HR in Healthcare: 9 Major Challenges to Solve

Mark Jackley | Content Strategist | March 17, 2023

Healthcare was already experiencing big changes before COVID-19, and the rate of change has only accelerated since 2020. Talent and staffing shortages abound and employee burnout and turnover levels are spiking, sometimes putting patient care at risk. These disruptions have presented major challenges to healthcare provider HR managers, who must invest more deeply in employees and find more-effective ways to motivate them to stay and ensure their best performance.

What Is HR in the Healthcare Industry?

Human resources—or human capital management—plays a critical role in every healthcare system. HR teams help improve health outcomes by supporting doctors, nurses, and others that deliver patient care. HR influences and refines operational processes, from patient intake and records management to safety protocols and more, helping hospitals and clinics run smoothly. HR also works with leadership to shape organizational strategies that benefit employees, patients, and the business.

In a hospital or clinic, the employee experience affects job performance, efficiency, and patient care, and HR teams have the power to help make every employee’s experience the best it can be. Besides sourcing, hiring, and onboarding new employees, HR is tasked with building a culture that encourages existing employees to stay. Ways to do this include listening to and acting on employee feedback, maintaining flexible scheduling practices, and managing talent development.

HR also advocates for employees, serving as a conduit between leadership and workers at all levels. HR teams must earn the trust of all employees to balance medical and business interests with the concerns of individuals and departments within the organization.

Key Takeaways

  • HR helps balance a healthcare system’s business objectives with the interests of employees.
  • While healthcare provider HR teams have many responsibilities, their main one is to maintain adequate staffing by hiring, developing, and retaining the best talent.
  • Because of staffing shortages, HR is spending more time on programs that attract and retain people while keeping up with other duties, such as ensuring legal compliance.

Why Is HR in Healthcare Important?

HR matters in healthcare for one reason above all others: Patients’ lives depend on the clinicians and staff HR supports. HR teams oversee the critical work of recruiting qualified talent amid an industrywide labor shortage and do everything possible—from updating compensation packages to providing technologies that make training more accessible—to retain the best employees.

HR also oversees the organization’s performance management process, ensuring employees get the feedback they need to excel in their jobs and deliver top-quality patient care.

In the healthcare industry, as in many other sectors, HR provides key input that influences organizational strategy and decision-making, helping providers solve problems more intentionally. For instance, instead of rushing to fix staffing shortages by hiring externally, HR might recommend changes to internal training and promotion practices, which could help them fill positions faster while also addressing the challenge of expanding career paths.

Increasingly, HR helps devise the organization’s business strategies, which is important because if HR isn’t involved in strategy, it can’t effectively support leadership’s objectives. For instance, if the C-suite decides to focus more on specialized medical services but HR is still recruiting generalists, a skills gap will emerge.

Along with the legal department, HR also oversees ethical matters (both medical and social), and HR managers are key players in ensuring the organization and its employees maintain compliance with internal policies and external laws and regulations.

The Evolving Role of HR in Healthcare

Though in certain ways HR’s role in healthcare hasn’t changed since the start of COVID-19—HR teams still hire and onboard people, help ensure workplace safety, and play an important in role in maintaining legal and regulatory compliance—HR now invests more in employee well-being as part of larger efforts to improve staffing and respond to pandemic-driven changes across the industry.

HR teams at hospitals spent much of 2020 and 2021 working in crisis mode, trying to ensure that shifts were covered and teams had what they needed to deliver the best possible patient care, as well as making sure employees had access to the mental health support so many needed. In a 2018 report, the American College of Healthcare Executives ranked financial challenges as the industry’s top concern, followed by patient safety and government mandates. In 2021, the top concern was personnel shortages.

As staffing became a bigger priority, healthcare executives gained a greater understanding of the value of doing more for employees and the positive impact HR can have with the right support. For example, HR teams haven’t lost sight of their role in promoting and enforcing legal compliance and workplace safety, but they now have leadership’s blessing to invest in employee engagement programs, including contests and fun events; clarify and expand career paths; rework scheduling policies to prevent staff burnout; and bolster pay and benefits.

9 Challenges for Healthcare HR

As HR teams shift priorities to focus more on employees, they must deal with the following challenges.

1. Hiring and Onboarding

By 2030, the US could face a shortage of 120,000 physicians. To maintain staffing, HR must explore new tactics to hire and onboard employees. According to Hospital & Health Networks magazine, only 29% of millennials use online job boards. To reach younger professionals, some HR teams are partnering with their marketing departments to use search engine optimization and lead tracking to better attract and pursue candidates. Others offer signing bonuses and help pay moving expenses. Automated systems can improve the onboarding process by more efficiently scheduling new-hire orientation sessions, related training, and benefits enrollment, while assigned mentors can help accelerate and personalize the onboarding process, giving new employees valuable guidance and a sense of support and connection. Another best practice: On day one, make sure new hires have access to the technology they need—and understand how to use it.

2. Training

More than any other industry, healthcare needs employees to keep their training current, as outdated skill sets will degrade clinical care. Some HR teams partner with training institutes; others offer their own training onsite or remotely. One big focus area is ensuring that clinicians and support staff are up to date on required licenses and certifications. A cloud-based training platform will automatically track compliance, notify employees of their obligations, and link them to the courses they need. Training is also a key part of talent development—an area many employers should seek to improve if they want to help boost job satisfaction and retention. According to recent research, 85% of employees aren’t satisfied with their employer’s support of their career.

3. Managing Schedules and Payroll

Most people don’t think of logistics when they think about human resources, but managing hospital shift scheduling is a complex logistical challenge, especially during chronic staffing shortages. A large healthcare facility may manage hundreds of different rotations of doctors, nurses, contract employees, visiting physicians, and other staff. Getting the scheduling right is essential: One study showed that 33% of critical care nurses and 45% of critical care physicians have experienced severe burnout. HR should help create flexible schedules that are easy to communicate, access, and change when needed.

Payroll presents another HR logistical challenge. Some healthcare workers, such as therapists and surgeons, get paid as they treat individual patients. Others are salaried and may have bonus incentives. Without sound logistics, paychecks might arrive late or contain errors. Another key payroll challenge is managing labor costs. Healthcare employers are containing these costs in several ways, including by analyzing overtime and premium pay, such as double-time and triple-time pay, to pinpoint departments that are overpaying. Another strategy is to scale back the use of contract employees—traveling nurse services and other temporary workers—who typically command high pay and are expensive to replace.

4. Staffing

Keeping up with industry staffing trends is a requirement for any employer, but healthcare HR professionals must cast an especially wide net. They need to be knowledgeable about global trends such as remote work and answer questions such as: How many employees are working from home? How many are needed onsite? Do we have the right technologies to enable virtual work? And what are the related cybersecurity concerns? But healthcare HR pros also need to think locally: Is our service area declining or increasing in population, and how might that affect staffing levels? Are new competitors snapping up talent and customers—if yes, do we have a plan to respond? As the population of a healthcare provider market ages or becomes younger, or if average incomes and quality of life decline, HR must anticipate and respond to these changes.

5. Fostering Diversity, Inclusion, and Equitable Treatment

The best workplace is one where everybody feels included and is fairly treated. The HR department sets and enforces policies that help make this ideal a reality. Clear guidelines covering hiring practices, pay raises, and career advancement all help build a transparent, equitable culture. And consistent enforcement of these guidelines shows employees that they’ll be protected should someone discriminate against them because of their age, race, ethnicity, gender, sexual orientation, or any other protected characteristic. These same protections must extend to patients too. Most HR teams now require annual training on fostering diversity and inclusion, fighting harassment, and related topics. Without this kind of education, unacceptable behaviors are more likely to occur.

6. Maintaining Patient Satisfaction

It’s HR’s job to define how employees should perform. The challenge for healthcare systems is to ensure that higher performance translates to patient satisfaction. From writing job descriptions to defining the organizational roles of whole departments, HR sets the expectations that drive superior care. HR is also responsible for creating a workplace culture that empowers people to go the extra mile for their patients. Healthcare employers should reward employees who deliver exceptional care and then share their stories across the organization. Such publicity gives employees the credit they deserve and highlights the behaviors that make for satisfied patients.

7. Employee Management

In light of recent staffing gaps and nationwide talent shortages, employee management become a top challenge for HR departments. While HR professionals don’t actually manage nurses and doctors, they do manage all matters related to employees. For instance, HR oversees the process of gathering new-hire data and must do so properly and securely to maintain compliance. HR also manages the employee performance process, making sure employees receive regular feedback so they can improve on the job and advance their careers. Additionally, HR helps shape the organizational structure, which sometimes involves the unpleasant task of laying people off, though in recent years health systems have tended to increase their workforce not reduce it.

8. Discipline and Dispute Management

Disciplinary problems and employee disputes at healthcare organizations can hinder patient care. Employees can’t miss shifts and leave their teams understaffed or carelessly handle patient data and violate their privacy, leaving the hospital or clinic open to lawsuits. When violations occur, or when employees—including highly paid doctors and hard-to-find specialist nurses—disrespect patients or coworkers, HR must respond by disciplining the offenders. However, when employees have disputes with each other or their managers, diplomacy often precedes or supplants punishment. In unusually complex situations, some healthcare providers solicit the help of outside mediators.

9. Ensuring Compliance and Legality

Healthcare HR teams face a big time-management challenge. They must continue to play a crucial role in ensuring legal compliance—in records management, workplace safety, and other areas—while spending more time than ever solving staffing shortages. There’s no simple way to balance these competing duties. Clarifying roles within HR and delegating can help, but it may also be necessary to hire more HR staff, in particular people with proven compliance experience. HR must, as always, maintain a working knowledge of employment and healthcare laws, serving as a guardrail against violations and fines. In the US, these laws include the Health Insurance Portability and Accountability Act, violations of which can result in fines up to $1.5 million per year; the Affordable Care Act; and regulations set by the Occupational Safety and Health Administration (OSHA). HR also needs to review and enforce employment contracts, including those with traveling doctors and nurses, who are being used in greater numbers to plug staffing gaps.

Solving Healthcare’s HR Challenges with Oracle HCM for Healthcare

There’s no shortage of platforms to help HR teams manage their many responsibilities. But HR in healthcare presents unique challenges, requiring applications tailored to the industry.

Oracle Fusion Cloud Human Capital Management (HCM) is a cloud-based application suite that connects every HR process across a health system and serves as a central data source. As a unified platform, it integrates with systems across the enterprise, allowing healthcare organizations to replace older, often unconnected technologies.

With Oracle Cloud HCM, HR teams build, manage, and optimize processes that support a caring culture, one that helps reduce employee turnover. HR finds and hires qualified candidates faster using automated systems and processes. HR manages talent using personalized, role-based learning tools and development plans to create opportunities for clinicians and nonclinicians, enhancing professional knowledge, job performance, and career development. HR improves employee performance and patient care while alleviating burnout by creating flexible staffing plans. HR also motivates workers to stay by using workforce management and communication tools to improve shift scheduling and teamwork throughout the organization.

Find out how you can use the Oracle ME cloud platform to build a workplace culture that attracts, develops, and engages people.

Role of HR in Healthcare FAQs

What is the role of human resources in healthcare?
Healthcare HR professionals wear two hats: They represent their employers’ bottom-line interests while advocating for employees in a grueling profession. The past few years have underscored that motivated people are essential to high-quality patient care and business growth.

How is HR’s role in healthcare changing?
Healthcare HR professionals are expanding their roles beyond recruiting, managing compensation, and other traditional duties. Today, HR works with leadership to shape business strategies, ensure regulatory compliance amid an explosion of patient data, and adopt technologies that improve the employee experience.

What is HR's role in health and safety?
In the US, HR is responsible for ensuring the healthcare workplace is compliant with OSHA rules. During the past few years, HR has also addressed the medical threat of COVID-19 and the accompanying rise in violence against healthcare workers.

See how Oracle Cloud HCM delivers the most complete and unified cloud HCM solution.