For about two years during and after the pandemic, healthcare workforce shortages were the kind of story you couldn’t avoid. Stories about unsafe staffing ratios in hospitals, about nurses leaving faster than recruiting could keep up, about travel-nurse agencies billing some health systems hundreds of millions a year. Then the story largely stopped being a story. Coverage moved on, the crisis language eased, and most of the visible signs of acute stress in the system began to fade.
Reading the numbers now, you can see why the noise quieted. Hospital turnover has come down from its 2021 peak of nearly 26% to 18%, the lowest point in five years. The travel nurse market has cooled. Most large health systems have brought their contract labor spend back toward something close to pre-pandemic levels. Read together, the numbers describe a system that’s healing.
A four-year study we put together (450 hospitals, around 844,000 workers, fifteen allied health roles tracked from 2023 to 2026) lets us look underneath the aggregate. The picture there is much narrower than the headline suggests.
Read the full study here: The Cost of Allied Health Turnover, 2023–2026.
If you’re not deep in this world, “allied health” is the umbrella term for the broad clinical workforce that works alongside physicians and registered nurses. The roles range from certified nursing assistants (CNAs) who help patients with daily care, to phlebotomists who draw blood, medical assistants in outpatient clinics, lab technicians running diagnostic tests, radiologic and MRI (magnetic resonance imaging) technologists handling the imaging, surgical techs in operating rooms, respiratory therapists, sonographers, pharmacy technicians, and more. Together they make up the majority of staff in most hospitals and clinics, and in a typical hospital stay, the people a patient spends the most face-to-face time with are almost always in an allied health role rather than a doctor or RN (registered nurse).
Where the churn is still happening
Look beneath that recovery headline and the picture narrows quickly. CNAs are still churning at 36 to 42% a year, high enough that a typical hospital effectively replaces its entire CNA workforce every three years. Skilled nursing facilities, where most long-term care happens, sit at around 82%. And while turnover among first-year staff is finally easing across the board, the cohort that’s now getting worse is people in their second year. Staff who already finished training, settled into the role, and are leaving anyway.
That detail should sit uncomfortably with anyone whose job involves developing people. First-year turnover is a problem the field has gotten better at solving over the past decade; structured nurse residency programs have improved noticeably, and roughly four in five hospitals now run one. Second-year turnover is a different conversation, and most systems aren’t really set up for it. It’s the point in someone’s career where structured onboarding has ended and the question becomes whether the next five years look like the last six months. If the answer isn’t visible, they leave.
The cost numbers underneath all of this are doing something strange. The rate of turnover is falling, but the cost of each individual departure has climbed sharply. Replacing one nurse cost about $52,000 a couple of years ago. The most recent figures put it at $61,000, a 17% jump. More importantly, the composition of that cost has shifted in a way that changes what retention is actually buying.
The traditional way of thinking about turnover cost is to picture recruiting expenses: agency fees, advertising, screening, leadership time spent on interviews. That’s still part of the bill. The much larger share now comes from a different place. It’s the period of time when the seat sits empty, plus the period after a replacement starts but before they’re fully productive. When a clinical role goes unfilled, the work doesn’t pause. Overtime absorbs some of it, agency contractors fill in for some more, and a portion of it simply doesn’t happen. Once a replacement does start, six to twelve months is a typical ramp to full productivity, and clinical roles often take longer because credentialing extends the curve. Together, those two windows now account for somewhere between 44% and 83% of the total cost of a single turnover event.
Which means retention has stopped being primarily a recruiting expense and become an operational capacity question instead. And capacity is the place where the problem stops being financial and starts being clinical.
Retention is now showing up in patient outcomes
The bigger reason the cost shift matters is that retention has now started appearing in patient outcomes. The publicly reported CMS (Centers for Medicare & Medicaid Services) star ratings, which influence both Medicare reimbursement and patient choice, drop about 0.3 points for every 10-point increase in nursing facility turnover. Facilities with high turnover see roughly 1.5 times more resident complaints and 1.5 times more abuse citations than their lower-turnover peers. Each 10-point rise in RN turnover correlates with about 36 additional patient falls per year for every thousand daily inpatients. Around a third of clinicians who terminate their contracts early cite unsafe conditions as the reason.
Underneath the operational picture, the pipeline of new workers isn’t catching up to demand and isn’t on track to. Federal projections show coming shortfalls of around 109,000 RNs and 141,000 physicians. The shortage of licensed practical nurses (LPNs) reaches 30% by 2038. More than 37 states are looking at CNA shortfalls by 2028. Some supply lines are actively shrinking; lab technician program completions are down 11% even as demand for the role rises.
Care is also moving out of hospitals faster than the workforce can follow. Demand for home health aides, who do much of the work that used to happen inside skilled nursing facilities, is growing about twice as fast as the supply of people willing to do the job. Outpatient and home-based care settings are now competing with hospitals for the same talent. The hospital turnover number is improving relative to a labor market that is still tightening underneath it.
The most common response to all of this, between 2022 and 2024, was to pay more. Nearly all skilled nursing facilities raised compensation, and most hospitals followed. The research on what happened next is consistent with what the field has long suspected. Compensation increases move the retention curve for about six to twelve months and then fade, unless there’s a career pathway underneath them. What determines whether someone is still in the role years later is that pathway, not the compensation itself.
What's working: pipelines over pay
This is the finding we keep coming back to, because it’s the place where the answer is actually visible in the data. Systems pulling ahead during this cycle have stopped treating workforce as a fill problem and started treating it as a pipeline. Internal training programs are running at roughly half the turnover rate of the workforce overall. Career ladders are reducing turnover by five to eight percentage points, which translates to between $1.4M and $2.3M per hospital per year. HCA Healthcare has brought its contract labor spend from around 10% of total compensation down to 4.3%. CommonSpirit Health has saved roughly $640M doing similar work.
What those programs share isn’t a clever piece of technology or a smarter retention bonus. It’s a decision to make development happen internally — to build the next CNA into an LPN and the radiologic tech into a CT (computed tomography) tech, rather than trying to hire each of those roles from a labor market that doesn’t have them. It’s a workforce strategy that looks more like a learning function than a recruiting one.
The window for doing this work is unusually open at the moment. CMS repealed the federal minimum staffing rule for nursing facilities in December, which removed the regulatory floor some systems had been leaning on. The federal recruitment campaign for the sector just doubled to $200M. Medicaid budget pressure is pushing systems toward training models that cost less than agency labor. The economics are pointing the same direction the evidence has been pointing for years.
The systems that build the pipeline now will set the cost structure that everyone else will still be trying to escape in 2028.
Read more in the full study: The Cost of Allied Health Turnover, 2023–2026.
