Strikes that led to significant gains for unionized health care made headlines last year. Support for unions has reached its highest point in nearly 60 years. With this reinvigoration of the labor movement and a nursing shortage that is expected to worsen, hospital leaders must re-evaluate how to better meet the needs of their own workforce.
Recent union strikes in the U.S. demonstrate the influence unions continue to wield as they aim to improve wages and benefits for members. In the health care sector, calls for unionization are underway as critical nursing groups seek better working conditions.
While health system leaders must continue to find innovative ways to work effectively with unions as activity mounts, their focus should be more expansive. Now is the time to be proactive and ensure that the right compensation strategies, incentives, and rewards are in place for all workers whether they are in a union or not. This two-pronged strategy is essential to meeting the expectations of non-union employees and creating an environment that is equipped to meet future union expectations – all of which can improve employee retention and performance in the long run.
Close the gap
Offering a competitive base pay model is a critical step in reducing the pay gap between union and non-union employees.
Unionized registered nurses (RNs) earn, on average, 6% to 22% higher wages than non-union RNs according to median wage data for 2021 to 2023. At the same time, union wages are slowing after peaking in 2022, while non-union wages have spiked in the last two years.
There are a few factors are driving this increase in non-union wages. First, health care organizations increasingly recognize the need to increase wages for non-union nurses to compete against union members and the broader market. But they’re also trying to mitigate growing turnover rates and higher labor costs associated with using contingent nurses.
Assessing the gap between union and non-union employees is a crucial step at this moment. Even more important is defining how to reduce the pay gap over time and how to articulate other essential benefits that offer value to non-union workers as pay changes evolve.
In recent years, many frontline nurses have consistently ranked flexibility, meaningful work, and balance as the top factors impacting their decision to continue working in a direct patient care role.
So, while base pay is essential, leaders should consider adopting a mix of strategic and operational measures to create a more holistic and balanced approach to meeting their workforce’s needs.
Short- to mid-term measures
Another immediate step health care leaders can take to create equity across union and non-union workers is to reassess compensation philosophies.
Organizations should aim to target market benchmark compensation rates higher than the 50th percentile. This is particularly important for RNs. SullivanCotter’s recent Nursing Compensation Pulse Survey found that more than 65% of participating organizations target pay positioning for RNs at the 60th percentile or higher.
To help retain RNs, health systems and hospitals should accelerate the progression to the mid-point of pay for early-in-career RNs by introducing specialty pay or pay that recognizes skillset requirements. Many organizations are already taking this approach. A health care staff survey conducted by SullivanCotter last year found that nearly 4 in 10 organizations vary RN pay by setting.
Meanwhile, powerful brands like Walmart, Google and Amazon are venturing into health care and have altered workforce dynamics. As a result, traditional health care organizations must consider raising the minimum or starting wages for entry-level positions to compete with these industry disruptors for talent. Managers should also evaluate additional benefits – like on-site childcare, elder care leave, and additional PTO or sabbaticals – that can help alleviate workforce burnout.
Looking beyond pay and benefits, health care organizations can benefit from creating a formal career-progression framework to support employee growth and development. Such a framework should define what progression looks like and provide both upward and lateral career mobility. This can help address employees’ desire for meaningful work and simultaneously strengthen recruitment and retention.
Long-term measures
Over the long term, health care organizations should embrace a more holistic total-rewards strategy as they navigate financial constraints with lower profit margins and higher fixed labor costs.
A total rewards strategy addresses not only financial elements like compensation, but also non-financial rewards like career prospects, wellness, and work-life balance. Such rewards are becoming more important as organizations try to meet the needs of a more diverse and multi-generational workforce.
Some of the most common total-rewards elements that health systems have implemented include:
- Remote/hybrid work opportunities (98%)
- Increased/added referral bonus (83%)
- Adjust new-hire compensation (77%)
- Sign-on bonuses or relocation awards (77%)
- Special retention awards (63%)
- Increased minimum wage (62%)
- Training to increase internal promotions (61%)
Another way to retain staff is by implementing workforce development strategies. Whether it’s providing coaching and mentoring programs, deconstructing certification roles, or creating opportunities to participate in workplace committees, these strategies can help organizations better engage RNs and create more meaningful work for them.
Leaders should also assess current care delivery models to introduce more flexibility into work schedules and staffing processes. For example, introduce short-term employment, remote work, or weekender program options. Leverage nursing support roles like licensed practical nurses and patient care technicians to ease the burden on RNs or use chaplains and patient advocates to help nurses improve family well-being. Some leaders have found that creating an in-house staffing agency to deploy staff nurses on travel assignmentshas been effective.
Engaging with unions
The time is now for health care leaders to create a contemporary strategy that works for their organization and union and non-union employees alike. As leaders engage their unionized workforce, creating collaborative and agile partnerships that can adapt to meet market challenges is an imperative. Concurrently, it’s important not to put non-union workers on the back burner. Organizations need both workforce segments, and meeting the needs of each has the potential to diffuse friction, improve employee satisfaction and morale and maintain the delivery of high-quality health care.
Cathy Loose
Cathy Loose is Managing Principal for SullivanCotter.
