If you’re like most hospitals, you’re wrestling with an urgent staffing shortage. In addition to competitive compensation, you most likely offer a relocation allowance to attract candidates from afar. But while you undoubtedly benchmark compensation, do you know how your hospital relocation allowance compares to the industry average?
With everything else going on in healthcare right now, this isn’t a subject you hear about very often. But in light of the current battle for talent, it really is an important one. If you want to attract quality talent, you need to be competitive across the board.
Relocation Allowances by the Numbers
According to Merritt Hawkins’ 2021 Review of Physician and Advanced Practitioner Recruiting Incentives, 74% of the nearly 2,500 U.S. healthcare organizations studied offered a relocation allowance in 2020-2021.
For physicians, the average relocation allowance was $10,634. For nurse practitioners and physician assistants, the average was $8,363. While the highs and lows were wide-ranging, this should give you some idea where you stand.
To provide some context, we went back nearly a decade to an earlier edition of the same report, and discovered some interesting findings.
In 2012-2013, the average relocation allowance was $9,555 for physicians and $6,904 for nurse practitioners and physician assistants.
In other words, over the last eight years, the relocation allowance for physicians increased by 11.21%—less than 1-1/2% per year. Nurse practitioners and physician assistants—positions which have grown increasingly in-demand—fared better, reaping a relocation allowance increase of 21.13%.
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Flying Under the Radar
Now, here’s where things get really interesting. For more context, we also looked at compensation averages, based on these same reports.
In 2020-2021, the average annual compensation for practitioners of family medicine—one of the most in-demand specialties—averaged $243,000, compared to $199,000 in 2012/2013. That’s a 22.11% increase.
For nurse practitioners, in 2020-2021, annual compensation averaged $140,000, compared to 106,000 in 2012/2013—a 32.08% increase.
Think about that for a minute. While the physicians’ average compensation increased by more than 22%, their average relocation allowance increased just over 11%.
And while nurse practitioners’ average compensation increased by more than 32%, the average relocation allowance has increased by just over 21%
In other words: while most hospitals are careful to keep compensation competitive, relocation allowances aren’t on their radar. So, even though they’re eager to recruit healthcare professionals nationwide, most aren’t thinking about what their relocation offerings look like to non-local candidates.
The big takeaway: savvy hospitals that are focused on recruiting have a real opportunity to differentiate themselves by crafting superior relocation offerings. Their competitors just aren’t paying attention.
Inconvenient Fact: Even the Biggest Relocation Allowance Isn't Enough
One more thing: if you want to offer a competitive relocation package, even the most generous allowance won’t be enough by itself. Unless you also offer relocation services, you’re still creating massive headaches for relocating new hires, who will need to handle every detail of their move by themselves.
That’s why most other industries - especially where recruiting is fierce, like technology - have moved beyond offering a mere relocation allowance to providing full-throttled, time-saving, headache-sparing relocation benefits.
In addition to providing funds, modern relocation benefits also offer employees:
- Helpful resources, including pre-screened movers and realtors
- Technological tools, including an online portal packed with information and shortcuts
- People-driven services—specifically experience relocation specialists who are there to help
By upgrading from a hospital relocation allowance to employee-friendly relocation benefits, you can lift that burden off the shoulders of your incoming healthcare professionals—who, let’s face it, have bigger fish to fry.
At the same time, you give your talent acquisition team a massive competitive edge. You’re demonstrating that you’re a great organization to work for - that you value and actively take care of your people.
But here’s the best part: when you do it right, you actually save money, while cutting all that reimbursement-related red tape your HR people face.
It’s always good to know what the average is. But why settle for being “average” when it’s easy to be so much more?
