Hourly employees represent a significant portion of the healthcare workforce. Turnover and competition have always been high for these positions, and the situation is complicated by overall demand for workers that outpaces supply. These factors are forcing organizations to revisit healthcare hiring wages and benefits as a competitive advantage as well as a societal benefit.
The federal minimum wage has stagnated at $7.25 per house since 2009. While many states and municipalities have higher rates, most wage workers cannot make a sustainable living on 40 hours per week. Despite headlines touting a $15 living wage, most analyses put the number at closer to $20 before taxes.
For some context, data from the Bureau of Labor Statistics shows that the mean hourly wage for environmental services staff (such as janitors and building cleaners) was $13.98 in 2020. The situation was slightly better for healthcare support workers (such as occupational therapy assistants and medical transcriptionists) at $19.92. Subtract taxes, insurance and other expenses, and the real dollar amounts are even lower.
The compensation issue is even more harmful to part-time employees, who are often paid less than full-time hourly workers, and are least likely to have employer-provided health insurance and other benefits. This wage and benefit “penalty” makes it even harder to make a living – and to stay well.
Healthcare organizations are keenly aware of poverty as one of the social determinants of health and invest resources in helping patients address these challenges. There is a rising call for healthcare employers to bring the same attention to poverty’s impact on their own staff.
In an essay on the Institute for Healthcare Improvement blog, Donald M. Berwick, MD, MPP, FRCP, challenged healthcare employers to begin “fixing the social conditions that are creating and aggravating the stresses of so many people who work in health care, not to mention the populations they serve.” He went on to suggest two actions that would improve the situation for low-wage workers:
- Re-examine healthcare hiring wages. While higher wages are a bottom-line issue, chances are good that the wage expense could be less than the cost of turnover, replacement, absenteeism and lower productivity. The IHI reports that some of its members now guarantee a local or regional living wage to hourly employees. Beyond the competitive benefits, paying a living wage contributes to health equity in your community.
- Improve benefits. According to Berwick’s essay, more than a million healthcare workers lack health insurance, sick days and family leave. Even more are denied access to ERGs and EAPs which can provide important social and emotional support. Coverage and perqs for hourly and part-time employees make your organization more appealing to workers in the job market and enhance brand reputation.
Enhancing your wage and benefits structure is a solid talent management strategy to overcome labor shortages, improve retention and extend your organization’s commitment to care.