12 Key Healthcare HR Challenges to Fix in 2023

Mark Jackley | Content Strategist | March 17, 2023

Healthcare providers face daunting human resources challenges. Even before the COVID-19 pandemic overwhelmed the sector, hospitals, clinics, medical practices, and other providers struggled with doctor and nurse shortages, declining employee retention rates, employee burnout, and steadily rising labor costs. If not fixed, these challenges can put patients’ health and even lives at risk, as well as the emotional well-being of employees and the fiscal integrity of healthcare systems.

While the list of industry HR challenges is long, the solutions are interrelated—improvement in one area can lead to improvement in another. For example, better training can help healthcare providers retain employees, enhance workplace safety, and comply with privacy laws.

Here we discuss the dozen key HR challenges healthcare providers face today, as well as strategies and best practices to overcome them.

What Does HR Do in Healthcare?

In the healthcare industry—as in many other sectors—HR teams are responsible for more than hiring staff and managing benefits. Healthcare HR teams also manage training and development programs. They help enforce safety measures that protect patients and employees. They play a key role in safeguarding the privacy of patient and employee records. They help develop compensation plans that go beyond pay and benefits. They help create employee-scheduling policies to guard against burnout. And they contribute to policies and programs that improve patient satisfaction.

Key Takeaways

  • The #1 healthcare HR challenge is attracting and retaining staff in a competitive labor market defined by a massive talent shortage.
  • Staffing shortages not only cause employee burnout and turnover, but they also hinder healthcare provider efforts to improve patient satisfaction, regulatory compliance, and patient and employee safety.
  • HR teams must get creative to balance employee needs—everything from better pay and benefits to scheduling flexibility and access to new technologies—with the need to curb rising labor costs.

12 Healthcare HR Challenges

The thorniest challenges facing healthcare HR professionals are, unsurprisingly, related to human beings. Hiring, retaining, and developing staff are challenges in themselves, and progress in any of these areas will help overcome broader challenges such as improving patient outcomes and complying with data regulations.

1. Staffing

In a 2021 report, the Association of American Medical Colleges revealed that the US could face a shortage of 124,000 physicians by 2034. The report projected a shortage of nearly 50,000 primary care doctors and up to 77,000 specialists.

Technology can help HR teams manage staffing. Cloud-based human capital management (HCM) systems give healthcare providers a real-time view of current and future staffing needs, while cloud enterprise resource planning systems help them plan budgets to maintain or boost staffing levels. Technology can also improve HR service delivery—for example, by enabling job candidates to apply for open positions on their mobile devices, which accelerates the process of vetting applicants, scheduling interviews, and making offers ahead of competitors in a hot market.

2. Burnout

Mayo Clinic defines burnout as a form of work-related stress—“a state of physical or emotional exhaustion that also involves a sense of reduced accomplishment and loss of personal identity.” In an American Medical Association survey, half of all respondents, including 56% of nurses, reported having at least one symptom of burnout. One-third reported high levels of anxiety or depression, and 25% of the physicians surveyed said they planned to leave their practice within two years.

To reduce burnout, healthcare industry HR teams need to build employee health and well-being into their organization’s core values. To translate these values into action, HR should also embrace data analytics to improve planning, staffing, and scheduling by answering questions such as: How many resources and beds were consumed in the past three months? How likely are patients to return to the hospital or overstay their admission? And how can we avoid a shortage of resources during peak flu season? Analytics can also help HR teams pinpoint factors causing employees to stay or leave. Beyond analytics, digital technologies help employees stay connected and can alleviate stress by making it easier and more efficient to handle routine tasks—including checking schedules, accessing personal records, and taking job satisfaction surveys—anytime, anywhere, on any device.

3. Employee retention

Staffing shortages and employee burnout negatively impact retention. In the United States, the average hospital employee turnover rate in 2021 was 25.9%, a 6.4 percentage point increase over the prior year, according to healthcare staffing firm NSI. Over the last five years, the average hospital turned over 100% of its staff.

Voluntary terminations accounted for 95.5% of all hospital separations in 2021. Unlike industries where production lines can be shuttered or a percentage of orders declined, healthcare needs to fill shifts to maintain patient care. If staffing shortages lead to mandatory overtime, workers walk, going to employers with better working conditions or choosing temporary unemployment or even early retirement. Young physicians are leaving their jobs twice as fast as older doctors, and nearly one-third of newly hired nurses leave within a year, according to the NSI study.

To improve retention, HR teams must go beyond improving pay and scheduling. Some healthcare organizations are trying to create a more inviting culture, including relaxing their dress code. Calvert Health System, a hospital in Maryland, launched a program that uses a software algorithm to help identify and fix workplace problems. The program lets employees anonymously report issues such as rule breaking, medical errors, and personnel conflicts, providing a trove of information that helps HR solve problems before they hurt retention.

4. Scheduling and management

When healthcare employees are overscheduled or feel they have no say in their schedules, the result is often burnout, subpar patient care, and high turnover. By helping teams across the company better manage schedules, HR can also help retain talent.

Traditionally, healthcare companies used spreadsheets to manage staff schedules—a tedious manual process. Today, healthcare scheduling software facilitates the process, saving time and improving the employee experience. Employees receive automatic scheduling notifications, including messages about schedule changes, on their mobile devices. The best software makes it easy for employees to request time off or trade shifts with a coworker. Managers can create daily or weekly schedules in minutes. Scheduling analytics can show managers when a staff member is overworked—for example, by identifying team members who consistently miss breaks or work past normal hours—and provide insights that can help organizations enhance overall working conditions.

5. Improving patient satisfaction

Patient satisfaction is an HR issue because it’s closely tied to employee performance. If doctors are chronically late for appointments, nurses treat patients inconsiderately, or front-desk staff aren’t helpful in making appointments or answering questions, patient satisfaction suffers. A National Institutes of Health study showed that 39% of people avoided going to a doctor because of previous bad experiences.

Through surveys, small group meetings, or feedback features built into their HCM systems, HR needs to identify the top problems affecting employee performance, whether they include overscheduling, low pay, outdated technology, or other factors. By fixing what’s hindering employee satisfaction, HR can help boost patient satisfaction.

6. Maintaining records compliance

HR is responsible for defining policies and procedures to maintain compliance with regulations governing patient data. Under the Healthcare Insurance Portability and Accountability Act, the US healthcare industry must meet strict standards for patient data collection, records storage, access to records, and more. Failure to do so can lead to fines of up to $1.5 million per year.

HR must help by creating a culture of compliance, working closely with the organization’s IT and legal teams to safeguard medical records. With HR’s assistance, a healthcare organization can decide who should have access to sensitive information, what happens when an employee violates a policy, and where policies and procedures will be kept and updated as needed. By establishing smart approaches to regulatory compliance, including training for all employees, HR helps protect the organization against financial penalties and lawsuits and eases the overall administrative burden.

7. Training and development

A comprehensive training and development program has wide-ranging benefits, including higher staff retention, improved legal compliance, and better patient care. But according to the Association for Talent Development, on average, healthcare workers spend 34% less time on training per year than workers in other industries due to the nature of shift work and the sheer variety of positions, skills, and certifications.

Given the severity of staffing shortages and employee burnout, healthcare organizations need to invest in all kinds of training and development. Security and regulatory compliance training benefits all employees. Specialized training for nurses and admins improves patient care and the employee experience. Well-defined development plans put employees on achievable career paths. It’s especially important that employees in hospitals and other 24/7 workplaces have access to functional training tools, whenever and wherever they need them. Technology can play an important role here, from making training and development accessible from any device to providing an online tracking system that sends automatic alerts when training deadlines approach.

8. Patient and employee safety

In most cases, the causes of poor patient safety are unintentional, the result of insufficient employee training or failure to follow procedures. By addressing some of the other key healthcare challenges—staffing shortages, burnout, overscheduling, and inadequate training—HR can also help improve patient safety and well-being.

Employee safety is threatened by the inherent risks of the job. According to the U.S. Bureau of Labor Statistics, healthcare workers face a high risk of on-the-job injuries such as cuts from sharp objects, chemical and drug exposure, and back injuries, with more than 600,000 workers injured each year. The continued threat of COVID-19 and other infectious diseases raises the stakes considerably. Moreover, the risk of workplace assaults against healthcare workers is four times higher than for employees in other industries, the US Occupational Safety and Health Administration (OSHA) reports. Besides physical safety, emotional well-being is a challenge. One survey showed that one in four healthcare employees have experienced or witnessed unsafe levels of emotional distress in the workplace.

There’s no magic solution. HR is responsible for training new hires on safety standards set by OSHA and their own organization and making sure that managers create a safe working environment. HR should review and update safety policies and procedures regularly and work with facilities management to audit potential workplace hazards.

9. Competitive compensation

HR managers encounter many obstacles in their search for top doctors, nurses, and administrative staff. Medical professionals often sign noncompete agreements that require a long notice period before they can take a new job. If your healthcare facility is located in a remote area, the staff you need the most—specialist doctors and nurses—may not be interested in moving there.

For these reasons and more, it’s crucial to offer an attractive pay and benefits package, benchmarked against those offered by direct competitors. In addition to at least matching the pay competitors offer, healthcare employers must also offer standard benefits such as health insurance, including dental and vision, and a 401(k) or other retirement savings plan. But those are just the essentials. Depending on the positions they’re looking to fill, healthcare HR teams should think about expanding benefits to include paid childcare, mental health programs, gym memberships, student loan repayment assistance, and commuter benefits, such as defraying the cost of public transportation.

10. Enhancing the employer’s brand

It’s easier than ever for job seekers to research employers thanks to Glassdoor and other online sources, presenting both a challenge and an opportunity for healthcare providers. To persuade the best talent to consider joining their organization, healthcare HR teams must work with marketing to create a compelling employer brand.

Experts caution that good branding is honest branding. What’s it really like working at your organization? What do people love about it, and what’s the organization doing to make ongoing improvements? A tip: Let employees tell your story—their story, actually—describing not only what they do but how it feels to come to work. If your work environment is fast paced, make that a part of the story to attract candidates who thrive on excitement. If you’ve managed to retain employees at higher-than-average rates, be sure to communicate why people stay, whether it’s because of stability, caring management, challenging work, close bonds with fellow employees, or another factor.

11. Labor and payroll costs

Rising labor costs add to the financial challenges facing US health systems. A report by Kaufman Hall (PDF) reveals that industry labor costs have increased by more than a third since the onset of COVID-19. Contract labor is one big reason, now accounting for 11% of total labor costs across health systems. Median hourly wages for contract nurses have risen dramatically, up 106% from 2019 to 2022.

There are a number of ways in which healthcare employers can reduce labor and payroll costs while still offering competitive compensation. Analyze overtime and premium pay, such as double-time and triple-time pay, to identify departments that routinely pay extra. Review your management structure and cut positions where possible. This will not only save money but also show frontline employees that management isn’t exempt from cost-cutting measures. Perhaps most important, where possible decrease your reliance on contract employees—traveling nurse services and other temporary workers—who typically fetch a market premium and are expensive to replace.

12. Staying current on the latest technologies

Technology is transforming healthcare as much as any other industry. Doctors and nurse practitioners now see patients remotely, especially the aged and those who are highly contagious, saving time and improving safety. Medical records have long been digitized, and clinical staff can gather data, sometimes in real time, from patients’ wearable or embedded devices.

However, as medical technology has continued to advance, many clinical workers haven’t kept up as certain systems come with a steep learning curve. HR teams need to provide mandatory training on new medical systems and make it easy for shift workers to find the time to complete courses. Hiring tech-savvy employees is a good idea, though in a tight labor market, employers can’t always be choosy.

Oracle Healthcare HCM: The Prescription for Your HR Challenges

Healthcare HR teams need powerful technologies to tackle their long list of challenges—not a confusing jumble of unconnected systems.

Oracle Fusion Cloud Human Capital Management (HCM) enables healthcare providers to plan, create, manage, and optimize HR processes that support a caring culture—one that helps prevent employee burnout and reduce turnover. A complete solution that connects every HR process across a health system, it delivers one common data source to help HR teams make better decisions and stay ahead of evolving workforce needs.

Improve growth opportunities for both clinicians and nonclinicians and make it easy for employees to learn new skills with personalized, role-based learning and intuitive performance management and career development tools—all in one place. Create staffing plans that improve both performance and patient care while alleviating burnout. Improve self-service by letting employees access HR systems, including their own records, at work or at home via mobile devices. Use automation to hire faster and land the best candidates, and rely on online communication tools to capture employee feedback and build a connected, collaborative environment that encourages employees to stay.

Key Healthcare HR Challenges FAQs

What does HR do in healthcare?
Healthcare HR organizations go well beyond managing hiring, onboarding, payroll, and other traditional duties. They also help people succeed as great clinicians, businesspeople, or colleagues. In today’s tight healthcare industry labor market, HR plays a crucial role in reducing burnout and staff turnover by driving improved scheduling, comprehensive employee training, and competitive compensation.

Which of the primary HR activities is most challenging in healthcare?
The biggest HR challenge in healthcare is to attract and retain talented people—in particular, specialist doctors and nurses—amid the ongoing industry talent shortage.

What are the main goals of HR in healthcare?
Among the many goals of healthcare HR professionals are finding and keeping the right talent, listening to and advocating for employees in stressful jobs, maintaining compliance with privacy laws and other regulations, and ensuring that employees in all positions get the training they need to excel in their work and advance in their careers.

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