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As compensation competition continues, medical group leaders say staff turnover not easing up yet

MGMA Stat - February 3, 2022

Recruitment & Hiring

Compensation & Benefits

Culture & Engagement

Human Resources

MGMA Staff Members
While burnout and the COVID-19 pandemic’s impacts prompted many healthcare workers to quit their jobs in 2021, staff exits from medical groups last year were driven by rising levels of compensation inside the industry and beyond.


A Feb. 2, 2022, MGMA Stat poll found that better pay and benefits at another organization was the top cause (59%) of medical practice staff turnover in 2021, followed by burnout (21%), “other” (13%) and “retired/left workforce” (7%). Among the top “other” reasons:
  • Staff leaving temporarily to care for family members
  • Desire for remote job opportunities instead of in-person work
  • Relocation because of a spouse/partner’s job change amid the Great Resignation.
The poll had 823 applicable responses.

The impacts of the tight labor market are still being felt intensely by group practice leaders who responded to the poll, as most (41%) said staff turnover rates worsened in the past quarter, compared to 33% who noted it stayed about the same as previous quarters, and 26% who said turnover slowed recently.

Seasonally adjusted data on quits levels from the U.S. Bureau of Labor Statistics (BLS) show sustained levels of quits in the healthcare and social assistance industry in the past five months, ranging from as low as 503,000 quits in December 2021 to a peak of 592,000 quits in November 2021, all of which are well above the quits level of 419,000 recorded a year earlier in December 2020.

Estimates from late 2021 suggest the U.S. healthcare sector saw 18% of all staff quit a job since the pandemic started in early 2020, and that almost one-third (31%) of remaining workers have thought about leaving their employer, according to Morning Consult.

This ongoing exodus of healthcare workers adds strain to an industry that is still working to address the surge of COVID-19 cases caused by the spread of the Omicron variant, which created a perfect storm of patient demand spikes and worker shortages during the winter holidays.

Compensation and benefit competition remains intense

Provider and staff compensation historically have been the biggest expense in a medical group’s budget, and its upward trend has continued in recent months:
  • Half of medical practices (50%) budgeted more than usual for workers’ cost-of-living (COL) increases for 2022, per a Dec. 14, 2021, MGMA Stat poll, with an average COL increase of 5%.
  • Recent U.S. Department of Labor (DOL) Employment Cost Index reports found compensation costs for private industry workers rose 4.4% for 2021, with wages and salaries up 5% for the same period.
A recent report in Fortune highlights that worker pay was already trending upward prior to the pandemic, and that the struggle to hire enough workers continues to put pressure on employers to make their compensation packages more attractive in a highly competitive labor market. While inflation has been a widely discussed topic in the news, some economists still believe that the rising labor costs have not been driving increases in inflation as much as other factors, such as supply chain disruption and COVID-19-related worker absences that restrict productivity.

Burnout

The stories of the COVID-19 pandemic in 2020 and 2021 for medical practices are stark contrasts: While early months of the pandemic in 2020 saw patient volumes plummet, the recovery of that volume in 2021 was significant: About 7 in 10 medical practices reported their productivity met or exceeded expectations for the year in a Nov. 16, 2021, MGMA Stat poll.

But such strong productivity — despite ongoing vaccine hesitancy and the summer 2021 Delta variant spike — was achieved with fewer and fewer workers because of those who left their jobs in the past two years due to pandemic-related burnout.

Regardless of the source of the burnout, the impacts on the workforce result in fewer providers available: A December 2021 report in the Mayo Clinic Proceedings found that COVID-19-related stress — tied to fear of coronavirus exposure, higher workloads and anxiety or depression — has made clinical team members rethink their work-life balance and career plans:
  • About one in three physicians, advanced practice providers (APPs) and nurses intend to reduce work hours.
  • One in five physicians and about two in five nurses intend to leave their practice.  

Retirement and leaving the workforce

While the smallest segment of respondents to the poll, this segment was the only group in the poll to report a majority (50%) of practices seeing the pace of staff turnover slow in the past quarter, compared to those whose turnover rates stayed the same (32%) and those who saw it worsen (18%).

Some practice leaders also expressed that without careful tracking of turnover rates, it is possible to lose a sense for it as more staff shift to remote or hybrid roles. “You don’t see anyone anymore,” one practice leader told MGMA, underscoring the need for close monitoring of staff departures, especially as some workers continue to retire early due to the continuing COVID-19 pandemic.

JOIN MGMA STAT

Our ability at MGMA to provide great resources, education and advocacy depends on a strong feedback loop with healthcare leaders. To be part of this effort, sign up for MGMA Stat — by texting “STAT” to 33550 or visiting mgma.com/stat — and make your voice heard in our weekly polls. Polls will be sent to your phone via text message.

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