4 Rising Healthcare Hiring Trends

The healthcare industry is going through a major shift in workforce dynamics, driven by evolving patient needs, workforce shortages, and changing employee expectations. While organizations try to maintain high-quality care, several hiring trends are shaping the future of healthcare staffing. The growing use of contingent workers, rising demand for mental health professionals, increased reliance on locum tenens providers, and the adoption of flexible staffing models are redefining how healthcare employers attract and retain talent.

In this blog post we’re going to discuss how to navigate these changes successfully with several proven methods, including skills-based hiring, competitive benefits and worker experience, and direct sourcing.

1. Growing Use of Contingent Workers

Contingent workers have been in healthcare for decades, but the reliance on them has grown since the 1990s. The rise of travel nursing and temporary physician staffing began in response to workforce shortages, particularly in rural and underserved areas.

However, demand for contingent healthcare workers surged in the early 2000s due to an aging population, regulatory changes, and cost-containment strategies by healthcare organizations. The COVID-19 pandemic further accelerated this trend, highlighting the critical need for flexible staffing solutions

Contingent workers play a crucial role in the healthcare industry, as they provide essential support in hospitals, clinics, and long-term care facilities. However, most organizations today have significantly reduced the number of travelers they are using, which are traditional 13-week assignments. Instead, they are focused and relying on other flexible staffing solutions, such as temporary, contract, and per diem workers to maintain patient care standards.

These professionals, including nurses, physicians, allied health workers, and administrative staff, help fill critical gaps, particularly during peak demand periods, seasonal fluctuations, or public health emergencies. By leaning on contingent labor, healthcare providers can ensure continuity of care while managing staffing costs efficiently.

Many organizations partner with Managed Service Providers (MSPs) and Employers of Record (EORs) to streamline recruitment, credentialing, and payroll processes for temporary staff. Advancements in workforce analytics also allow healthcare systems to strategically allocate contingent workers based on patient volume and specialty needs. It is also important to note that certain MSPs are better equipped than others to handle the 13-week traveler assignments, so organizations should choose their partner accordingly.

2. Increased Need for Mental Health Professionals

The demand for mental health professionals in the healthcare industry has risen sharply in recent years; this is driven by a growing awareness of mental health issues and an increased need for accessible care. Factors such as the COVID-19 pandemic, rising stress levels, and a greater emphasis on holistic patient care have contributed to a surge in mental health concerns across diverse populations.

In response, healthcare systems are expanding their behavioral health services to address conditions such as anxiety, depression, and substance use disorders. However, a shortage of qualified mental health professionals, including psychiatrists, psychologists, social workers, and counselors, has made it challenging to meet this increasing demand.

The growing demand for mental health services has led to an increased need for various mental healthcare professionals across different care settings. Psychiatrists and psychiatric nurse practitioners are in high demand to diagnose and treat complex mental health conditions, particularly in hospitals and specialized clinics.

Clinical psychologists and licensed professional counselors are also needed to provide therapy and behavioral interventions. Additionally, social workers and case managers play an important role in connecting patients with community resources, coordinating care, and supporting crisis intervention. With the rise of telehealth, there is also a growing demand for virtual therapists and remote mental health professionals who can expand access to care, particularly in underserved and rural areas.

Healthcare organizations can address mental health professionals shortages by prioritizing workforce retention and investing in future talent pipelines. Offering competitive salaries, loan forgiveness, flexible schedules, and mental health support helps retain existing professionals and prevent burnout. At the same time, partnering with universities, expanding training programs, and creating apprenticeship pathways ensure a steady influx of new talent, strengthening the workforce for long-term sustainability.

3. Rising Locum Tenens Positions Demand

The demand for locum tenens positions in the healthcare industry is rising as organizations seek flexible staffing solutions to address workforce shortages and fluctuating patient needs. Physician burnout, retirements, and an aging population are increasing the strain on healthcare systems. Locum tenens professionals provide that essential coverage in hospitals, clinics, and specialized care facilities.

These temporary providers help maintain continuity of care, reduce patient wait times, and alleviate the burden on full-time staff. They ensure that healthcare organizations can continue delivering high-quality services even amid workforce challenges.

In addition to filling critical gaps, locum tenens positions offer healthcare professionals greater flexibility and career opportunities. Many physicians, nurse practitioners, and other medical providers are drawn to these roles so they can gain diverse clinical experience, work in different geographic locations, and maintain a better work-life balance.

Healthcare facilities also benefit from the cost-effectiveness of locum tenens staffing; it allows them to scale their workforce based on patient demand without long-term employment commitments.

4. Use of Flexible Staffing Models

Flexible staffing models in healthcare are transforming workforce management, which enables organizations to address fluctuating patient demands, workforce shortages, and financial constraints. Leveraging contingent workers, per diem staff, and locum tenens professionals enables them to scale their workforce based on real-time needs; this ensures uninterrupted patient care without overburdening full-time staff.

Such adaptability is valuable during seasonal surges, public health emergencies, or when specialized expertise is needed in specific locations. Additionally, flexible staffing helps mitigate burnout among permanent employees by distributing workloads more effectively.

Beyond operational efficiency, flexible staffing models also contribute to cost savings and improved workforce retention. Through leaning on contract-based professionals, organizations can better manage labor costs and avoid long-term salary commitments while still accessing highly skilled talent.

These models also provide healthcare professionals with more control over their schedules, fostering job satisfaction and work-life balance, which can lead to improved retention.

Overcoming Healthcare Staffing Challenges

Skills-based Hiring

Skills-based hiring helps healthcare organizations overcome staffing challenges as it prioritizes practical competencies over traditional degree requirements. Focusing on skills like patient care, medical technology proficiency, and problem-solving helps employers expand their talent pool and fill critical roles more quickly. This approach also ensures that experienced professionals—regardless of formal credentials—aren’t overlooked; as a result healthcare can better adapt to evolving industry demands.

Beyond improving hiring efficiency, skills-based hiring enhances retention as it establishes clear career pathways and targeted training programs. Employees can upskill and advance, which fosters job satisfaction and loyalty, in addition to reducing turnover. For healthcare employers, this strategy builds a resilient workforce while improving overall patient care.

Leading Benefits & Worker Experience

Leading benefits and an exceptional worker experience are essential for attracting and retaining top talent. Competitive compensation alone is no longer sufficient—healthcare organizations must offer holistic benefits that support employees’ well-being, including robust mental health programs, flexible work options, childcare assistance, and career development opportunities.

Prioritizing an outstanding worker experience—through user-friendly technology, efficient administrative processes, and a culture of recognition— also significantly impacts retention and performance. Burnout and high stress levels are prevalent in healthcare, which makes it crucial for organizations to invest in initiatives that promote work-life balance; providing opportunities for professional growth creating an inclusive, positive work environment is also essential.

Additionally, tools like easy-to-use vendor management systems (VMS), seamless timesheet submission, and same-day pay options can enhance convenience and financial stability for workers, reducing frustration and improving engagement.

Partnering with an EOR can further support these efforts by offering access to competitive benefits and ensuring a seamless, compliant employment experience—without adding administrative burden or excessive costs.

Interested in an EOR? Grab the guide to help you select the best EOR partner for your organization.

Direct Sourcing Strategies

Direct sourcing workers refers to the practice of an organization identifying, engaging, and hiring contingent talent directly—rather than relying on third-party staffing agencies—by leveraging its own employer brand, talent pools, and recruitment technology.

During the pandemic, healthcare institutions and hospitals were unable to hire enough full-time employees to meet critical demand. As a result, a lot of them had to fill that need by hiring more workers on a contractual basis. Although several years have passed since, many of those healthcare organizations continue to heavily rely on this contingent talent and are unable to break free from the high-priced agencies that oversee and manage those workers.

To mitigate this, healthcare organizations can utilize direct sourcing to fill positions via their own networks in conjunction with working through staffing agencies, especially as they need direct access to talent for flexible contingent roles ranging from four to six weeks to 13 or 26 weeks.

This approach benefits organizations in many ways, especially as it returns long-term control to the hospital and reduces costly staffing agency mark-ups. It’s also important to note that direct sourcing does not to be a complex or time-consuming investment, as a lot of healthcare providers and hospitals are able to build atop their existing infrastructure.

Learn how to overcome staffing challenges and build your own agency in healthcare when you  download our ebook.

Disclaimer: The content in this blog post is for informational purposes only and cannot be construed as specific legal advice or as a substitute for legal advice. The blog post reflects the opinion of Magnit and is not to be construed as legal solutions and positions. Contact an attorney for specific advice and guidance for specific issues or questions.