COMP NEWS – Healthcare organizations are in a tight race to secure executive talent in leadership positions, according to a new survey. As a result, healthcare systems are willing to pay more for executive talent.

Healthcare organizations are vying to find talented executives at a time when there is high demand.

“The market for executive talent is extremely competitive,” says Bruce Greenblatt, executive workforce practice leader at SullivanCotter, a consulting firm that examines compensation in healthcare and nonprofit organizations.

This year, healthcare executives received a 4.1% increase in compensation on average, according to SullivanCotter’s annual report on executive compensation, which was released last week. That’s down from 4.3% in 2022.

Among hospital and health system executives, the median increase in their salaries was 4.8% in 2023.

But as many health systems continue to struggle, executives also received less in bonuses and other incentives. The total cash compensation, which includes incentives, rose by 3.5% in 2023, according to SullivanCotter, which surveyed 3,000 organizations.

“Incentive payouts were actually lower coming into 2023 than they were a year ago,” Greenblatt tells Chief Healthcare Executive®.

Many health systems continue to see modest or weak operating margins, a trend that’s expected to continue into 2024. Hospitals are generally faring somewhat better than in 2022, when more than half of all organizations had negative margins, but some systems have seen a slow recovery.

“Organizations are balancing what’s a very competitive talent market with the realities of the performance environment overall,” Greenblatt says.

As leadership positions reach higher demand, hospitals are willing to pay more upfront rather than entice with conditional bonuses.

Certain leadership positions are in particularly high demand, Greenblatt says. Hospitals and health systems are seeking executives in operations positions, health equity and population health, he says. Chief quality officers and patient safety leaders are also in high demand.

“We have seen increases in demand for a lot of jobs that are mission critical, as organizations are now in a sort of post-pandemic operating mode,” he says.

Health systems are also anxious to find leaders in digital roles, from expanding digital health options to cybersecurity positions. Health systems have had difficulty attracting and keeping talent in cybersecurity, since those roles are in high demand and other sectors often offer better pay.

Those executive positions in particularly high demand are also seeing higher salary increases than other roles, Greenblatt says.

Some healthcare organizations are also increasingly willing to recruit executives from other industries for roles in cybersecurity, as well as finance, human resources and marketing.

To read more about executive salaries and bonuses in healthcare, click here.

For more Comp News, see our recent posts.