The True Cost of Healthcare Staffing: What Facilities Really Pay?

When a nurse leaves, you still need someone to care for their patients while you look for a replacement. That often means asking your team to work extra shifts and finding time in your own day to review applications. The vacancy is already costing you money, even though you haven’t hired anyone yet.

It’s easy to focus on wages and agency fees because those figures are right in front of you. But the staffing cost in healthcare also includes overtime, training time, and the expense of starting again when a new hire leaves. Looking at those costs together helps you see where your budget is going and what you could do differently next time.

The Direct Costs of Hiring in Healthcare

Understanding where the direct hiring costs come from will help give you a clearer picture of what each new hire can cost your healthcare facility.

Advertising, Interviews and Onboarding

Job advertising, recruiter time, interview coordination, background checks, and onboarding all add to your hiring bill. Even after someone accepts the job, you’re still paying to get them ready. When a colleague spends a morning showing a new nurse your procedures, for example, you pay both employees for that time. Training materials and any paid orientation sessions belong in your records as well.

Healthcare Checks and Credentials

Healthcare hiring also involves credentialing, license verification, and compliance checks. Your team might need to chase a missing certificate or contact the organization that issued it before the person can start.

Specialized roles take longer to fill when fewer applicants have the required qualifications and experience. If you’re hiring for intensive care, for example, a nursing license alone won’t tell you whether someone has the experience the role needs. Finding that person can mean more recruitment hours and longer-running job adverts.

Internal Hiring Costs

Your internal hiring costs include compliance paperwork, administration, recruiter training, hiring manager and recruiter salaries. With salaries, you’re counting the hours spent hiring, rather than adding someone’s whole salary to the bill.

So if your manager interviews six applicants and none joins the team, those interview hours still cost your facility money.

External Hiring Costs

Then there are the businesses you pay to help with recruitment. External costs include background checks, pre-screening, job board and social media marketing, agency fees, and recruiting technology such as applicant tracking systems. You might pay a screening service provider to check an applicant’s employment history, while a software subscription helps your team organize applications.

Our guide to candidate background checks further explains the process.

Calculating Cost Per Hire

Once you’ve gathered those figures, you can work out your cost per hire: the average amount you spend recruiting one employee. Choose a period, such as a quarter, add its internal and external hiring costs, and divide by the number of people hired in that same period:

Cost per hire = (internal hiring costs + external hiring costs) ÷ number of hires.

For example, $24,000 spent on six hires gives you a cost per hire of $4,000. Our cost-per-hire guide takes you through the calculation in more detail.

The calculation is most useful when you keep the method consistent. If you record onboarding separately, keep that separate when comparing quarters. You’ll have a clearer view of recruitment spending, although you’ll still need to look at what happened while the role was empty.

The Hidden Costs of Hiring in Healthcare

While you’re working through applications, your facility still has patients to see and shifts to fill. This is where a vacancy can create expenses that don’t appear in your recruitment budget.

Overtime Coverage

Overtime coverage often means asking existing staff to absorb the vacancy. An extra weekend might be manageable, but repeated requests can leave people tired and frustrated. As your overtime bill rises, morale can suffer too, especially if the same employees keep giving up their time off to fill the gap.

Productivity Loss

Productivity loss is another cost to allow for, because new clinicians may need months to reach full productivity. An experienced nurse may know the clinical work well but still need help with your records system or daily routines. While they’re learning, they might see fewer patients or need a colleague alongside them for some tasks.

Turnover Risk

Think about what happens when someone joins and then leaves because the weekend work wasn’t clear during hiring. You’re back to advertising and interviewing, with another new employee to train when the search ends. In the meantime, you still need someone on those empty shifts. That’s how one poor-fit hire can leave you paying for much of the same work again.

Leadership Time

Leadership time matters because managers spend time on interviews and onboarding instead of strategic work, such as planning future staffing needs. Along with meeting applicants, your manager may arrange orientation, check progress, and answer a new employee’s questions. Those are paid hours, so include them in the relevant recruitment or onboarding costs. It’s also worth looking at the work that had to wait.

If your manager is too busy to investigate a recurring roster problem, you may keep paying overtime until they can deal with it. Their hiring hours and that extra overtime are two separate costs; count each once.

Patient Care Impact

Staffing changes can disrupt scheduling, throughout, and continuity of care. You might have to move appointments, admit fewer patients, etc. Depending on how your facility receives payment, seeing fewer patients may mean less income. For patients, it can mean waiting longer or having to explain their needs to another doctor or clinician.

What Drives Healthcare Staffing Costs Up?

Healthcare staffing costs rise for two main reasons: factors your facility can influence and factors that are outside its control. Understanding these categories helps you see where changes to your hiring plans may limit spending and where you need to budget for wider market pressures.

Factors That Can Be Influenced by the Facility

• Lead time: Needing someone tomorrow leaves you little time to compare applicants or rates. You may end up paying a rush fee or a higher agency rate, or asking your current team to work overtime. When you know leave is coming, starting earlier gives you more time to weigh those choices.
• Specialty: Narrower roles are more expensive when you have fewer suitable candidates to choose from. You may need to offer higher pay to attract someone with the required skills, and a longer search means continuing to pay for adverts and help with unfilled shifts.
• Shift type: Nights, weekends, holidays, and split shifts can carry premiums, meaning extra pay above the usual rate. With fewer people willing to work those hours, you may need that extra pay to attract applicants. Otherwise, you could be filling the same shifts through overtime.
• Location: A rural or small market may give you fewer local candidates, so travel, accommodation, or relocation support can become part of the hiring expense. In a competitive urban market, nearby employers may push wages up. You can’t usually change where your facility is, but you can give yourself more time to search and reach people further away.

Factors Largely Outside Facility Control

• Market shortage: Fewer qualified candidates means higher rates when employers compete for the same workers. If nearby facilities raise their offers, you may need to review yours as well. Agency rates can rise for the same reason, adding to the cost of bringing in help.
• Seasonality: Vacations, flu season, and holidays can spike demand for extra staff. You may have more patients arriving just as employees take planned leave. Finding help becomes harder, which can leave you paying more overtime or higher temporary staffing rates.
• Agency-specific cost drivers: Agency fees typically build in recruitment, credentialing, and compliance, turnover-related backfilling, specialty demand, and geography. You’re paying for the work involved in finding people, checking them, and arranging replacements when needed. A harder search or a role requiring scarce skills can increase that work, while location may add travel costs. Those expenses feed into the rate your facility pays.

The Health Resources and Services Administration projects registered nurse shortages of 11% in nonmetropolitan areas and 2% in metropolitan areas by 2038. These are forecasts rather than today’s unfilled jobs, but they show why the hiring pressure you face may differ from that of a facility elsewhere.

How to Reduce Healthcare Staffing Costs

To reduce the staffing cost in healthcare, start with the expenses that keep coming back. The American Hospital Association reported that labour made up 56% of hospital costs in 2024, so staffing decisions affect a substantial part of a hospital’s budget. Your own opportunities to save will depend on what’s causing the extra spending.

Better Planning and Operations

Before you publish the roster, look at planned leave, open roles, and periods when you expect more patients. If one department keeps using overtime, find out what’s behind it. Perhaps approval to hire takes several weeks, leaving the team short for longer than necessary. Addressing that delay could save you another round of urgent bookings.

Smarter and a More Flexible Workforce Strategy

You don’t need the same staffing arrangement for every gap. Your regular team can handle the work you expect each week, while temporary or per-diem staff, who work as needed, may help with shorter absences. Training suitable employees to move safely between departments gives you another option. Compare the rates, training time, and overtime involved before choosing an approach.

It’s useful to look at the work itself, too. If nurses spend part of each day booking visits or requesting documents, could administrative staff take on those tasks? That may give clinicians more time for patients, while clinical decisions remain with qualified clinicians.

Clear Expectations and Useful Onboarding

Be clear about hours, duties, and weekend work before an applicant accepts. Once they join, give them time to learn your systems and someone they can turn to with questions. Regular check-ins can help you notice difficulties before the employee is left struggling on their own.

For newly qualified nurses, a residency program provides further training and guidance as they begin work. It involves more support than an introduction to your facility’s routines, which matters when you look at research about these programs.

AHRQ’s Nursing and Patient Safety review reports that 91.5% of nurses in a residency program stayed after one year in 2018, compared with a national figure of 82.5% for nurses without residency training. That comparison doesn’t prove the program caused the difference, and it doesn’t mean a short orientation would give you the same result.

For your facility, the practical question is where new staff need more help. Budget for that support, then track early departures and what you spend hiring replacements. Over time, those records can help you judge whether your approach is helping people stay.

How a Healthcare Staffing Agency Can Help

When vacancies keep adding to your workload and overtime bill, a healthcare staffing agency can provide practical support with finding and screening candidates. Here is how that help connects to the hidden costs discussed earlier.

• Recruiting support: An agency can search for applicants, review applications, and carry out initial screening. That reduces the leadership time your managers spend sorting through unsuitable candidates and arranging unnecessary interviews. They have more time to support the current team and plan for future staffing needs.
• Access to a talent pool: An agency may already know candidates with the qualifications and experience you need. That can shorten the search and help you fill a vacancy sooner. A shorter gap may mean fewer extra shifts for your existing team, reducing overtime costs and pressure on morale.
• Matching candidates to the role: Explain the clinical skills, duties, hours, and systems involved so the agency can assess whether applicants suit the job. Someone with relevant experience may need less guidance on clinical tasks, which can limit lost productivity and reduce the time colleagues spend helping them. Clear expectations may also reduce poor-fit hires and repeated onboarding. You’ll still need to teach each new employee your local procedures.

Conclusion

The staffing cost in healthcare is an operational and financial risk because it affects your budget and the work your team can get done. It deserves attention beyond HR. Start with one role that stays empty or keeps generating overtime, and look at what you’ve spent on hiring and extra wages.

Then consider the work that had to wait, taking care to count each expense once.

Contact De Vore Recruiting to discuss the role you’re struggling to fill and the recruitment support your facility needs.