Is Your Healthcare Organization Prepared for the Labor Shortage Storm?

As an industry, there is a commitment we make to our communities to deliver healthcare. We’re actually saving lives, helping people, and welcoming new members to people’s families. We’re treating emergencies, whether natural disasters or day-to-day bad stuff. So as an industry, we can’t afford from a moral perspective to fail.

Hospitals and health systems across the country are facing an existential threat among unprecedented vacancy rates, labor costs, and severe shortages across critical roles. And it’s not going away anytime soon—Lightcast data projects there will be approximately 800,000 unfilled roles over the next five years.

These aren’t just HR issues, nor are they cyclical problems that can be addressed as they once were. Workforce gaps are reshaping financial performance, patient care, and operational continuity. It’s been a perfect storm decades in the making, and systemic challenges have collided into a crisis that are being felt across organizations:

• Soaring labor costs: Contract nurse wages more than doubled between 2019 and 2022, driving up per-patient labor expenses by 25%. In 2022, over half of U.S. hospitals finished the year with negative margins.

• Rising competition for talent: 41% of nursing students are now considering leaving the profession before they even begin, and wage wars are heating up across hospitals, telehealth providers, and staffing agencies.

• Worsening patient outcomes: A nurse stretched too thin leads to errors, complications, and longer wait times. Every unfilled role carries human consequences.

In the Lightcast Workforce Risk Outlook, our researchers found a 22% decline in prime-age (25-54) registered nurses:

Systemic problems like this require systemic solutions. There simply isn’t the talent pool to fill roles as they open up—it requires a concerted, proactive approach across the organization with strategic investment in programs that results in the talent retention operations depend on. Whether it’s internal nursing academies, opening new career pathways across adjacent roles, flexibility programs, AI solutions, or simply changing the layout and workflow of a hospital, organizational leadership in all functions will need to look to workforce planning as the lifeline for business continuity.

As Josh Bersin, Founder and CEO of the Josh Bersin Company, said in a recent webinar hosted by Lightcast, “Those of us in HR have to operate strategically. One of the problems we identified just a month ago was that 77% of people in Talent Acquisition are not involved in any strategic planning discussions whatsoever … This is a wakeup call for HR, that we have to get our story together and go to the C-suite and line leaders and explain that we have to change the way we operate to deal with this drought of demographics and skills.”

Our new E-book, Navigating the Healthcare Workforce Crisis: An Organization’s Survival Guide, delivers a data-backed roadmap for doing just that. The key strategies we outline to raise the conversation from siloed, HR issues to a larger organization-wide initiative start with:

• First, gathering operational and financial challenges straight from the COO and CFO—they are the ones feeling the greatest impact, and HR professionals can serve as consultants to connect how workforce planning is at the forefront of solving these challenges.

• Taking an outside-in approach by first mapping the internal organization (where there are shortages, turnover risks, and potential retirement surges) and comparing these insights to the external market (unemployment rates, career pathways, or graduation pipeline).

• Then developing an actionable framework based on Build, Buy, Borrow, and Bot strategies: investing in internal talent, recruiting proactively, creating a flexible staffing strategy, and using AI and automation to relieve capacity pressures.

While you can’t control demographic shifts, you can take steps to prepare a future-ready workforce that can withstand the labor market storm and turn it into a leadership opportunity. Our roadmap helps HR leaders and practitioners make the workforce planning business case with insights on:

• The Workforce Risk Outlook on healthcare and what leaders need to know about how work ultimately gets done

• Strategies to grow talent pipelines in constrained markets

• Guidance on where AI works, and where it doesn’t

• Bringing together HR, finance, and operations with data.

The next five years will define the future of your healthcare organization. Make sure you’re prepared with the insights you need to protect your staff, your patients, and your bottom line.