Is Now the Time for a Breakout Quarter in Healthcare Hiring?

One week, I'm fretting over hospital layoffs. The next week, I'm writing about the growth in healthcare sector jobs.

Forgive me for being all over the map. I'm aiming for consistency, but healthcare is such a huge, all-encompassing sector—with about 13 million professionals caring for more than 300 million Americans. It's difficult to differentiate between industry-wide trends and local events that don't travel beyond the walls of a particular hospital.

There's a new tool out there that I think might help us read what is going on in the healthcare labor market. Health Workforce Solutions LLC, the San Francisco-based healthcare research and consulting company, has developed a Labor Market Pulse Index—a quarterly barometer of local market healthcare workforce fluctuations in 30 markets across the country.

David Cherner, managing partner of HWS, says LMPl tracks things such as temporary health workforce shortages and surpluses, facility and bed closures, announced layoffs and expansions, and local economic trends. So, what did the LMPI show us for the first quarter of 2010? Not surprisingly, it's a mixed bag:

• The near-term demand for healthcare workers grew the fastest in the San Francisco Bay, Seattle, Tampa, and Philadelphia metro areas.
• Much of the growth was fueled by newly announced expansion plans and/or large-scale hiring announcements at organizations including Genentech in South San Francisco, Swedish Hospital Group in Seattle, and Jefferson Health System in Philadelphia.
• Of the 30 major markets tracked by the HWS Labor Market Pulse Index, the slowest areas for the quarter included the New York/Northern New Jersey, Sacramento, and the St. Louis metro areas.
• The LMPI composite index, a representative basket of the 30 largest markets, posted an 8% drop in the first quarter of 2010 from the fourth quarter of 2009, after a nearly 20% increase the previous quarter.
• For the fourth quarter ending Dec. 31, 11 markets of the 30 tracked by the LMPI showed signs of accelerated expansion (vs. 21 in the prior quarter).

"It can really vary from market to market," Cherner says. "Obviously a lot of this is determined by the size of the market. A layoff that might not seem big in a larger market can impact the near-term demand for healthcare workers in a smaller market much more notably."

"There are certain layoffs that are still occurring in certain markets, but at the same time we continue to see a lot of projects that were put on hold being put back," Cherner says. "As we talk to a number of different VPs of HR, CNOs, and other workforce planning people at large systems, we are also anecdotally noticing that folks are getting back to doing long-term workforce planning."

Two big reasons for the longer-term view: first, despite continued rough times for millions of Americans, it appears that the economy is in recovery, and second, the enactment of healthcare reform has ended more than one year of speculation.

"Now that there is more clarity around healthcare reform, we know what is happening, and how different constituencies are going to react and collaborate. Folks will refocus," Cherner says. "There has been a lot of flux and a lot of reactionary behavior over the last year on a quarter by quarter basis because nobody knew what was going to happen."

"My guess is we will see a lot more action this coming quarter and hopefully it will be positive. The larger elephant in the room is the general economy and who knows what impact that will have," he says.

What about all those "mass layoffs" affecting 50 or more hospital employees that we've been seeing in the first quarter?

"I think people have cut as much as they possibly can, and I can't imagine us continuing to see large-scale layoffs without hospitals closing their doors," Cherner says. "Hopefully, the volumes will pick up and there will be more cash flow and we know that the hiring environment is improving. It's still going to be a difficult year for new grads, but we are hearing anecdotally, from folks that they are planning to hire more new grads this year than they did last year, which is very positive."

Here's my take: I believe the healthcare sector is reacting like every other sector, and every other person. Everybody is waiting to see if the economic recovery is for real, or if there is a double-dip recession lurking out there. We are seeing the same thing with individuals and the housing market. Interest rates are low, there are plenty of houses available going at 20th Century prices. But nobody's buying. That's because we still don't know if housing prices will continue to drop.

We will see a continued upswing in healthcare sector hiring, maybe even a very strong uptick during the current quarter. Yes, there is a lot of anxiety out there, and deservedly so. But the demand for healthcare workers is real, and won't go away—no matter the shape of the economy. Our nation's aging demographics don't lie.

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