By Debra Wood, RN, contributor
October 29, 2010 - Few people have escaped the financial consequences of the country’s current economic woes—including nurses. Many had long thought the profession bulletproof, since people continue to become ill or injured, but health care employers have felt the pinch of declining margins with little capacity to raise salaries.
Richard Hader, Ph.D, NE-BC, RN, CHE, CPHQ, FAAN, reports nurse leaders’ salaries have decreased, a likely effect of the economy and supply and demand.
One recent survey in the journal Nursing Management found a nearly $4,000 decline in nurse leaders’ salaries as compared to three years ago.
“There has been a misperception that nursing was insulated from what was happening in the economy,” said author Richard Hader, Ph.D., NE-BC, RN, CHE, CPHQ, FAAN, the journal’s editor-in-chief. “We haven’t been affected as much as other industries in terms of layoffs and so forth, but revenues continue to dwindle in hospitals throughout the country.”
Hader said many hospitals are losing money, and good facilities are making 3 percent to 3.5 percent margins.
“That’s where salaries have gotten stuck,” Hader said. “Salaries are either condensed, frozen or other benefits are being taken away.”
The survey found a nurse leader’s average salary is $80,170, compared to $83,930 in 2007. But the decreases did not happen across the board. Nurses working as chief executive officers or chief operating officers saw a jump in salary from $95,000 to $132,600, administrators an increase from $78,600 to $93,520. However, the “other title” category saw a significant decrease, from $84,510 to $73,230. Nearly 20 percent of respondents had “niche” titles, including certified nurse midwife, clinical applications specialist, clinical informatics leader, clinical nurse leader, electronic medical record specialist, and human simulation and research leader.
“Consultants showed an increase, which isn’t surprising,” Hader said, explaining that rather than hiring, health systems may bring in a consultant.
Average salary by work setting produced some interesting results with subacute care and home health experiencing some increases, while academia reported a significant decrease from $93,020 to $70,080 annually.
Hader explains that subacute facilities have been admitting more acutely ill patients, necessitating the need for more experienced nurse leaders and have had to pay more to attract seasoned nurses to the setting.
Nurses with more education earn more compensation, with doctorally prepared nurses earning an average annual salary of $96,620, more than $20,000 a year more than nurses with a bachelor’s degree. Yet, Hader said, fewer nurses are pursing advanced degrees with hospitals offering less tuition reimbursement.
“Education opens more doors for higher paying positions,” Hader said.
This is the first time Nursing Management surveys have found a decline in salaries. Almost 60 percent of surveyed leaders felt that they weren't appropriately compensated for their level of responsibility within their organization. However, many of them said they felt privileged to be working in the down economy. Hader said that currently there is limited demand for nurses, with people staying in their positions longer.
“The belt has definitely gotten tighter,” Hader said. “Nurse leaders’ salaries have remained frozen because staff nurses’ salaries have remained frozen.”
Greg Zoch, a partner, managing director and nursing practice-leader for Kaye/Bassman International, an executive search firm in Dallas, reported not seeing reductions in nurse leaders’ salaries.
“Quite the contrary, there is competition for experienced and effective nursing leaders,” Zoch said. “Retiring baby boomers, many of whom are in leadership positions, are adding to a shortfall of qualified nursing leaders needed to fill the already-significant vacancies nationwide. Supply-demand dynamics still hold sway in this economy.”
Zoch raised questions about the survey and if the same nurses were surveyed or if the more recent respondents were merely a lower paid group.
Hader acknowledges that different people answer the survey every year, and that could be a factor in the different salaries. However, he added, percentages of salary increases have declined from the mid-3 percent to the mid-2 percent range.
“We probably had more younger people and turnover,” Hader said. “Combined with that, the percentages of raises are lower.”
The U.S. Bureau of Labor Statistics reports a mean annual wage for the country’s 2.5 million registered nurses in May 2009 at $66,530, with nurses employed in hospitals earning the most and those in nursing homes the least. The government statistics indicate an increase in the mean annual wage from $65,130 in May 2008 and $62,480 in May 2007.
However, a 2010 readers’ survey by Advance for Nurses published in March reported salaries for nurses remained flat. In 2010, annual salaries ranged from $29,350 in Iowa to $86,786 in California. The article cited low vacancy rates as a contributing factor to the stable pay rates. The Advance survey found that 51 percent of nurses reported some benefits had been reduced or eliminated, with 49 percent indicating there had been no change.
The Web site Indeed.com, a search engine for jobs, reported a steady decline in RN salaries from October 2008 until July 2010 and is now noting a slight upturn. It found the average RN salary on October 22, 2010, was $72,000, with RN travel nurses earning the most at $97,000 annually.
“Everybody is feeling the economic pinch,” Hader said. “We all have to use good financial stewardship and embrace the concept of evidence-based care and appropriately medically manage our patients.”
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