Responding to the Current Labor Market: Key Findings from CPCA's 2022 Compensation & Benefits Survey
The backbone of California's community health centers (CHCs) is its mission driven, diverse and committed workforce. However, the current labor market continues to exacerbate a CHC’s workforce challenges while also impeding its ability to expand access to care in the communities they serve. According to CPCA's 2022 Compensation & Benefits Survey, health centers are operating in a labor market that is characterized by high levels of inflation, rising costs of labor, and a severe shortage of professionals working within the healthcare industry.
Such confluence of factors has contributed to a spike in turnover and vacancy rates among clinics. The average 12-month turnover rate reported by CHCs has more than tripled since 2020. Health centers also continue to report high vacancy rates and prolonged periods of times to fill staff vacancies. In 2022, clinics reported an average physician vacancy rate of 23 percent and needed more than six months to fill the position vacancy. Such circumstances underscore the need for a clinic to strategically invest in its human capital and revisit its total rewards to address recruitment and retention challenges.
Health Center Response
Although the direction of both the labor market and inflation for the future is uncertain, health centers are increasing their investments to keep up with the rising cost of wages, need for expanded benefits, and flexible working conditions. The following are a high-level overview of strategies made by clinics to enhance their labor market competitiveness. Additional details on the investment amounts, year-over-year trends, compensation comparisons against hospitals, and recruitment cost implications are available through CPCA's 2022 Compensation & Benefits Survey Report.
Salary Budget Increases
In 2022, nearly ninety percent of CHCs increased their compensation offering in reaction to labor market conditions. The average salary increase reported by CHCs was 5.4 percent. While most organizations cannot implement salary budgets that match the actual rate of inflation, nearly three-quarters of health centers budgeted a fiscal year 22-23 salary increase that is greater than their fiscal year 21-22 salary increase. Most clinics also reported offering an off-cycle increase mid-year to address ongoing and sustained high levels of inflation.
Sign-On Bonuses
In addition to increasing base wages, health centers are offering recruitment incentives to alleviate workforce shortages. Offering sign-on bonuses is a recruitment incentive that has been prevalent in other industries for many years and is gaining traction in the healthcare industry. Across the state, the percentage of health centers that offer sign-on bonuses to staff increased in 2022, indicating that recruitment challenges have intensified for clinics.
Healthcare Plans
Health centers reported enhancing their healthcare benefits while also absorbing the rising costs in premiums. A majority of clinics offer more than one health plan to employees and offer a plan that does not require any premium contribution by the employee.
Flexible Workplace
Many health centers increased their time-off offerings, either as a direct response to pressures brought on by the pandemic or employees’ desire for greater flexibility. A vast majority of health centers reported offering remote work to at least some of their staff.
Wellness Programs
Several health centers are utilizing wellness programs to provide additional benefits to employees in a cost-effective manner, especially as the pandemic has elevated the significance of benefits. One in three health centers are boosting the physical/emotional wellbeing component of their wellness program, while another third is enhancing the career wellbeing component, which includes professional development.
CPCA’s 2022 Compensation & Benefits Survey Results
Each year, CPCA conducts an annual compensation & benefits survey and produces a report to provide unique data that allows clinics to benchmark compensation and benefits offerings against other healthcare employers, including large hospitals. The data captured through CPCA’s 2022 Compensation & Benefits survey reflects insights on total rewards and compensation policies from 30,084 employees that work for 137 CHCs throughout California. Data resulting from CPCA's Compensation & Benefits survey complies with the Safe Harbor guidelines established by the Federal Trade Commission (FTC) and the US Department of Justice. A full copy of the report was made available to participating clinics in November and is available for purchase through the CPCA's store. For additional information on the survey, changes made in 2022, or general guidance, please click here or contact CPCA’s Associate Director of Workforce & Special Populations, Isa Iniguez at iiniguez@cpca.org.