The Real Cost of Hiring a Nurse in 2024

Understanding the costs of employing nurses can be complicated so let’s break down these costs together. We understand just how important it is to have every shift covered at your medical facility. Therefore, healthcare facilities must also take proper steps in understanding and recognizing the costs associated with hiring a healthcare professional. When it comes to staffing nurses,  the costs go beyond just their hourly wages. We also recognize that nurses are invaluable to the healthcare industry and their contributions do not go without notice. So let’s delve into the breakdown of these expenditures and uncover the real costs of hiring a nurse. 

Hourly rate vs Employer’s rate

Often, the hourly rate of a nurse is dictated by union standards. In theory, the hourly rate set for a nurse and the cost of employment to the healthcare institution should be the same, but in practice, they are two very different price tags. According to union wage standards, an experienced part-time nurse's hourly rate is $56.85. Part-time nurses work 20 hours a week, 50 weeks a year, amassing approximately 1000 working hours, with anything above that considered overtime. The cost that a healthcare facility ends up paying is significantly higher - approximately $96.20 per hour. Are you impressed or shocked?  

Factors Contributing to the Real Cost

Are you asking yourself why there is such a discrepancy between the two costs? Without overcomplicating, let’s do some simple math together:

Don’t worry, we are going to go over all of these numbers together. Let's discuss the contributing factors:

1. Benefits and Overhead (30% of hourly rate = $16.80) In addition to the base wage, healthcare facilities are responsible for providing benefits and covering overhead costs, which amount to approximately 30% of the hourly rate. This rate is not added to the hourly wage of the part-time nurse but to the employer’s costs.

2. Hiring and Turnover Costs (($5,000 + $10,000) / 1000hrs) The process of hiring a new nurse involves costs beyond their hourly wage, approximately $5,000 to onboard a new nurse. Additionally, the turnover rate in every industry, for various reasons, adds costs. Turnover over costs in the healthcare industry are approximately $10,000 per nurse.

3. Overtime (( $84 x 100) / 1,000hrs) Nurses often work beyond their regular shifts, a trend observed especially during COVID. The overtime rate for nurses is time and a half, $84/hr. The average overtime per week is an additional 2 hours, totalling 100 hours of overtime work per year. 

Putting it into Perspective

Does the equation make sense now? Let's crunch the numbers based on a part-time nurse working 20 hours per week for 50 weeks a year. Factoring in the aforementioned components, the total cost per hour shoots up to approximately $96.20.

A Smarter Solution

With healthcare budgets under relentless pressure, finding cost-effective solutions is imperative. While the expenses associated with employing nurses may seem daunting, there are alternatives to explore. For instance, leveraging platforms like Staffy can offer a more economical approach. By tapping into a pool of skilled RN contractors, healthcare facilities can mitigate costs without compromising on quality. We understand that healthcare facilities are in a constant shortage of qualified healthcare staff, and budgets are tight. But did you know that the average cost to the healthcare facility for an RN is only $62.60 an hour when using the Staffy app? So, the next time you consider the cost of employing a nurse, remember: it's not just about the numbers on paper – it's about investing in the backbone of healthcare.

Find out more on how to get your shifts covered at your healthcare facility today. Download the Staffy app today on the Apple store or on the Google Play store to get started!