The just-released SIA report shows that healthcare staffing revenues are expected to decline by about 6% year-over-year in 2025, to ~$39.4 billion. But there’s a silver lining: signs point toward stabilization, and modest improvement is projected in 2026.
As we at HWL reflect on this outlook, it reinforces both the challenges ahead and the opportunities for meaningful change. Here’s our take—and what HWL is doing (and can do) to help healthcare organizations navigate this period effectively.
Key Takeaways From the Forecast
Before getting into solutions, a few parts of the forecast are especially relevant:
- Decreasing staffing revenue in 2025, reflecting staffing demand softening, cost pressures, possibly overreliance on temporary/travel staffing.
- Modest improvement in 2026—but the improvement won’t be dramatic. We’re looking at a gradual rebound rather than a sharp surge.
- Rising wages, albeit modest: base pay for healthcare staff is expected to increase more in 2025 vs. 2024 (e.g. 4.3%) as shortage pressures persist in key roles.
- Shifting demand mix: Some specialties, regions, and staff types will continue to be in deficit even while others stabilize. Skill sets like nursing, allied health, physician support, etc., will see uneven pressures.
All of this suggests that healthcare organizations should brace for tight margins, shifting workforce needs, and continued focus on optimizing efficiency and retaining staff.
What HWL Is Doing — & What Healthcare Organizations Should Do
Given that landscape, here’s how HWL sees its role and what actions we believe can make a difference:
1. Data-Driven Forecasting & Demand Planning
One reason revenue is dropping is because many providers are caught off-guard by demand shifts—patient volume, service mix, reimbursement changes, etc.
HWL leverages predictive analytics to help health systems anticipate where staffing shortfalls or surpluses will occur. For example, forecasting patient flows by department (ER, ICU, clinic) or by region, so that staffing can be adjusted proactively.
2. Flexible Staffing Models
The traditional dichotomy — permanent staff vs. expensive locum/travel contracts — is straining budgets. HWL is working with clients to build blended models:
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- Internal float pools or “shared staff” across sites
- Flexible scheduling (per-diem, partial-remote for certain clinical/admin roles)
- Onboarding pipelines that allow some staff to move between clinical settings as demand shifts
These models help reduce over-dependence on costly temporary staff while still having agility.
3. Retention & Workforce Well-Being
Any stabilization will be fragile unless we address the root causes of turnover: burnout, administrative burden, misaligned incentives. HWL is investing in tools and programs that improve staff experience: better scheduling software, feedback mechanisms, support for continuing education, and upstream staffing of roles like nurse aides and support staff so more skilled staff can focus on higher-value care.
4. Cost Optimization Without Compromising Quality
With expected revenue declines, healthcare providers will need to be sharper in controlling costs. HWL helps by:
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- Conducting staffing audits to identify inefficiencies: e.g., over-staffing in low demand shifts, under-utilized roles.
- Leveraging technology (scheduling, assignment, credentialing) to reduce redundant administrative work.
- Helping negotiate or structure contracts with staffing agencies so that cost per shift is more predictable, and quality standards are maintained.
5. Talent Pipeline & Training Partnerships
Long-term stability requires a steady pipeline of healthcare workers. HWL sees opportunity in partnering with educational institutions, offering apprenticeship or training programs, and facilitating accelerated credentialing where possible. These help ensure that roles in highest demand get filled and reduce reliance on external contractors.
6. Scenario Planning & Risk Mitigation
Because forecasts are modest (not upside heavy), organizations need to plan for multiple possible futures: worse budget cuts, regulatory changes, or sudden surges (e.g. pandemics, disasters). HWL supports scenario planning (what if volumes drop more than expected? or reimbursement shifts unfavorably?) so that providers can have contingency staffing and financial plans.
How HWL’s Approach Uniquely Aligns With the Forecast
- Integrated Visibility: Unlike many firms that address only agency staffing or only internal schedule tools, HWL's platform (or consultancy) integrates staffing, scheduling, credentialing and forecasting. That gives clients end-to-end visibility and avoids “blind spots” where costs hide or inefficiencies accumulate.
- Scalable Flexibility: HWL’s models are built to scale up or down. If 2025 ends up softer than forecast, or there is a regional spike, providers using HWL can more nimbly adjust staffing levels, shift resources, or redeploy staff without starting from scratch.
- Focus on Quality & Staff Retention: Improved wage trends are necessary but not sufficient. Turnover is costly. HWL prioritizes staff satisfaction, reasonable workloads, and supportive workplace culture, which helps reduce burnout and associated costs.
- Cost & Outcome Alignment: Many healthcare organizations are increasingly held to outcome metrics, patient satisfaction, readmission rates, etc. HWL helps align staffing strategy not just on minimizing costs but optimizing for outcomes—ensuring the right staff with the right skills are on the floor.
Looking Forward: What to Watch & What to Do Now
As we look into the rest of 2025 and toward 2026, here are some practical steps for healthcare leaders:
- Audit your staffing spend now, especially on temporary/travel staff. Understand where the biggest cost pressures are.
- Run multiple scenarios: moderate downturn, worst case, and best case. What happens to your bottom line and patient outcomes under each?
- Invest in technology (forecasting tools, schedule optimization, credential tracking) even in lean times, because these tend to pay off when margins are tight.
- Partner upstream with training programs, leadership development, and support roles, so that growth in demand can be met with home-grown talent rather than expensive contract hiring.
- Focus on retention: If revenue drops, cutting costs via layoffs or wage freezes may seem tempting, but the downstream costs (turnover, recruiting, training new staff) often outweigh short-term savings.
Final Thoughts
The SIA forecast is a reality check. Yes, 2025 will be a challenging year for healthcare staffing. But stabilization followed by modest improvement in 2026 offers a strategic opening. For organizations that move proactively, the coming period is less about survival and more about transformation—rethinking staffing models, investing in retention, adopting smarter tools, and aligning cost, quality, and worker well-being.
At HWL, our mission is to partner with healthcare organizations through this transition—to help them emerge not just stable, but stronger, more efficient, and more resilient. Because in the end, delivering excellent patient care depends on a workforce that is supported, well-planned, and appropriately deployed.