Finding Solutions to the Eldercare Workforce Crisis

August 2022 brought some positive news for the nursing home industry, which has long struggled with staffing shortages. Despite the challenges exacerbated by the pandemic, the sector welcomed 12,000 new hires during the month. Hedgeye Risk Management, an investment research and financial media firm, interpreted this increase as a turning point for the nursing home labor shortage.

However, there is still a long road ahead for the industry to fully recover. According to data compiled by the American Health Care Association and the National Center for Assisted Living (AHCA/NCAL), between February 2020 and July 2022, over 223,700 nursing home workers left their positions, leaving a workforce of just over 1.3 million “ the lowest number since 1994.

When factoring in residential care facilities, there were over 362,000 fewer workers in the sector compared to pre-pandemic levels, with just over three million workers  the lowest since 2008. This labor shortage has been described as a crisis by industry leaders, with concerns about closures looming. Nearly half of the nation's 14,000 nursing homes are facing severe labor shortages, and 73% of them are worried about shutting down.

The AHCA/NCAL reported that up to 400 nursing homes could close this year due to staffing challenges. Facilities have had to limit admissions, rely on temporary workers, and ask staff to work overtime to meet demand, increasing the risk of burnout and errors. This situation is exemplified by the Evangelical Good Samaritan Society, one of the nation's largest nonprofit senior living care providers, which spent millions on staffing agencies to maintain operations.

Efforts to address the staffing crisis are underway in various states, including New York and Minnesota. These initiatives include funding for hiring and retention bonuses and plans to grow the healthcare workforce by significant percentages over the next few years. The hope is that these measures will help alleviate the strain on the industry and ensure continued quality care for residents in nursing homes.