Help Wanted in Healthcare: Employer Demand for Talent

Healthcare hiring has been on a hot streak lately, even as the broader labor market has cooled from the rapid growth of the COVID era. Nationally, private-sector healthcare accounted for 45% of all job gains in 2024, more than any other sector. In North Carolina, private healthcare employers added 20,500 jobs throughout the year, 43% of the state’s total job growth.[1]

But these impressive numbers mask underlying challenges: healthcare employers continue to grapple with hiring difficulties and labor shortages. In this second installment of our blog series, we explore the trends in healthcare job openings, the challenges employers face when hiring, and the technologies that may address labor shortages.

Trends in Healthcare Job Openings

Demand for healthcare workers surged after the early stages of the COVID-19 pandemic, when infection risks and operational disruptions were prevalent. Early on, the healthcare sector faced mounting challenges: workers endured physical danger and psychological distress, elective procedures ground to a halt, and widespread layoffs ensued. But by 2022, the sector appeared to turn a corner, with employment surpassing pre-pandemic levels and job openings reaching record highs nationwide. Healthcare providers were in desperate need of workers as preventative care and elective surgeries ramped back up.

A similar story unfolded in North Carolina as pandemic challenges faded and healthcare providers sought to fill vacant positions. The growing need for workers was evident across healthcare occupations:

• Healthcare Support Occupations:Job openings for roles such as Home Health Aides, Personal Care Aides, Nursing Assistants, Medical Assistants, and Phlebotomists increased from 15,400 in January 2020 to a peak of 31,100 in August 2022. By the end of 2024, openings fell to 20,800 but were still 35% above pre-pandemic levels [Figure 1].
• Healthcare Practitioners and Technical Occupations: Job openings for positions such as Registered Nurses, Nurse Practitioners, Physicians, Dental Hygienists, and Pharmacy Technicians rose from 15,500 in January 2020 to a peak of 27,600 in June 2023. By the end of 2024, openings decreased to 20,300 but remained 31% higher than pre-pandemic levels [Figure 1].

Figure 1

Job openings have declined from their 2022 and 2023 peaks as labor market conditions have normalized. Healthcare employers are finding it easier to fill open positions than in previous years, but that’s not to say hiring challenges have disappeared. Competition for talent remains, and the ongoing gap between job openings and available jobseekers suggests labor shortages persist. In 2024, there were just 0.5 jobseekers per job opening for Healthcare Practitioners and Technical Occupations and only 0.2 jobseekers per job opening for Healthcare Support Occupations.[2]

Hiring Challenges: What Employers Are Saying

While data on job openings provide an overview of the hiring landscape, survey responses offer additional insights into the specific challenges that employers face.

According to our latest 2024 Employer Needs Survey,[3] 61% of North Carolina healthcare employers who attempted to hire within the previous year ran into challenges when filling vacant positions. This marked a sizeable decline from the 84% of healthcare employers who reported hiring difficulties in the previous 2021-2022 survey. Again, this suggests that hiring challenges continue but are not as pronounced as earlier in the pandemic recovery.

Healthcare employers hiring for entry-level positions pointed to a lack of employability skills—such as work ethic, motivation, and reliability—as the most common hiring obstacle [Figure 2]. Having a low number of applicants was the second most frequently cited difficulty. Nearly half of the respondents noted that a lack of work experience or necessary education contributed to hiring challenges.

When recruiting for more experienced roles, healthcare employers said a low number of applicants was the primary difficulty [Figure 2]. Additionally, 52% of employers reported that applicants were unwilling to accept the offered wages, making low pay a prominent concern for job candidates. A lack of technical skills or soft skills was also mentioned, but this ranked lower on the list compared to challenges like insufficient work experience or education.

Healthcare employers identified several barriers to employment for job applicants. Notably, 38% of employers highlighted childcare as a significant obstacle for entry-level applicants—a pertinent issue given the healthcare sector’s high proportion of female workers. Transportation challenges also posed a major barrier to many prospective jobseekers.

Figure 2

Addressing Labor Shortages with AI and Automation

Faced with enduring hiring challenges, will healthcare employers turn to automation and artificial intelligence (AI)? The intuition is that these technologies could compensate for missing workers or substitute for tasks that were once exclusive to humans. However, we must acknowledge the inherent uncertainty—there’s still much we don’t know about AI’s long-term impact on the labor market, let alone how it may play out in the healthcare sector.

Survey findings provide a helpful starting point for this discussion. So far, there’s limited evidence that healthcare employers rely solely on AI or automation to resolve hiring difficulties. Our latest Employer Needs Survey revealed only 8% of healthcare employers in North Carolina increased their use of AI or automation in response to hiring challenges. Meanwhile, 74% of healthcare employers raised wages for new hires, and 64% raised wages for existing workers, indicating a stronger reliance on pay increases to deal with workforce challenges.

Nationally, AI usage in the healthcare sector remains relatively low, hovering around 6% of healthcare companies in recent months.[4] This adoption rate lags behind other sectors like the Information sector and the Professional, Scientific, and Technical Services sector [Figure 3].

Figure 3

Several factors may limit AI adoption in the healthcare sector. Many roles require human interaction, clinical judgment, and compassion—qualities that technology cannot easily replicate. Ethical considerations and patient privacy concerns may also impede AI implementation in healthcare settings, not to mention, the potential for AI to “hallucinate”, producing incorrect or misleading results that could jeopardize patient health. That said, AI is already being applied in certain areas, such as enhancing diagnostic accuracy, optimizing drug dosages, and detecting early-stage cancers.

While AI holds promise in certain healthcare applications, its broader role in addressing labor shortages remains uncertain. For now, employers appear to lean on other strategies, like raising wages, to fill workforce gaps. Whether this trend shifts in the years ahead is something we’ll continue to watch.