Winning the talent show: healthcare labor is a key to U.S. location strategies

Doctors and nurses working with patient in a healthcare facility

Access to talent drives U.S. healthcare locations

As widely reported during and immediately after the COVID-19 pandemic, nationwide shortages of clinicians have become a top concern among healthcare providers, and for good reason. Prior to the pandemic, demand for healthcare workers was already intense and nursing shortages early in the pandemic kickstarted a significant increase in the use of travel nurses. While travel nursing pay has decreased significantly from highs seen in 2021, additional demand for nursing is widely expected to increase as the population ages and continues to grow substantially in the Sun Belt. Coupled with other labor and supply cost challenges, these trends make it clear that the availability of key talent has become a necessary ingredient in healthcare providers’ location strategies, alongside population demographics and other real estate-adjacent data.

No two places are the same

Let’s look at a specific, regional example. The lack of Certificate of Need (CON) regulations and booming population growth in Texas make the Lone Star State attractive to healthcare providers seeking growth opportunities. But the Texas Department of State Health Services estimates the unmet demand for nurses is currently 33,000 and expects that number to grow to 57,000 by the year 2032. Recruiting and retaining nurses in this environment will require a sophisticated location strategy that understands where nurses reside, enabling providers to offer employees more attractive commute times and lifestyles.

The Austin and San Antonio markets are both high-growth markets just 80 miles apart, making them attractive areas for growing healthcare providers. However, when we zoom in on where nurses live and work, we see a distinct pattern. Travis County (home to Austin) and Bexar County (home to San Antonio) both have very high net commuter scores, meaning there are more nursing jobs in their counties than there are nurses who live in the counties. Travis County has 10,567 nursing jobs but only 7,529 nurses living in the county, while Bexar County has 18,059 nursing jobs with only 15,989 nurses living in the county.

In contrast, Williamson County (home to Round Rock) has a negative net commuter score (-1,844) as there are fewer nursing jobs there than there are nurses who live there. Hays County and Comal County (the two counties between Travis County and Bexar County) also have pretty significant negative Net Commuter Nurse scores of -738 and -348, respectively. This is not unique to nursing, as most city centers tend to pull talent from surrounding areas.

Now, if we look at the average hourly wages of nurses for the same geographies, we see that nursing jobs in Travis and Bexar Counties have higher average hourly rates ($40.40 and $39.80, respectively) than nursing jobs in the surrounding counties. The average hourly rates for nursing jobs in Williamson, Hays and Comal Counties are $37.80, $37.90 and $38.20, respectively. Broadly speaking, nurses in the Austin and San Antonio markets seem to be willing to take slightly lower pay to work closer to home.  And there are a few specific areas that seem to be most opportune for healthcare providers to locate if they need to hire nurses — Williamson, Hays and Comal Counties all export a significant number of nurses to other counties, and the nursing jobs there would be slightly lower cost for employers than the larger Travis and Bexar Counties.

Chart comparing Net Commuter Ratio to Average Hourly Wage for healthcare worker in several Central Texas Counties

Getting a second opinion

Like Texas, Florida has seen dramatic population growth since 2000 and certain aspects of COVID-19 pandemic responses seemed to drive more migration of the U.S. population to the Sunshine State.  Similar to the Austin and San Antonio markets, the Central Florida counties (home to the larger cities) seem to be pulling nurses in from the surrounding counties. Hillsborough (home to Tampa) and Orange (home to Orlando) Counties have net commuter scores of 2,365 and 3,718 for nurses, respectively. Nursing jobs in St. Petersburg, Clearwater, Tampa and Orlando appear to be pulling a significant number of residents from Pasco, Manatee, Polk, Seminole, Lake and Osceola Counties. In fact, Pasco County exports more nurses (1,808) for jobs outside its territory than any other county in Florida, and Manatee County exports the third-most (1,200) in the State.

However, unlike their counterparts in Texas, nurses in Florida do not appear to be accepting lower pay for nursing jobs in their home counties. In fact, five of the six counties with the highest average hourly rate for nursing jobs are net “exporters” of nurses to other counties in the region. And Orange County (Orlando) has the third lowest average hourly rate for nursing jobs in this region, higher than only Hernando County (Spring Hill) and Sumter County (Bushnell and The Villages).

Chart comparing Net Commuter Ratio to Average Hourly Wage for healthcare worker in several Florida Counties

Integrated talent data yields superior strategies

As we can see in these examples it is not safe to assume that access to labor and wages are positively correlated in every market. Furthermore, the nuance that exists for the supply and pay for nursing jobs from one market to another can influence other major success factors for healthcare providers relying on an efficient, effective workforce. Therefore, incorporating advanced measures of talent supply and pay for key personnel — like nurses, techs, rehab therapists and advanced practice providers — will be necessary for providers to best inform location strategies as they grow to meet patient demands in a variety of settings and across every service line.

Reach out to our experts to discuss and analyze your portfolio using our AVANT suite.

Avison Young’s AVANT technology leverages the supply and cost of talent with other real-estate adjacent factors such as predicted demand by clinical service line, payor mix segmentation and population demographics, while simultaneously tracking and optimizing footprints for stronger, more transparent decision-making.

Reach out to our experts to discuss and analyze your portfolio using our AVANT suite.

Jacob Crawford

    • Global Product Owner - AVANT, Healthcare
    • Research
[email protected]

Todd Ohlandt

    • Principal, Avison Young Consulting Services
    • Consulting & Advisory
[email protected]

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