Hey everyone! Welcome to the Truth About Travel Nursing Podcast. My name is Kyle Schmidt and I am your host, and this is episode 21 of the podcast. In this episode, we’re going to discuss how the hot travel nursing job market we’re currently experiencing alters the status-quo and we’re going to provide some tips to help travel nurses deal with this unique environment. [Please note that this is a transcript of a podcast episode. As such, grammar and spelling are not optimized for written content.]
Now, in case you’re questioning whether or not we’re in the midst of a very hot travel nursing job market, let’s take a quick look at a couple of indicators. First, let’s take a look at the stock prices of the two largest travel nurse staffing companies. The largest is AMN Healthcare Services, better known as American Mobile. In January of 2012, the stock was hovering around $4 a share. It worked its way up to $15 a share by January of 2014, which is a nearly 400% gain.
Now, I don’t know if you pay attention to the stock market, but a 370% gain in 2 years is absolutely huge. I mean, successful mutual funds are looking at annual gains of 20%. Well, American mobile dropped a bit to around $11 a share by May of 2014….do you want to guess what the stock is at now?
If you guessed $20 a share, which would be a 500% gain, you’d still be way short. The stock is currently trading at around $30 a share. That’s a nearly 750% increase in just over three years! Investors are very optimistic about this stock.
Now, it’s also important to note that AMN’s quarterly revenue has increased from $143 million in March of 2010, to over $320 million in March of 2015. So, the company has grown immensely, some of which was through acquisitions, but a large portion of which was the result of the hot employment market.
Okay, so Cross Country’s stock hasn’t fared as well, but the stock is up from roughly $4 a share in 2012 to over $13 a share today. Again this is an over 300% return, which is huge. And their quarterly revenues are up from $100 million to over $180 million during the same period.
On top of this type of information, we also have studies and reports indicating that travel nursing is really hot right now. For example, a recent article on USA Today.com ran with the headline, “Demand for travel nurses hits a 20 year high.” The headline was essentially drawn from a discussion that the publication had with an analyst from Avondale Partners, which is an investment company that tracks the industry.
Meanwhile, the research company Staffing Industry Analysts reported that they expect the demand for travel nurses to increase by 10% by the end of 2015. 10% doesn’t sound like much, but it’s actually huge when it comes to staffing experienced, skilled, licensed professionals like registered nurses. Additionally, Susan Salka, who Is the CEO of AMN healthcare was quoted as saying that orders for travel nurses at their client hospitals had doubled or even tripled in recent years.
So, we really are looking at quite a boom in travel nursing and travel healthcare in general. For me, the first question to ask is why? Why is this boom happening? It’s an important question because it will give us an idea of how sustainable the hot market is…how long will it last?
Well, according to the research I’ve read, increased demand is being driven by two factors. First, the unemployment rate has decreased significantly in the last several years. It’s gone down from a high of over 10% to just above 5%. As more people return to work, they obtain medical benefits and/or the financial wherewithal to seek medical attention, so demand for healthcare professionals overall tends to rise.
The second factor that research cites as being responsible for the increased demand is the Affordable Care Act. As far as the number of newly insured created by the health law, I’ve seen estimates ranging from 6 million on the low end to 15 million on the high end.
So, there are really two issues at play here, the improving economy and the healthcare law, which would mean that demand could continue to increase and that the hot market could be with us for a at least a little while.
Okay, so with that in mind, let’s take a look at the affect that the hot market has on those of us working within it. I mean, it certainly creates some unique circumstances and considerations and we need to be adaptable to ensure that we make the most of a good thing.
Now, I’m sure that some of you are still saying, what hot market? Some of you still don’t believe the market is all that hot despite the information that we just discussed. And you may have good cause to feel that way if you’re having difficulty finding a travel nursing job in one particular location at one particular time.
And this is the first thing we need to know about the hot travel nursing job market. Just because it’s hot doesn’t mean that every hospital needs a travel nurse for every specialty all the time. In fact, there are going to be regional variations, just like there are with the any nursing shortage, or with any hot job market. Some regions are going to be hotter than others. Some regions won’t experience increased demand at all. But overall, there is much higher demand.
The point is that you can still run into the same difficulties finding the right job, in the right location, at the right time. However, it’ll still be much easier to land jobs and find really good jobs as long as you maintain some level of flexibility.
That said, the same recommendations still apply if you’re looking to work in a specific location. As we’ve discussed several times on the podcast, working with multiple agencies to ensure that you’re getting maximum exposure to the job market is still the best way to go. If you’re looking for a particular location, then be sure to do your research to find agencies that have assignments in that particular location. And try to find the combination of agencies that get you access to all the hospitals in your chosen destinations.
Okay, so the next thing to consider is the effect that the hot job market has on bill rates. Again, bill rates are the hourly rates that agencies are able to charge for your time at the hospital. Bill rates are important because pay packages are based on them. So the amount of money the agency can offer you depends on the bill rate for the assignment in question.
This is hugely important for travel nurses. That is, there is potential to earn much more money in a hot market. Bill rates can increase significantly. For example, I’ve had several recruiters and staffing agency owners comment to me that they’re seeing bill rates as high as $100 to $120 per hour. And that bill rates between $75 and $90 are much more common in markets like California. Compare that to the $65 average during the downturn and we’re looking at major differences.
So, that should be amazing for travel nurses, right?! Well, only if you make sure to drive a hard bargain. In other words, you have to negotiate hard during a hot market and this is the next factor for us to consider when it comes to a hot travel nursing job market. In fact, this might be the most important factor for travel nurses to consider during the hot job market. Negotiating becomes much more strategic during a hot market and here is why.
During the normal market, bill rates have a strong tendency to hover around an average based on the area and the specialty. The average tends to be low enough that agencies can’t really get away with taking higher profit margins because if they did, the pay packages would just be too low to be attractive. Moreover, there are fewer jobs in the market, so things get more competitive and agencies really have to put their best rates out there to keep up with their competition.
This all changes in a hot market. First off, there are a lot more job orders out there. And while agencies hire more recruiters to meet the demand, the simple fact of the matter is the overall market does get a little less competitive on a job-by-job basis between agencies.
Meanwhile, you’re used to working for a certain pay rate. You’re used to working for the normal pay rates, based on the normal bill rates. But the difference between the normal rate and these increased rates is so large that there is a lot of room for the agency to impress you with an attractive rate, but not their best rate.
For example let’s say that the agency offered you $35 per hour taxable, plus $8 per hour for M&IE, plus $14 per hour for lodging, and a $700 travel stipend. That would be a really attractive pay package during normal times. And it’s actually a really attractive pay package right now! I mean, that comes out to a total blended rate of about $59 per hour if we’re talking about a 36 hour per week contract.
Compare that to the average $45 per hour blended rate and we’re looking at a great contract. But if this was a contract with a $100 or $120 bill rate, then this $59 an hour offer would still be too low. And that’s the thing you have to watch out for.
Now I know it’s really easy to say that companies that would do anything other than give you their best possible rate are shady, or that they’re ripping you off. I hate to say it, but that’s just not the case. In our economy, compensation negotiations take place whenever a worker is in demand. I mean, look, I know that in an ideal dream world, all employers would just crunch all the numbers for us and show us every last detail behind what went into our pay and how much revenue we generate and how much they make off of us and then give us the best compensation package possible. But that doesn’t happen in any industry, so we shouldn’t expect it to happen in travel healthcare.
Again, the fact that negotiating is required is a sign that you have a solid profession. You know who doesn’t get to negotiate? Newly hired burger flippers, room service candidates, Walmart candidates and others don’t get to negotiate. I hate to sound harsh and no offense to folks in those roles, those are fine respectable, roles, but every professional that’s in demand needs to negotiate their pay package. This is just as true for the permanent employment market as it is for the travel market.
You know, another way to look at it is that the increased bill rates are just as much an incentive for the staffing agency as they are for the travel healthcare professional. I mean, if you’re a recruiter and you’re looking at 1,000 open job orders, how do you decide which ones to target…which ones to spend your time on? Well, one way is by going after the highest bill rates. They’ll be easier to sell, you could potentially get higher profit margins, and even if you don’t you’ll be generating more revenue.
The main point is that negotiating becomes key in a hot job market like this. It’s imperative to have a firm grasp on negotiating principles and tactics in order to get the most out of this market. Now, we’re not going to go in to all that in detail here, because negotiating is an episode all its own. But, we do have a free eBook on how to negotiate the best travel healthcare compensation packages that has been very well received by travelers and recruiters alike. Epstein LaRue from Highway Hypodermics reviewed it and said, “Don’t negotiate your next contract without it.” The eBook has over 70 pages of basics, methods and tips. It’s based on our experience negotiating over 500 travel healthcare compensation packages and our approach is based on peer reviewed research.
All you have to do is sign up for our email list and like or share one of our blog posts via social media. You can go to blog.bluepipes.com/negotiate to get a copy and we’ll include that link in the show notes.
Okay, so just to reiterate, negotiating is really important during a hot job market because the difference between the average pay rates, which you were willing to work for before, and the potential pay rates in the hot job market…that difference is so large that there is a lot of wiggle room in there. So you want to make every effort to ensure that you aren’t leaving money on the table.
All that said, I don’t want you to think that you should be expecting a screaming deal on every assignment. This is another thing we have to remember about a hot market. I’m willing to wager that a majority of assignments are still paying average rates or rates that are just slightly higher than average.
Along the same lines, some specialties tend to have more increased rates associated with them while other specialties have more assignments with average rates associated with them. So, your specialty matters when it comes to increased rates. For example, L&D, PICU, NICU, ICU, and ER tend to have higher occurrences of increased rates, while MedSurg, PSYCH and others tend to have lower occurrences.
That said, this is another difficult aspect of negotiating during a hot job market. I mean, it would be a lot easier if all the jobs had increased rates…at least then you’d be able to maintain a standard expectation. Unfortunately, you really won’t know what to expect in a lot of cases. In regard to negotiating though, I will say that this is one reason it’s so important to work with multiple agencies. Having alternatives is one of the most fundamental tactics to increase your leverage and determine whether or not you’re getting a good deal. Don’t ever be afraid to get compensation quotes from multiple companies for the same job.
Okay, so the next set of factors we want to look at all affect the way that you conduct your job search. As a traveler, you’re typically on assignment for 13 weeks at a time, so you’re searching for jobs much more often than usual. You also have to travel to get to each new job. The point I’m getting at here is that there can be down time in between assignments, and down time costs money.
This is one of things that can really catch travelers off guard by the end of the year. At the end of the year, you might look at your annual pay amount and wonder why it was so low given the fact that you seemed to be making better money. Well, if you took a week off between each assignment just to get there and then took a couple of weeks of vacation, you could have taken 6 weeks off without pay. If there was an extra week or two in there where you were waiting for your next assignment to start, then you could have even missed even more time. It adds up fast.
So, in a normal job market, I always recommend staying on top of this and ensuring that your assignments are lined up as early as possible. In fact, I even recommend not passing on jobs over trivial pay amounts like 2 or 3 dollars per hour. I mean, missing one week of work costs more than 2 to 3 dollars per hour.
But during a hot job market, you can push the envelope a little more. Why? Well, for starters, jobs tend to stay open a little longer when the job market is hot. In the staffing industry it’s referred to as time-to-fill…so, the time-to-fill increases when the market is hot. You don’t necessarily need to jump on the first job that comes your way or that meets your needs. Of course, if it’s a great job, then by all means, jump away, but you could pass on jobs with a little less risk, both because they stay open longer and because there are more job openings anyway.
Why would you want to do that? Well, one reason is that you could potentially hold out for high paying assignments by waiting to the last minute. In general, high paying assignments typically want someone there quickly, within a week or two. So if you’re not finding the high paying assignments early in the process, then you can roll the dice to wait until the last minute. Again, there is still plenty of risk that this backfires on you, and you end up missing weeks of work, but the risk is much less given that there are more jobs open than normal.
Now, at the other end of the spectrum, it’s also more likely that you’re able to secure assignments earlier than usual during a normal job market. There are a couple of reasons for this. First, some hospitals realize that it’s more difficult to get their jobs filled, so they simply release them earlier. Under normal circumstances, hospitals prefer to wait to the last second because there is more clarity with respect to their census in the short term and therefore their staffing needs.
Second, hospitals are more apt to allow travelers to start later than the hospital’s desired start date. Again, because the time-to-fill is longer than usual, hospitals have an incentive to lock down a traveler when one comes their way…it’s kind of like a bird in the hand is worth two in a bush. They’re worried that if they pass on a traveler just because the start date isn’t perfect that they might end up waiting much longer anyway.
Okay, so that’s how the hot job market can potentially impact your job search. The next several factors I want to discuss all have to do with the increased leverage that travel healthcare professionals have when the job market is hot. You know how sometimes you hear people say it’s a buyer’s market or a seller’s market when they talk about the housing market. Well, when the travel nursing job market is hot, it’s travel nurse’s market…not the other way around.
So, there are several things to consider. First, you should expect agencies to provide a higher level of service when the job market is hot. Simply put, there are more recruiters competing for fewer nurses per job opening. So they should be providing world-class service to win your business. Remember, the majority of hospitals work with more than one agency, so you can typically get any job through more than one agency. Even when an agency has an exclusive contract, they’ll typically sub-contract with other agencies to get the jobs filled. This happens more so during hot job markets.
So what kind of service are we talking about? Well, the onboarding paperwork is one example. There are plenty of companies and recruiters that will make it easy for you by not requiring that you fill out their online application and skills checklists just to apply for a job. Plenty of agencies and recruiters will fill these documents out for you as long as you provide them with a resume and skills checklist. In fact, many agencies will simply accept your bluepipes resume, application and skills checklist.
Now, there are many other examples of how agencies can provide world class service. For example, they can fix paycheck errors immediately. They can go the extra mile to help ensure your weekly time cards are received in time and reviewed to ensure that you get paid on time. And there are many other things they can do, so you should hold them to a higher standard during a hot market.
Second, it’s also possible that hospitals are willing to be a little more flexible with their needs as well. The float policies might become more lenient, they might be willing to approve time off or other scheduling requests a little more readily. As I mentioned earlier, they might be a little more flexible with their start dates. So, don’t be afraid to explore the possibilities.
Finally, you might even have more leverage when it comes to negotiating bill rates. Typically, it’s pretty uncommon for a hospital to approve an increased bill rate after they’ve released a job because they know that they’ll be able to fill the job. But in a hot job market, they might be a little more open to upping the bill rate if asked to do so.
In the negotiation eBook I discussed earlier, one of the tactics we describe is to ask your recruiter about the travel nursing jobs that have been open the longest. If you’re interested in any of those jobs, then find out what the rate is…chances are that it will be pretty average, otherwise it wouldn’t still be open. Then let the recruiter know that you would be interested in the job if it had a higher rate…you’ll need to provide them with that rate, whatever it is.
They should be able to work backwards to determine what the bill rate would have to be in order to pay the rate you need. Then, they can have their account manager contact the hospital to see if they can work it out. Some agencies will be open to this and others won’t, but it’s always worth a shot. Of course, you should be prepared to accept the assignment if the hospital agrees to the bill rate increase. And it’s always best for the account manager to present the hospital with your completed submission profile when pitching them on the deal, so be sure that’s ready to go as well.
Okay, so the final topics I want to discuss in this episode are things to watch out for. First, be sure not to extend too much at the same hospital or take contracts in the same location for too long. Remember, your tax home will shift and you’ll be responsible for paying taxes on all that tax-free money you’ve earned. Please listen to episode x on travel nursing tax issues to find out how long it’s okay to stay in one location. This is going to vary based on your unique circumstances.
The reason I bring this up here is that it’s more common for travelers to fall into this trap when the market is hot. There tends to be more extension offers and there if there aren’t extension offers, then there are more job opportunities in the area. If it’s a desirable area, then it can be tempting to stay for a while, so just be careful.
Next, watch out for Independent contractor jobs. These tend to pop up much more often during hot job markets because there are a lot of fly-by-night agencies that pop up who don’t really know what they’re doing. I know these independent contracting jobs sound tempting, but they’re a really bad idea. First, registered nurses don’t meet the requirements to be independent contractors. They don’t set their own schedules and they work under supervision. Moreover, the taxes are a nightmare and nurses often find that they’re actually earning less at the end of the day. So, watch out for those jobs and be sure to avoid them.
Okay, so I really hope that this information is useful in helping you get as much as possible out of the hot travel nursing job market for as long as it lasts. There really is a lot of opportunity out there right now. We certainly covered a lot of information on this topic and as always we’ll have everything up on the show notes page, the transcription as well as links to things we discussed. You can find the show notes at blog.bluepipes.com/episode21. While you’re there, be sure to join BluePipes for free and take advantage of the networking and documentation management tools designed to help you simplify your travel nursing career.
If you’ve been enjoying this podcast, then please provide us with a rating on whatever platform you’re using to listen on, whether it be stitcher or iTunes it really does go a long way to get the word out so more travelers can benefit from the information and we can keep the show going.
Also, you can connect with us on facebook at facebook.com/bluepipesinc and twitter @bluepipesinc.
Thank you so much for listening to the podcast, we really do appreciate it. Oh, and before I forget, I just want to let you know that I’ll be out for a couple of weeks for a vacation in Egypt. Should be an awesome trip! Pyramids, the red sea and all that stuff. So, our next podcast will come out the last week of July. Again, thank you so much for listening in and until next time, have a safe and prosperous travel healthcare adventure.
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Episode 18: Travel Nursing Taxes
Finding Travel Nursing Companies that Work in Your Desired Destinations
The post TTATN 021: Tips For The Hot Travel Nursing Job Market appeared first on BluePipes Blog.