I’ve come across comments on various nursing websites highlighting difficulties for new grads finding jobs and thought some economic perspective might be helpful.
First, the demand for RN’s will continue to grow at an average 2.2% per year, with supply of RN’s short of demand through 2018. Given that the mean age of all nurses is in the low 50′s, while baby-boomers are just now hitting the retirement age at the rate of 10,000 people per day, the gap between RN’s willing to work and the demand for their services will continue to diverge, i.e. stay healthy, you may be on your own. For certain, how RN’s are treated today can dictate how profitable institutions will be five years from now.
What you may not know is that nursing is part of what Jacob Mincer, Labor Economist of the 1950′s identified as part of the “secondary labor force”. This labor force, according to Mincer, tends to provide secondary income to the household where there is another income producer providing the largest income. Nursing, being part of the secondary labor force, tends to run countercyclical to the general economy. When things are good, the secondary labor force is relatively quiet, nurses work less hours or perhaps not at all, while asserting muted demands for attracting their highest marginal wage. When the economy slows down resulting in lay-off’s of primary income producers, the secondary labor market becomes more robust. People return to the labor force, work longer hours, and begin seeking higher wages.
This latter response to a downturn in the economy can produce an illusion that shortages have gone away, when it certainly has not, that is, it’s a head fake. A second wave problem happens when employers of nursing services fail to recognize the fragility of their current situation. This secondary labor force can quickly return to lower participation rates as soon as household income needs are met, and do so much faster than any hospital can possibly hope to manage. The second wave effect includes students who also misread the market and choosing not to pursue nursing fearing an absence of work when they are finished. Times like these present a tremendous opportunity for hospitals and healthcare organizations, or can set them up for future disasters if they handle these times poorly.
This is a time for healthcare organizations to be as accommodating and supportive as they can be in attracting new and experienced talent. Hospitals can gain a ton of good will, as well as an exceptionally deep and loyal bench of RN talent for the future, if they take advantage of these times and build solid relationships with returning RN’s as well as warmly embracing new grads. Failure to engage nurses now will result in profound shortages and an explosion of expense in the future, and there is absolutely nothing a hospital will be able to do to reverse the damage.
Questions?
Tom
