are staggering: emergency services, step-down, and telemetry units see cumulative turnover rates between 113% and 121% over five years, meaning these departments completely turn over their nursing staff in less than four and a half years.

The financial impact is crushing. The average cost of turnover for a single bedside registered nurse reaches $56,300, with hospitals losing between $3.9 and $5.8 million annually due to turnover-related expenses. These aren't just recruitment costs—they include training, productivity losses, overtime for remaining staff, and expensive temporary workers to fill gaps.

The Recruitment Trap

Here's where the churn factor creates a vicious cycle that directly impacts the hiring slowdown we're seeing today. Medical/surgical registered nurses take 80 to 109 days to fill, with an average of 94 days. Meanwhile, 30.2% of all new hires leave within a year, accounting for 40.4% of all healthcare turnover.

This creates a recruitment hamster wheel: organizations spend months finding qualified candidates, invest heavily in onboarding and training, only to watch nearly one-third leave within 12 months. The result? About 25% of hospitals haven't even tied their retention strategies to measurable goals, suggesting many are still treating symptoms rather than addressing root causes.

Beyond the Numbers: Why Healthcare Workers Leave

Nearly half of U.S. healthcare workers report burnout—fatigue, emotional exhaustion, and a creeping sense of "I can't do this anymore". According to the AHA 2023 Workforce Scan, a staggering 80% of people leave their jobs because they don't feel appreciated.

The retention crisis stems from multiple factors:

• Workload pressure: Understaffing creates unsustainable patient-to-staff ratios

• Poor work-life balance: Mandatory overtime and inflexible scheduling

• Limited career advancement: Lack of professional development opportunities

• Compensation concerns: 66% of nurses describe pay as their No. 1 consideration when planning their next career move

• Cultural misfit: Organizations that don't prioritize employee well-being

Rethinking Recruitment Strategy

The current hiring slowdown forces healthcare organizations to confront an uncomfortable truth: they can't recruit their way out of a retention problem. Traditional recruitment strategies—posting jobs, conducting interviews, making offers—are insufficient when you're essentially recruiting to replace people you just hired.

Smart healthcare organizations are shifting from a recruitment-first to a retention-first strategy. This means:

Investing in onboarding: Extended orientation programs (12 weeks for new graduates, 8 weeks for experienced nurses) led to a 17.6% decrease in turnover over four years. While the upfront cost was $11,066 per nurse, this pales compared to the $52,100 average replacement cost.

Addressing burnout proactively: Recognition programs, flexible scheduling, and adequate staffing levels aren't just nice-to-haves—they're financial necessities when turnover costs exceed $50,000 per employee.

Creating career pathways: Academic partnership programs that integrate students into unit culture reduced turnover from 23.9% nationally to just 7%.

The Bottom Line

The healthcare employment slowdown isn't signaling economic weakness—it's revealing an industry at a crossroads. With qualified workers in short supply and churn rates decimating existing teams, healthcare organizations must fundamentally rethink their approach to workforce management.

The solution isn't hiring more people faster. It's creating environments where the people you do hire want to stay. Until healthcare addresses its churn factor, it will continue running on a recruitment treadmill—expending enormous energy just to maintain staffing levels rather than building sustainable teams capable of delivering excellent patient care.

In a tight labor market with limited qualified candidates, retention isn't just an HR priority—it's a strategic imperative. 

About David Brake

DAVID is the Co-founder and CEO of OPTICS for Healthcare, an AI-first company dedicated to creating safer healthcare environments for staff, patients, and the public. The OPTICS platform was designed to revolutionize how healthcare organizations approach facility assessments, enabling them to conduct comprehensive current-state evaluations, generate detailed gap analyses, and develop customized workplace violence policies and action-specific operational playbooks.