The workforce management landscape in 2025 told a story of both challenge and transformation. Healthcare organizations spent over 50% of their budgets on labor costs while facing unprecedented staffing shortages, according to Redesign Health analysis. Education wasn't far behind, with 1 in 8 teaching positions either vacant or filled by uncertified educators, reports the Learning Policy Institute. Yet amid these challenges, innovative solutions emerged that are reshaping how organizations approach workforce strategy.
Here's what we learned at HWL, and what it means for 2026.
Healthcare's Critical Shortages
The numbers: Between 46,000 and 86,000 physician positions remain unfilled, with projections showing 187,000 shortfalls by 2037. Over 78,000 full-time RN positions sit empty, with forecasts warning of up to 500,000 unfilled nursing positions nationwide.
The aging workforce compounds these challenges. Over 50% of RNs are over age 50, and nearly 40% of physicians will be 65 or older within the next decade. Healthcare needs 200,000 new nurses annually just to keep pace with demand.
The costs: Healthcare organizations spent $1.7 billion on travel nurses in 2024, with replacement costs exceeding $60,000 per RN.
Education's Teacher Crisis
In 2025, 411,549 teaching positions were either vacant or improperly filled, affecting over 6 million students nationwide. Replacing a teacher costs between $12,000 and $25,000, with special education and STEM positions hit hardest.
What's Driving These Shortages
Several interconnected factors are driving workforce shortages across both sectors.
Burnout Reaches Crisis Levels
Nearly 50% of physicians report experiencing burnout, with 1 in 5 experiencing depression. K-12 teachers have the highest burnout rate of all U.S. industries, with 44% feeling burned out "always.” Unsafe staffing ratios accelerate this burnout cycle, and 84% of teachers report insufficient time during work hours for fundamental tasks.
Compensation Gaps Widen
Teachers earn 26.4% less per year than other professionals with similar education levels, with only 15% reporting satisfaction with their pay. In healthcare, compensation isn't keeping pace with dramatically increased workloads.
Working Conditions Deteriorate
Excessive administrative burdens, lack of autonomy over schedules, and insufficient resources create environments where talented professionals struggle to thrive. The administrative load has become particularly overwhelming, pulling time and energy away from core work with patients and students.
Pipeline Problems Persist
With over one-third of nurses reaching retirement age in the next 10 to 15 years, the replacement pipeline cannot keep pace. Training capacity limitations and declining enrollment in educator preparation programs further constrain the supply of new professionals entering these fields.
Technology Solutions That Delivered
Over two-thirds of travel nurses are now hired through MSP or VMS technology. HWL's VMS platform supports custom workflows with robust business intelligence that provides exceptional visibility into workforce operations, enabling health systems and school districts to make data-driven decisions about contingent labor management.
Innovative Strategies That Worked
Healthcare
Internal resource pools delivered results. 40% of hospitals achieved RN vacancy rates under 7.5% in 2024, up from 12% in 2023, by leveraging internal float pools and flexible staffing models.
Academic partnerships strengthened pipelines. Strategic nursing school partnerships and residency programs are supporting new graduates and building sustainable talent pipelines.
Education
Alternative pathways opened doors. Paraprofessional-to-teacher pipelines and accelerated certification programs addressed critical shortages. Florida saw a 17.7% reduction in teaching vacancies through these initiatives.
Retention initiatives proved their value. Mentorship programs, career advancement pathways, and loan forgiveness proved both effective and more cost-efficient than constant recruitment cycles.
Looking Ahead: What 2026 Holds
Healthcare staffing revenues declined 6% in 2025, but market stabilization is emerging. Organizations that strengthened their workforce structure last year are well-positioned to benefit from on improved conditions in 2026.
Where the Biggest Staffing Gaps Will Hit
The Bureau of Labor Statistics projects these high-growth areas through 2034:
- Nurse practitioners, midwives, and nurse anesthetists: 35% growth
- Physician assistants: 20% growth
- Registered nurses: 5% growth
Financial Pressures Intensify the Urgency
Workforce challenges are colliding with significant financial pressures:
- Healthcare spent $1.7 billion on travel nurses in 2024
- 82% of healthcare leaders expect costs to increase at least 15% in the next six months
- RN salaries are growing 26.6% faster than inflation
Workforce strategy is now a financial survival issue.
Organizations that reduce reliance on expensive external labor while maintaining care quality will gain a substantial competitive advantage.
Key Trends to Watch in 2026
- Strategic planning replaces crisis management. The reactive pandemic approach is giving way to proactive, data-driven workforce strategy that anticipates needs before they become critical.
- Technology sophistication accelerates. VMS and MSP platforms are integrating seamlessly with HR systems, while predictive analytics help organizations anticipate staffing needs before gaps emerge.
- Hybrid models become standard. Leading organizations are optimizing their mix of core staff, internal float pools, and strategic external contingent labor to maximize flexibility and cost efficiency.
- Data analytics drive decision-making. Real-time visibility into workforce metrics enables proactive planning instead of reactive scrambling, positioning organizations to stay ahead of challenges.
What This Means for You
For Healthcare Systems
- Audit your workforce technology. If you're managing contingent labor through email and spreadsheets, you're leaving significant cost savings on the table.
- Build internal resources. Organizations with internal float pools realize 15-25% cost savings compared to external agencies while improving quality and continuity of care.
- Embrace predictive analytics. Understanding your staffing needs 6, 12, and 18 months in advance prevents costly last-minute gaps and enables strategic planning.
For School Districts
- Control contingent labor costs. With federal relief funds expiring, implementing a unified workforce management approach can reduce labor costs.
- Build alternative talent pipelines. Partner with community colleges and develop innovative teacher development programs to address certification gaps.
- Plan strategically for budget constraints. With declining fund balances projected, identify where strategic workforce investments will yield the highest returns.
The Path Forward
The workforce challenges of 2025 are significant but solvable. Organizations leveraging technology platforms and data-driven strategies are already seeing measurable results in fill rates, cost reduction, and operational efficiency.
The winners in 2026 will view workforce management as a competitive advantage rather than an operational issye. When everyone faces staffing shortages, excellence in recruiting, retaining, and optimizing talent becomes the differentiator.
The time to act is now. While the market is stabilizing, the advantage belongs to organizations that built robust workforce infrastructure during 2025's challenges.
About HWL
HWL empowers healthcare and education organizations to transform workforce challenges into competitive advantages through customizable technology and advisory-based solutions. Our comprehensive suite includes VMS technology platforms, managed service programs (MSP), Local InSourced Flex Teams (LIFT), advisory services, and support for building internal resource pools.
The results speak for themselves: improved fill rates, reduced costs, enhanced compliance, and the real-time visibility leaders need to make informed decisions.
With over a decade of experience helping hundreds of healthcare systems nationwide achieve workforce optimization, we're now bringing proven solutions to the education sector.
Ready to transform your workforce strategy in 2026?
Sources
- Redesign Health. "Navigating the Healthcare Workforce Crisis: A Call for Innovation in Workforce Optimization." 2024. https://www.redesignhealth.com/insights/navigating-the-healthcare-workforce-crisis-a-call-for-innovation-in-workforce-optimization
- Learning Policy Institute. "An Overview of Teacher Shortages: 2025." October 2025. https://learningpolicyinstitute.org/product/overview-teacher-shortages-2025-factsheet
- Learning Policy Institute. "State Teacher Shortages 2025 Update: Teaching Positions Left Vacant or Filled by Teachers Without Full Certification." July 2025. https://learningpolicyinstitute.org/product/state-teacher-shortages-vacancy-resource-tool-2025
- U.S. Bureau of Labor Statistics. "Employment Projections 2024-2034." August 2025. https://www.bls.gov/news.release/pdf/ecopro.pdf
- U.S. Bureau of Labor Statistics. "Healthcare Occupations: Occupational Outlook Handbook." 2024. https://www.bls.gov/ooh/healthcare/home.htm
- Health Resources and Services Administration (HRSA). "Health Workforce Projections." Referenced in Journal of General Internal Medicine, May 2025. https://link.springer.com/article/10.1007/s11606-025-09575-7
- Association of American Medical Colleges (AAMC). "AAMC Report Reinforces Mounting Physician Shortage." February 2025. https://www.aamc.org/news/press-releases/aamc-report-reinforces-mounting-physician-shortage
- R1 RCM. "Healthcare's Biggest Challenge: Keeping up With Rising Labor and Operating Costs." October 2025. https://www.r1rcm.com/articles/healthcares-biggest-challenge-keeping-up-with-rising-labor-and-operating-costs/
- Learning Policy Institute. "Addressing Teacher Shortages: Insights From Four States." March 2025. https://learningpolicyinstitute.org/blog/addressing-teacher-shortages-insights-four-states
- Learning Policy Institute. "Teacher Shortages by Subjects Across States." July 2025. https://learningpolicyinstitute.org/product/teacher-shortages-subjects-across-states-factsheet
- American Medical Association. "Doctor Shortages Are Here—and They'll Get Worse if We Don't Act Fast." April 2022. https://www.ama-assn.org/practice-management/sustainability/doctor-shortages-are-here-and-they-ll-get-worse-if-we-don-t-act
- AAG Health. "The 81 Most Shocking Healthcare Staffing Statistics of 2025." 2025. https://www.aag.health/post/healthcare-staffing-statistics
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- Moody's Ratings. "School District Financial Analysis." 2025. https://www.moodys.com
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