Healthcare's Bifurcated Employment Issues

March 15, 2023 • John Salustri

Hiring in the post–pandemic jobs market has been a challenge, not just for commercial real estate, but virtually for all industries. For the record, the current unemployment numbers (as of February 10) rest at 3.6%.

Why it’s been so tough is a complex question to answer, and no, it’s not just because certain employers don’t offer hybrid choices. The U.S. Chamber of Commerce cites reasons ranging from early retirement to the need to take care of ailing family members. 

“Overall, in 2022,” states the US CofC, “employers ended up adding an unprecedented 4.5 million jobs. But at the same time, millions of Americans have been leaving the labor force since before the pandemic. In fact, we have nearly three million fewer Americans participating in the labor force today compared to February of 2020.”

How the employment issue has impacted the healthcare industry in particular was the focus of a recent Cushman & Wakefield report, which states that there’s been a net loss of 250,000 healthcare workers. 

“Healthcare employment is out of balance,” says Eric Johnson, Transwestern’s Houston-based executive managing director of Healthcare Advisory Services. “We just came out of a pandemic, so there’s a lot of burnout and fatigue.” 

He adds that hospital systems are facing two issues that don’t typically coincide: “They either face a staffing shortage or a profit loss. Now, many institutions are experiencing both.” This is particularly true of rural systems, which tend to face larger fiscal challenges. “And the first remedy for them is to cut staff.”

But this attrition needs nuancing. “I’d bet that more than 70% of those that leave are nurses,” says Amy Hall, senior VP of Leasing and Physician Strategy for Physicians Realty Trust in Louisville, KY. “We’re seeing the shortage, but from afar.” 

That’s because the bulk of the Physicians Realty portfolio lies today in medical office facilities. The shortage, she explains, is occurring primarily with physicians and nurses–especially nurses–doing hospital-based shift work. She says she’s seen first-hand administrative nurses doing double duty, “running the check-in desk, checking vitals and administering medications– after a 16-hour work shift.”

The pinch is much less pronounced in the medical office environment, she adds, since they generally offer day hours and shorter shifts. Not surprisingly then, while it’s not a one-to-one ratio, “There’s been a migration from hospitals to medical office buildings.”

A Partial Cure

Question: How is hiring in healthcare like recruiting in the office sector? Answer: Both food groups rely at least in part on the amenities they offer. 

“Many healthcare organizations are making facility improvements—such as respite rooms, outdoor space and enhanced security—to maintain and recruit staff,” says Cushman & Wakefield. The report also references “Code Lavender,” a program that began in the 1980s and designed to lend support to overstressed and exhausted medical staff.

“There was a big push three or four years ago to get rid of break rooms,” says Hall. “They wanted doctors seeing patients. Now they have to have a break room. It’s one of many things hospitals are doing.” On-site workout spaces are another amenity gaining ground, she adds. 

Johnson agrees, comparing healthcare’s rise in wellness protocols and designs with that of the tech sector and those taking place in the office market. “In the tech sector, there was a new economic model, a new vision that was employee-centric, creating a culture for people who work really hard for long hours, people who need rest and a refuge from their jobs.”

Ditto the office market, where corporate tenants are amping up their long-growing employee-centric design mindset. “We have to rise to new challenges,” he says, “and adopt new technologies to help us address these issues.”  He cites the growing trend of telehealth as just one example of those new technologies. “In 2022, the three biggest hiring organizations in the mental health field were telehealth companies.” 

Adaptation has been a post-pandemic watchword for the office market, especially as owners, managers and their tenants strategize toward greater occupancies. But obviously, even in a market sector known for its never-ending necessity, such as healthcare, adaptation is still a necessity. 

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