Healthcare workforce warning signs are flashing red: 5 steps to turn the tide 

5 steps to turn the time in the healthcare industry

A breaking point built over time

The alarms that have been ringing in the healthcare workforce are getting harder to ignore.

Across hospitals, clinics, and care settings, signs of strain are surfacing — burned-out staff, empty shifts, high turnover, and declining morale. This isn’t some sudden, unexpected rupture in the healthcare system. It’s the result of years of sustained pressure, especially on those holding up the foundation: hourly and lower-income healthcare workers.

Mercer’s most recent Inside Employees’ Minds (IEM) research has revealed a troubling pattern, showing that sentiment among healthcare workers remains concerningly low — and declining fast. Especially among hourly workers earning less than $60,000 per year, confidence in career growth and trust in leadership have dropped by double digits. These workers — the backbone of the healthcare system by any measure — are approaching a breaking point.

This article unpacks the most urgent findings from Mercer’s 2024/2025 IEM survey, as highlighted by our recent #MercerLive LinkedIn Live session with Mercer experts John Derse, Adam Pressman, Candice Gary, and William Self. Here, we’ll review the root causes of the perfect storm facing the healthcare industry and lay out five strategic actions employers can take to respond. 

The message from the data is unmistakable: if healthcare organizations want to retain talent and protect care quality, they must act — and act now.

A sector in decline: confidence, commitment, and care

Mercer’s 2024/2025 Inside Employees’ Minds (IEM) research paints a stark picture of the healthcare workforce — particularly among hourly and lower-wage employees. The numbers reveal a widening disconnect between employees and their organizations.

The sharpest decline is in career confidence: among healthcare workers earning less than $60,000 a year, the belief that their career goals can be met at their current employer plummeted by 16 points over the past year. That kind of drop suggests a systemic failure to provide visible, attainable growth paths for a critical segment of the workforce.

Hourly healthcare workers also lag overall hourly workers when it comes to feeling their teams are given adequate resources to accomplish their objectives (-6 points). Equally concerning, willingness to recommend their workplace fell by 14 points year over year. When employees stop advocating for their employer, it’s often because they no longer feel valued, supported, or optimistic about the future.

Why it’s happening: the crisis behind the numbers

The steep declines in sentiment among hourly and lower-wage healthcare workers aren’t happening in a vacuum — they’re the result of long-simmering structural challenges that have only intensified since the pandemic.

Chief among them is a persistent labor shortage. Mercer projects a shortfall of 100,000 healthcare providers over the next five years, a gap that stretches already-thin teams and accelerates burnout. As job openings outpace hiring, remaining staff are expected to do more with less, leading to chronic overload.

This dynamic fuels instability across the board. As new roles open and backfills stall, organizations are caught in a cycle of high churn and constant onboarding. For frontline workers, that often translates to longer hours, inconsistent shift coverage, and added pressure to train new colleagues while managing their own demanding workloads. Hourly healthcare workers also expressed lower satisfaction than hourly workers in all industries, when it comes to fairness in flexible and remote working arrangements (-4 points). Half of all healthcare workers would like the option of working a compressed work schedule.

As Will Self noted during our LinkedIn Live event, “You’re talking about an industry where expenses have accelerated quickly... and yet, there’s this structural shortage of people to be hired... which creates a really difficult situation if you're actually on the ground.” It’s not just that things are hard, he explained, but that what’s hard is becoming unsustainable for the people in the field.

These indicators paint a picture of a workforce that is overburdened and under-supported — one that is increasingly disengaged not just because of what they’re paid, but because of what they’re expected to endure without enough tools, support, or relief.

Root causes: gaps in pay, purpose, and progress

That isn’t to say there aren’t also serious disconnects in pay and benefits. In fact, at the core of the healthcare workforce crisis there is a breakdown in the fundamentals of the employer deal. For hourly and lower-wage healthcare employees, these gaps are particularly stark.

  • Low Pay, Inadequate Benefits, and Unequal Rewards: While 78% of salaried employees across industries feel they are compensated fairly, that number dropped to just 65% for salaried healthcare workers. And among hourly healthcare workers earning under $60,000, perceptions of fair pay are even worse at 46%, 14 points lower than those in other industries — and 6 points lower than last year. Meanwhile, benefits satisfaction also fell by 11 points for healthcare workers in this income bracket, sitting 11 points lower than their higher paid hourly peers. These employees are struggling to afford the care they help deliver, with fewer feeling their benefits meet their needs or are competitive within the industry.

This problem transcends base compensation. More healthcare workers believe that great performance will not be rewarded than do, as 43% of all healthcare employees surveyed disagree with the statement that “the better their performance, the better they will be rewarded.”

  • Career Stagnation and Lack of Advancement Paths: Only 58% of hourly healthcare workers believe they can achieve their career goals where they currently work, and only 44% of those paid less than $60,000 agree — a figure that underscores a major failure in role architecture and mobility. Career advancement remains a significant challenge for hourly workers – across all industries. Only 61% of hourly workers feel equipped to progress in their roles compared to 74% of salaried employees. 

Without clearly defined pathways, skill-building opportunities, or structured development programs, career growth can feel invisible — leading to attrition not just out of organizations, but out of the industry.

  • Fractured Well-Being and a Growing Mental Load: The stress of doing more with fewer resources is also showing up in well-being data. Only 50% of all healthcare employees say they have access to tools and resources that help them manage stress. When all healthcare employees were asked what would most help them manage burnout, the top three responses were clear: more time off, reduced workload, and more resources.

In many cases, employees are not being asked to do the impossible — they’re already doing it. Without structural relief, the toll on physical, emotional, and psychological health will continue to rise.

  • Declining Trust: Compensation and career growth matter — but when employees don’t trust their leaders to act on their behalf, engagement deteriorates quickly. Only 51% of all healthcare workers believe their senior leaders’ actions align with what they say. With 27% expressing unfavorable views, the message is clear: trust is fraying, and the credibility gap is growing.

What happens if we do nothing: the risks of inaction

The healthcare industry faces a workforce reckoning. The data shows that unless employers act, the impacts will go beyond morale and engagement, directly threatening retention, care quality, and cost sustainability. The cost of inaction will be steep. 

  • Turnover Is a Serious Risk: Across the board, compensation is a clear pain point, but it’s especially acute at the lowest income levels. 60% of all healthcare employees are considering leaving their job due to insufficient pay. Among hourly workers earning less than $15 per hour, that number spikes to 75%.
  • Burnout Is Becoming a Top Concern: Burnout has become the #2 reason healthcare employees would consider leaving their role. Prolonged overload, limited recovery time, and short staffing are pushing people out as fast as pay gaps alone.
  • Engagement Is Faltering: Low engagement is a leading indicator of organizational health. Among lower-wage hourly healthcare employees, only 63% say they are satisfied with their work experience, and just 54% would recommend their employer. These numbers suggest a weakening employer brand — and a rising risk of disengagement.
  • Care Quality Is at Risk: The biggest concern all healthcare workers identified in terms of quality care was staffing. Just 56% believe their organization has enough people to do a quality job, while 26% say the opposite. When caregivers and staff question the basic ability to deliver care safely and effectively, the consequences extend beyond the workforce — to patients, families, and communities.

Five actions employers can take right now

The good news is these issues are solvable. But they do require a deliberate pivot from reactive to proactive strategy — one that places the workforce at the center of operational success. Based on Mercer’s research and consulting expertise, here are five urgent steps organizations can take:

  1. Redesign Role Architecture — Clear, structured career paths matter — especially for hourly and non-licensed roles. Employees need to see how they can grow, what’s required to move forward, and what opportunities exist within their organization. Investing in role clarity is a powerful lever for retention and engagement.
  2. Leverage Data and AI to Improve Staffing — Modern workforce analytics and AI tools can help organizations forecast demand, optimize staffing, reveal diverse benefits needs or preferences, and  reduce scheduling strain. These tools help to create more sustainable workloads and minimizing burnout risk.
  3. Treat People Risk Like Financial Risk — Human capital typically accounts for 50–60% of total operating expenses. Yet, many organizations treat their workforce well-being as a “soft” issue. Embedding people-related risk management into core strategy applies the right focus, and resources, on what is arguably a healthcare organization’s most critical asset.
  4. Challenge the Status Quo — The phrase “we’ve always done it this way” is no longer a valid justification for outdated processes, policies, or mindsets. Innovation in care delivery must be matched by innovation in the employee experience — from flexible work models to new forms of recognition and development.
  5. Listen Continuously and Communicate Constantly — Regular employee listening through surveys, focus groups, and real-time sentiment tools can uncover pain points before they become problems. But listening alone isn’t enough. Communicating proactively with employees can help to ensure they understand and value their benefits, and acting on what employees share builds trust, boosts retention, and creates a culture of shared accountability.

Tradition-bound structures aren’t equipped for the complexity of today’s challenges — and the longer employers delay, the harder the road to recovery becomes. Burnout intensifies. Hiring costs rise. And perhaps most critically, care quality is risked.

A call to act, not react

Healthcare is moving in the wrong direction on too many workforce metrics — and this report shows frontline employees raising the alarm. Hourly and lower-paid workers are telling us, in both words and data, that they’re stretched, unsupported, and losing hope.

That is not a mere staffing issue. It’s a strategic imperative for healthcare. Fortunately, healthcare organizations now have more tools than ever — from workforce data to AI-assisted planning — to build a strategy that works. But the time to use them is now.

Employers must move beyond short-term fixes and take bold, long-term steps to stabilize and strengthen the workforce. That means rethinking pay structures, redesigning career paths, leveraging technology, and building cultures that retain talent through purpose and support.

The challenges are real, but so are the solutions. The only question that remains is: will we act? 

Need help turning insights into action? Connect with Mercer’s experts to explore strategies that drive retention, resilience, and results. Let’s build a stronger, more sustainable healthcare workforce together.

About the author(s)
William Self

Mercer Partner and Workforce Strategy & Analytics Leader

Related Insights

Related Solutions

Related Insights