Philly-area hospitals are paying nurses big bonuses to stave off shortage

Times are good for nurses willing to jump to a different hospital. Because of a tight labor market, hospitals are offering big signing bonuses for experienced nurses — as high as $20,000.

“Nursing recruitment and retention has come up as a major, major pain point in the last few months,” said Lauren Rewers, a researcher at the health-care research firm Advisory Board who said that bonuses have reached unusually high levels.

Beyond signing bonuses, Philadelphia-area hospitals are paying bonuses on top of overtime for nurses who pick up extra shifts, raising hourly wages for junior nurses seen as more easily enticed by a signing bonus at another hospital, and even paying retention bonuses to nurses in key positions.

“The pay is great. It’s perfect. It’s what nurses deserve right now. If you want enough nurses at the bedside, you’re going to have to pay because nurses are tired and burned out,” said Debbie White, a registered nurse and president of the Health Professionals & Allied Employees, a labor union in New Jersey with 14,000 members at 27 facilities.

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The pandemic has taken a tremendous physical and psychological toll on nurses at hospitals that cared for heavy loads of COVID-19 patients, leading nationally to supply constraints because of leaves of absence, fatigue, rising patient volumes, and operating room backlogs, Susan R. Salka, chief executive of Dallas-based AMN Healthcare Services Inc, the nation’s largest medical staffing firm, told investors on Aug. 4.

“Our clients are telling us that this is unlikely to change anytime soon,” Salka said.

As employers, hospitals have plenty of company in their scramble for workers. A federal report on Aug. 9 showed more job openings in the United States than unemployed people looking for a job. That dynamic has contributed to widespread wage gains throughout the economy. This month, a steady stream of hospitals has adopted a $15-an-hour minimum wage, including Penn Medicine at Lancaster General Hospital.

Average hourly pay for all registered nurses in May 2020 in the Philadelphia region — which has the heaviest concentration of nurses among the nation’s 10 largest metro areas — was $38.45 an hour, according to the most recent federal data. It’s likely that the average for hospital nurses is higher, given that several area systems have a starting wage of $35 an hour.

How tight the market for nurses will get is anyone’s guess. Some health-care executives fear that another severe nurse shortage — such as those seen in the mid-1980s and again starting in 2000 — is developing, in part because of the retirement of baby boomers, coupled with that generation’s rising health-care needs.

The remainder of this year could be a key period for hospitals to come up with ways to attract and keep nurses, said Todd Nelson, an expert at the Healthcare Financial Management Association, an industry trade group.

“People are going to innovate and do things differently and creatively. It won’t just be bonus structures. It may be bonus and/or time off. It may be offering different educational incentives,” he said.

At Main Line Health, which employs 1,900 bedside nurses, up from 1,700 in 2019, the problem is not attracting nurses right out of school, said chief nursing officer Barbara Wadsworth.

“What we’re seeing is more retirements, and we’re also seeing challenges with specialties, so things like labor and delivery, emergency department, surgical services, operating room nurses, and maybe a little bit of ICU,” she said.

To keep and attract nurses, Main Line has spent $8.5 million on pay raises in the last 18 months, including $1 million this month, Wadsworth said. The push to raise pay for nurses started in 2019, after executives noticed that nurses with up to five years of experience were leaving. The nonprofit system gave new nurses raises of up to 9%. Seven out of 10 nurses got raises. Main Line also raised nurses’ starting rates significantly, though Wadsworth declined to disclose the increase.

Children’s Hospital of Philadelphia recently boosted hourly rates for 2,432 of its 2,782 nurses, nearly 90%, a spokesperson said. Anyone who didn’t get a raise received a bonus instead. One veteran, who did not get a raise, said the bonus was $1,000.

At Tower Health’s Pottstown Hospital, nurses earning $30.32 to $33.81 an hour received a $5-an-hour increase last month under an agreement between Tower and the Pennsylvania Association of Staff Nurses & Allied Professionals, or PASNAP, a labor union. The size of the pay boost was smaller for higher-paid nurses. Nurses making $44.31 an hour or more received no raises.

Besides widespread wage increases, Tower started paying retention bonuses of $5 an hour for registered nurses who work in pre-admission testing, operating rooms, the post-anesthesia care unit, and certain other departments. Tower, based in West Reading, plans to review at least every six months whether the retention bonuses are still needed.

Tower, which recently announced that it is working on forming a partnership with the University of Pennsylvania Health System, did not respond to a question about whether the changes at Pottstown were also made at its five other adult hospitals.

Rewers, the Advisory Board researcher, said retention bonuses are a better long-term solution than the sign-on bonuses that Tower and many other systems are using to attract new nurses.

Retention bonuses help “create a better culture among the nurses on the unit because you are rewarding folks that are loyal to you,” Rewers said. “It can create a difficult dynamic sometimes when sign-on bonuses are offered because nurses who are not leaving for other organizations feel as if their loyalty is not being rewarded.”

Bonuses to work overtime are another tactic hospitals are using to get more out of their nurses.

Nurses at Cooper University Hospital in Camden, for example, can earn a $1,500 bonus for working four extra 12-hour shifts, including two on weekends, over a six-week period, said Doris Bell, a registered nurse and president of the Health Professionals & Allied Employees Local 5118 at Cooper.

Cooper started that program in 2019 and kept it because “they want to incentivize people to stay here and not leave or go get a second job at another facility,” said Bell, whose union local represents 1,500 nurses at Cooper. She said nurses “look forward to it and ask me, is this going to go on?”

Temple University Health System on July 26 said it planned to spend nearly $5 million on nurses over an unspecified period of time. Details were being negotiated with the PASNAP nurses union. Temple said the effort includes the goal of hiring 200 additional nurses for its four hospitals.

Mary Adamson, president of the PASNAP union local at Temple University Hospital, said that location has 1,350 nurses now and would be fully staffed at 1,500.

Temple has proposed higher pay for nurses willing to float or jump around to different departments, bonuses for working overtime as a float nurse, and a limited program that rewards nurses with extra pay for working every weekend. The health system is also offering $20,000 sign-on bonuses for experienced emergency department nurses, according to Adamson,

“This comprehensive package of investments is part of our continuous process of reviewing and strengthening our ability to anticipate, prioritize, and fill areas of greatest nursing needs for our patients,” Michael A. Young, Temple Health’s CEO, said in a news release.

Adamson criticized the $5 million initiative for not doing enough to reward or incentivize nurses to stay at the North Philadelphia hospital.

“They are only incentivizing people that want to float and people coming in from other places,” Adamson said. “As they offer a $20,000 bonus for the ER, many ER nurses at Temple are going to go somewhere else for $20,000. I think it’s short-sighted.”