The cost of nursing labor

Earlier this year, KPMG released their latest U.S. Hospital Nursing Labor Costs report which takes a look at current staffing trends and strategies. For this report, KPMG surveyed 100 hospital executives throughout the United States.

Three of the main findings in regards to the cost of labor are as follows:

  1. Travel nurses have a higher base wage, but a lower all-in cost than employed nurses.
  2. About 10% of an employed nurse’s time is dedicated to non-productive labor.
  3. Turnover of employed nurses is an expense that is often unaccounted for.

All-in costs

When considering the cost of an employed nurse and a travel nurse, base wages can be an unreliable comparison. According to the data gathered by KPMG, base wages represent 48% of the total cost for a permanent nurse and 80% of the total cost for a travel nurse. So even though a travel nurse’s base wage is higher, the all-in cost will likely end up being lower than that of an employed nurse.

Non-productivity costs

According to the respondents, about 10% of an employed nurse’s time is dedicated things like continuing education, administrative tasks, and paid annual training. This non-productive labor adds up to an extra $7 per nurse per hour or more than $250 per nurse per week. Travelers, on the other hand, don’t usually participate in paid continuing education or training while under contract, so they are unlikely to generate any non-productivity costs.

Employee turnover

The hospital executives surveyed estimated a 13% turnover rate for employed, full-time nurses. Combine that with the 7 weeks it takes to hire a permanent nurse on average, and the costs can add up quickly. According to the report, travel nurses can typically be hired within 2-3 weeks, serving as a quick, cost-effective solution.


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