Hospital Labor Shortage Updates: Urgent Changes Needed to Avoid Lab Tech Crisis

November 27, 2023 |
Article | 5 min
| Business Insights

The medical industry continues to face a labor shortage, specifically when it comes to laboratory technology and testing. These behind-the-scenes technicians are indispensable to any hospital or skilled nursing facility.

Before Covid-19, lab techs were running 13 billion tests in the US each year. Add another billion SARS-CoV-2 tests on top, and you can see these labs’ pivotal role in the American healthcare system. According to The Commission on Office Laboratory Accreditation (COLA), lab tests shape about two-thirds of all decisions made by medical professionals.

A dwindling skilled labor workforce has increased healthcare costs and patient wait times. If things don’t change soon, hospitals could see unnecessary burdens placed on their already strained staff. Let’s unpack the changes hospital leaders can consider to attract new hires and retain their current staff.

What Challenges Do Hospitals Currently Face?

The US healthcare sector faces a skilled labor shortage across all positions. According to the American Hospital Association, the nation is short 124,000 physicians as of this year; but according to the AHA’s findings, the industry will also need to hire 200,000 nurses annually to keep pace with rising demand.

Lab techs working together during tests

We’re facing a critical shortage of lab tech professionals, with about 338,000 currency practicing. While that sounds like plenty of workers, it’s roughly one lab scientist per 1,000 people.

Dr. Rodney Rohde, a professor of clinical laboratory science at Texas State University, puts that figure in perspective, saying, “Lab testing is the single highest-volume medical activity affecting Americans […] Every time you enter a hospital or health care facility, your life is in the hands of a medical laboratory professional.”

Research indicates that more than 6.5 million healthcare workers may leave their jobs for good by 2026 if these trends continue. However, only 1.9 million are projected to take their place—leaving us about 4.5 million workers short.

Burnout Becomes Top Reason for Labor Shortage

Burnout is among the leading causes of laboratory workers leaving their positions. A study published in the American Journal of Clinical Pathology found that 85.3% of lab techs reported feeling burnt out. About one-third of respondents cited inadequate staffing and burdensome workloads, while about 15% said a lack of recognition made them disengage.

In nursing facilities, fall rates increased by 17%, and pressure injuries shot up by 42%. Early Covid-19 shortages showed firsthand how burnout among staff could lead to medical errors and injuries.

In a 2022 letter to Congress, the American Hospital Association (AHA) highlighted critical labor shortages across US hospitals. According to the AHA, 23% of hospitals reported severe staffing shortages. To compensate, they’ve had to lean on contract labor from healthcare travel firms, which charge rather exorbitant rates in comparison. These added expenses can exacerbate hospitals’ current challenges.

Lab techs discussing with manager

Healthcare Labor Shortage: Today’s Impact and Future Implications

Among all activities in the medical industry, lab-based diagnostic testing has the highest volume. When patients enter a hospital for care, they will most likely have clinical lab tests performed.

A shortage of lab technicians leads to a backlog of necessary tests. Patients who need results ASAP may not get them promptly; likewise, patients who are ultimately fine might wait several hours before they can go home. Due to the labor shortage, those patients may unnecessarily take up hospital beds.

Recent estimates claim the lab tech profession is short between 20,000 and 25,000 workers—and if things don’t change, those numbers are expected to grow.

We know that Covid-19 had a significant impact on hospital safety trends. Unfortunately, lagging data collection prevented us from discovering those impacts until several quarters—if not years—later.

Consider that, in the first six months of 2021, there were 569 sentinel events—a patient safety event resulting in death, permanent harm, or severe temporary harm—reported to the Joint Commission. That’s up over 100 events from the same period in 2020. Due to gaps in data sharing, impactful conclusions regarding these events’ frequency and long-term trends could not be made.

Lab tech discussing results with a patient

Which Areas Does the Skilled Labor Shortage Affect?

Research has uncovered several areas within hospital operations that appear to be directly affected by the skilled labor shortage.

The first has to do with staff compensation. These past few years have highlighted nurses' vital roles in the healthcare system. As they left the workforce, hospitals sometimes had to spend more money on contract travel agencies with rates as high as $240/hour. Data shows that contract nurses accounted for nearly 40% of hospital nurse expenses in January 2022.

Patient receiving a check-up

Also, the medical labor shortage can lead to issues with diagnostic accuracy. Even before the pandemic, hospitals faced issues surrounding misdiagnosis or delayed diagnoses.

Finally, labor shortages have prevented many Americans from keeping up with preventative care and regular doctor’s visits.

Protect Your Staff: The True Cost of Lab Tech Turnover

Turnover has been a significant issue for hospitals over the past few years. The 2022 NSI National Healthcare Retention & RN Staffing Report found that average hospital turnover rates in 2021 were 25.9%, a 6.4% increase from 2020. Even worse, the average hospital has turned over 100.5% of its staff over the last five years.

It’s not that nurses, doctors, and lab technicians were being fired or laid off, either. In fact, 95.5% of all hospital separations were due to voluntary terminations.

Turnover is expensive in every industry. Hospitals and skilled nursing facilities are no exception. In 2023, the average turnover cost for a bedside RN runs more than $52,000, costing the average hospital between $6.6–10.5 million annually. Even a single percentage point increase in turnover rate can cost or save hospitals approximately $380,600.

Some experts believe the average cost of turnover across all healthcare occupations can be as high as 150% of a mid-level employee's salary. Furthermore, the true cost of lab tech turnover isn’t limited to simply hiring a new employee. Several other factors may increase expenses.

How to Protect Your Staff

Consider the amount of overtime you might have to pay another lab technician to fill those hours. Perhaps you don’t have the available staff and must now rely on contract workers while you look for full-time hires.

Add in the time it takes to review and interview candidates—not to mention paying someone to train them—and you might be looking at a very costly endeavor to replace just one of your lab techs.

Lab tech testing samples

Taking the necessary steps to reduce turnover could save your hospital hundreds of thousands—if not millions—of dollars. Consider beginning by unpacking the primary causes of turnover and addressing those within your facility. These causes might include:

  • Declining workplace engagement
  • Burnout (leading to stress, anxiety, depression, and poor sleep)
  • Tight labor markets
  • The baby boomer generation being on the cusp of retirement
  • Those not looking for long-term employment (job hoppers)

Increasing workplace engagement can help ease the turnover problem, but it’s not the end-all-be-all. Let’s unpack some other strategies you can leverage to decrease your facility's lab tech turnover rates and expenses.

Lab Tech Hiring and Retention Strategies

The skilled labor shortage probably won’t disappear on its own. Hospitals may also need to pivot from current strategies to hire and retain long-term lab technicians. This could include offering opportunities for career growth, competitive benefits packages, and a work-life balance that fits today’s culture.

Examine Your Recruiting and Onboarding Strategies

Attracting top talent begins at first contact. Today’s workers often want more than just competitive salaries. They usually expect robust benefits, continued education, adequate training, and a positive workplace experience.

The recruitment process is your first chance to “sell” your facility to potential hires. Remember, you’re not just looking to fill vacant positions. You’re looking for talented lab techs that’ll stay for years to come. Give them a reason to remain with your hospital other than just compensation. You might consider:

  • A sign-on bonus for skilled workers who’ve proven their ability within the industry
  • Flexible benefits and retirement packages that meet employees’ individual needs
  • A positive onboarding experience that makes hires feel well-trained and ready to take on this new role

Consider Scheduling Best Practices

New lab techs may not stay very long if they feel overworked and underappreciated. Adequate staffing and scheduling practices often helps prevent burnout and unnecessary stress in the lab. Since both can lead to medical errors, adopting scheduling best practices can prove a win-win for your staff and patients.

Flexible scheduling has taken on new meaning in a post-pandemic world. Obviously, lab techs can’t work from home—so finding other ways to relieve in-person stress and workloads is necessary.

Lab tech viewing a sample

These can include staggered start times, job sharing, and overlapping shifts. Your employees are balancing work with personal and familial needs. Flexible scheduling can give them some much-needed breathing room.

You can also leverage self-scheduling practices, allowing lab tech employees to schedule their shifts. Now, they have control over when they work and how much overtime they take on.

Hone in on Career Development

Research from Deloitte in 2020 found that inadequate or lacking career development opportunities were among the top reasons why employees sought new jobs. Despite this, many labs across America—especially small labs of less than ten technicians—do not offer clear career paths.

Consider creating a career ladder to show employees that you care about their development. After all, you want them to grow in your laboratory, not someone else's. Furthermore, you might try working with lab tech employees to create a career map identifying their strengths and weaknesses. From there, you can assign leadership positions and roles across the team.

Help Your Lab Facility Beat the Shortage

Facilities can’t function without adequate lab staff. They work behind the scenes to ensure every patient who walks through your facilities receives correct care and diagnosis.

But pivoting your hiring and retention practices to reduce turnover probably won’t happen without significant financial planning and investment. Reach out to start a conversation with the team at Bank of Blue Valley, a division of HTLF Bank today.

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