Hospital labor trends in 2025 show slower hiring but continued workforce growth

High profile layoffs were dwarfed by new hires in 2025 at hospitals, as organizations positioned for coming turmoil.

Hospitals added 163,000 positions in 2025 to reach 5,804,200 positions, seasonally adjusted, by December, according to the Bureau of Labor Statistics (BLS). Hospital hiring averaged 13,600 personnel each month.

That hiring pace was the fastest among various healthcare segments but was a slowdown from 2024, when hospitals had 212,000 hires and averaged 17,700 each month, according to BLS.

But the new hires far eclipsed terminations, which have grabbed headlines this year as hospitals braced for reduced Medicaid revenue stemming from a new law. For example, a running tracker by Becker’s Hospital Review for 2025 details publicly announced layoffs of about 18,900 total staff across 93 hospitals and health systems.

The disconnect between layoffs and continued aggressive hiring reflects organization-specific shifting priorities in response to market forces and coming revenue changes. Forces driving divergent labor decisions include:

• Coming cuts under the One Big Beautiful Bill Act
• Increasing deployment of AI to take on staff tasks
• Financial pressure to respond to changing patient demographics/demand

New approaches

Nuanced efforts to nimbly respond to various cross pressures was seen last week when Trinity Health announced a 10.5% cut in revenue cycle jobs across 15 states. However, the organization also recently launched a $60.5 million expansion of an existing emergency department at its hospital near Ann Arbor, Michigan.

In its FY25 earnings report, the system stated, “action to reduce administrative burden” included spending $50.4 million that year “primarily for severance and termination benefits.” However, the system still incurred $13.6 billion in labor costs — up from $12.9 billion in FY24.

“This is always a balancing act of the skill sets they need and where you need them, whether that be service line or skill perspective, location specific,” said Jon List, a senior partner in financial transformation for Chartis. “I mean demographics are changing, what are the patients and consumer you’re looking for is changing, So, rebalancing that always is a factor in that churn of staff.”

One change noted by Bobby Singh, managing director of healthcare performance improvement for Huron, was that many of the 2025 layoff announcements were focused on administrative and leadership — reflecting a trend he’s seen in client health systems.

“There’s definitely been a pretty significant uptick in everyone looking at their sort of coaches and players and asking themselves, ‘Are we a little bit too [top] heavy, do we need as many leaders or can we get closer to the work?’” Singh said. “And [they’re] starting to ask, ‘Is an executive, assistant vice president, a director, a manager and three supervisors really necessary?’”

That changed labor focus came amid recent findings that, since the pandemic, a large and widening share of hospital spending has gone to administrative functions over direct patient care.

Looking ahead

For 2026, industry advisers expect the increasing focus on finding efficiencies in administrative roles to increase.

One way that will happen is through increased deployment of AI technology that health systems have moved to acquire but not yet optimized for their organizations.

“The revenue cycle has been an area that’s been most able to capitalize at this point on the AI technologies and efficiencies, just given the transactional nature” of the work, said Singh. “We’ve seen a lot of health systems move in that direction — using those technologies to improve workflows, to reduce tasks that are there.”

Then organizations may redeploy those staff whose jobs were automated to other roles within the revenue cycle.

Advisors expect an aggressive expansion of AI utilization in 2026.

Unionization

Also, a growing challenge hospitals and health systems likely will grapple with in 2026 is an increasing staff unionization push.

Hospitals “just need to be on the lookout and see what’s happening around them and keep their eyes open for the potential [union activity] because — especially in that Northeast corridor — there’s going to be increased activity,” said Joe Brock, president of Reliant Labor Consultants.

This year kicked off with the high-profile strike of 15,000 nurses from several New York City hospitals.

Officials at one of those hospitals, Montefiore Medical Center, told FastFinance that the nurses’ demand for a 40% wage increase and other benefits will cost $3.6 billion over the three-year contract. The increase would raise the average nurse base salary from $165,000 to $220,000.

The hospital reported a -1.8% operating margin in Q3 2025 and its parent, the Montefiore Health System, reported a -1.6% operating margin. At the time, the system stated, “the loss of FEMA reimbursements and continued expense growth, including heightened personnel costs across our labor contracts, were primary drivers of the losses.”

The union activity trend continued in January when 31,000 staff from Kaiser Permanente hospitals and other sites rejected a 21.5% raise as part of a new contract and threatened to walk off the job starting Jan. 26. 

Changed approaches

Despite the massive dollar amounts involved, Brock said, “These things aren’t about money.” Both strikes and unionization efforts stem from hospitals’ failure to engage with staff to hear and address concerns, which are usually about nonmonetary issues, like insufficient staffing or schedule flexibility.

“If they want to keep that union out, [then] they come to the conclusion that it’s good business to increase that work-life balance and the direct relationship that they have with their employees,” said Brock, who advises hospitals on labor issues. “So many hospitals that I get involved with don’t care about that.”

Conversely, growing financial pressures have led some organizations to increase their appetite for taking on initiatives that initially may risk unionization or upset their existing unions.

“They’re willing to go to battle now because they don’t have a choice,” Singh said. “We know there could be union activity, but they’re willing to face it and have that discussion with the unions and saying, ‘Let’s talk about this; here’s the challenges we’re facing.’”

He’s seen some success with that approach, such as the case of a health system engaging with its union to lower nurse staffing ratios but still meet the levels required by the union.

“There were threats around ‘We’re going to unionize’ or ‘We’re going to picket’ and [then] nothing honestly happened,” Singh said. “They had that discussion, and everybody got what they needed but we saw really good success there.”