How to Improve Financial Wellness for Frontline Healthcare Workers...
Updated: Oct 2
While Saving Your Company Money
With 22 million healthcare workers in the US, the industry is one of the fastest-growing and largest sectors in the country. According to the Census Bureau’s 2019 American Community Survey (ACS), healthcare workers account for 14% of all US workers.
However, the pandemic resulted in large numbers of healthcare workforce shortages, leaving those employed to endure tremendous hardship and risk on the frontline. Their significant sacrifice for the greater good of society is often made for low pay, few benefits and little reward.
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Why wage gains mean nothing for frontline healthcare workers
Healthcare support and service workers such as phlebotomists, housekeepers, nursing and medical assistants, cooks and home health aides get paid as little as $16 per hour which is well short of a living wage. With rising inflation many of these workers, of whom more than 80% are women and people of color, are unable to afford basic necessities such as medicine, groceries and daycare.
BLOOMINGTON, Ind. report highlights the changes in the U.S. health care workforce and found that the average wages for U.S. health care workers rose less than wages in other industries. According to a JAMA Health Forum study, average wages in healthcare rose 5% from 2019 to 2020 while all industries’ average wages rose 6.7% during the same time in 2020, and 1.5% increase in health care versus 6.9% nationally in 2021.
Although US governors are pushing for wage increases for healthcare workers who’ve proved essential during the coronavirus pandemic, the proposed 6% increase may have minimal impact as wage inflation continues to trail general inflation. Currently wage inflation rates remain less than half the current rate of inflation. BLS reported a 7.9% increase in the Consumer Price Index (CPI) against wage increases of 3.4%. Real (inflation-adjusted) average hourly earnings fell 3% from May 2021 to May 2022.
The change in real average hourly earnings combined with a decrease of 0.9 percent in the average workweek resulted in a 3.9-percent decrease in real average weekly earnings over this period. This means that healthcare workers' take-home pay is shrinking and any wage gains are being outpaced by inflation.
The Great Resignation’s toll on healthcare
High numbers of healthcare workers are quitting their jobs at an alarming rate; worn out, physically and mentally, from dealing with the recent pandemic. Within nursing alone, a study by The American Association of Critical-Care Nurses (AACN) recently found that 66 percent of acute and critical-care nurses have considered leaving the profession. Remaining healthcare workers are left to care for more people with fewer resources, further fraying the fragile system and harming patients and healthcare providers alike.
The BLOOMINGTON, Ind. report found that health care employment levels declined in mid-2020 to 21.1 million jobs, a 5.2% decrease from 22.2 million in 2019. Employment declines varied across health care organization types during the first year of the pandemic, with the largest decline taking place among dental offices (10%) and skilled nursing facilities (8.4%) with many of those resigning leaving the career field entirely.
Consequently the healthcare labor market is experiencing a ‘Great Resignation’ of its own, spurred on by the effects of the pandemic. According to reports, the field has lost an estimated 20% of its workforce, including 30% of nurses which has created critical staffing shortages across hospitals and health systems. A 2021 Washington Post-Kaiser Family Foundation survey found that nearly 30% of health care workers are considering leaving their profession altogether, and nearly 60% reported impacts to their mental health as a result of COVID-19 pandemic working conditions.
The crisis shows no signs of abating, with an analysis of EMSI data forecasting a shortage of up to 3.2 million health care workers by 2026. A recent AMA report said America will face a shortage of up to 124,000 physicians by 2033, and will need to hire at least 200,000 nurses per year to meet increased demand and to replace retiring nurses.
Harvard's Dr. Gail Gazelle says "After the flexibility of working at home, many people don't want to return to the constraints that a workplace involves. Others have reconsidered their goals and priorities, leading them to try something new or move to a new organization. The levels of burnout are high in healthcare and in many other fields, so many people are leaving in an effort to focus on their mental health. Whatever the reason, the level of disruption throughout the economy is high".
How Sorbet provides a win-win PTO solution for better financial wellbeing
To improve their financial wellbeing, employees need more money, however wage inflation is already at its highest level since December 1981 and wage advances or payday loans are inadequate solutions. To keep up with rising costs, 16.8% of frontline healthcare workers find themselves working multiple jobs.
As a result, healthcare workers are stressed to the brink. To make matters worse employees are not taking time off, either because they cannot afford a vacation or need to work extra hours to supplement their income, which results in higher burnout rates and turnover costs for employers. Furthermore, when employees don’t take time off, it accrues creating a liability on the company’s balance sheet which balloons with increases in pay. This has resulted in over $300B in annual accrued PTO liabilities in the US.
At some point, every employee will leave their job. If employees have accrued a significant amount of PTO, employers are often faced with expensive payouts which are impacted by wage inflation.
Sorbet’s one-of-a-kind solution allows employees to exchange unusable portions of their PTO for cash, leaving their monthly salaries untouched. For employees, PTO is an illiquid asset that they may lose entirely or can't cash out until they leave their company. However with Sorbet, employees gain control of their PTO usage and can choose how they want to spend their PTO, by either using their days or converting the unusable portion of their time into cash.
With Sorbet, an average US worker would be able to unlock approx. $3,000 a year by accessing the value of their accrued PTO, tapping into their own hard earned money, instead of them having to turn to pay advances or loans.
At the same time, companies using Sorbet can remove PTO liabilities from the balance sheet. This can be achieved if PTO can be turned from an unpredictable liability into a predictable payment. This ensures greater control and predictability of cash flow which allows CFOs to forecast finances more accurately which is particularly important during a financial downturn.
In the end, it is most important for employers to give real value to the frontline healthcare workers who are looking for personalized options that address all of their human needs including education assistance, child and elder care and paid time off.
Allowing employees to cash out their unusable PTO provides them with instant cash when they need it the most. During this period when interest rates, mortgages and cost of living are sky high, giving employees the choice and freedom to use their PTO in a way that works for them provides real added value, financially and emotionally.
Give your frontline healthcare workers extra cash when they need it the most WITHOUT touching their salary!
Cash out unusable PTO with Sorbet for better financial wellness. click here and schedule your free Sorbet demo today.