Like climate change, we’ve been watching the looming shortage in the nursing labor market from a long way off. It’s well documented, and we’ve written about it here at tekMountain many times before (here, here, here and here). Like climate change, the situation will become worse before it gets better. Unlike climate change, the shortfall is not an extinction event. It’s something we can fix. To do that, we must understand it well.
Five Reasons for the Coming Shortage
- Baby Boomers retiring en masse.
- The aging American population needs more access to healthcare services.
- Greater access to healthcare services due to the Affordable Care Act.
- More nurse practitioners.
- The number of people with nursing licenses who don’t work as nurses.
Each of these reasons is freighted with nuance and implications. So in the coming weeks, we’ll take a closer look at each one. In this first of the series, we’ll parse out some of the major themes in how the historic wave of Baby Boomer retirement, already in progress, will contribute to the nursing shortage.
Twilight of the Baby Boomers
Baby Boomers are traditionally understood to be those people born between the years 1946 and 1964. That means, if we take 65 to be an average retirement age (more on that in a moment), the oldest began retiring in 2011, and the wave will continue through 2030. The rate of retirement is prodigious:
There were 76 million Baby Boomers. Calculated over a 19-year period, that’s 4 million people retiring yearly, or nearly 11,000 people a day.
That number is complicated by a number of variables: early death, immigrants increasing the number of Boomers, and people taking retirement at different ages. But the principle remains: As nurses retire, we’ll need new nurses to replace them, and in greater numbers than before to accommodate the number of retirees needing medical care.
According to the Center on Education and the Workforce, currently “people over 65 account for 12 percent of the population but use up 26 percent of doctor office visits.” That percentage will balloon as the Boomer retirement wave crests. According to the CEW, 200,000 nursing jobs are projected to be unfilled by 2020.
The most senior nurses in the industry today will be part of the great Baby Boomer retirement wave. Many of those are nursing faculty, whose retirement will exacerbate the existing bottleneck in nursing-school enrollment. We’ve written about this before as well, noting contributing factors, in addition to age, such as low compensation and dissatisfaction due to the heavy workload.
Nature—and economies—abhor a vacuum.
The Bureau of Labor Statistics predicts that “healthcare support occupations and healthcare practitioners and technical occupations are projected to be among the fastest growing occupational groups during the 2016–26 projections decade. These two occupational groups—which account for 14 of the 30 fastest growing occupations from 2016 to 2026—are projected to contribute about one-fifth of all new jobs by 2026. Factors such as the aging baby-boom population, longer life expectancies, and growing rates of chronic conditions will drive continued demand for healthcare services.”
In fact, among the top 11 categories of greatest growth in new jobs in this period, health care ranks high:
Employment in the health care and social assistance sector is projected to add nearly 4.0 million jobs by 2026, about one-third of all new jobs. The share of health care and social assistance employment is projected to increase from 12.2 percent in 2016 to 13.8 percent in 2026, becoming the largest major sector in 2026. (BLS Employment Projections: 2016-26 Summary)Source: BLS Occupational Outlook Handbook
This need for well-trained nurses and qualified nurse faculty is a supply-chain issue of the first magnitude. tekMountain, one of America’s leading entrepreneurial and innovation centers, is closely monitoring the trends and opportunities for innovators, investors and entrepreneurs of every stripe. If understanding the opportunities that lie before us is important to creating your own business climate, contact us today to see what synergies we can create together.