The Healthcare Gig Economy: The Rise of Temp Work

Technology has helped temping become more attractive, but is it all its cracked up to be?

The gig economy has upended industries, turning traditional work models on their heads. Uber and Airbnb are prime examples. A new technology (smart phones + software) leveraged unused resources (cars and homes) to create additional income opportunities with low barriers of entry. Now the gig economy has come to healthcare. The unused resource is labor, but healthcare workers are not just using this technology to pick up additional shifts for extra cash; they’re opting to move from full-time to part-time employment, or to leave employment entirely, to become permanent temp workers.

What changed?

Temp work has been around for decades, traditionally facilitated by staffing agencies. A healthcare worker might sign up with an agency while they were between jobs or to pick up some extra hours. It was difficult for a worker to create a full or consistent schedule, so the lack of guaranteed income incentivized them to continue looking for gainful employment. Temp staffing was a sleepy industry.

Then, two things happened to create a perfect storm.

First, brick and mortar staffing agencies found competition from software companies. CareRev, Nomad Health, GoTu, and others created platforms that drastically improved the experience for both job posters and seekers. Workers could evaluate a job’s commute, hours, and pay like they were swiping left and right on a dating app. The gains in transparency and ease of use were undeniable, but these companies were still operating in a two-sided market. They needed to attract a large talent pool and a large number of employers to make the business model work.

Then COVID happened.

A lot of healthcare personnel left their chosen professions in 2020 (source). What would become a multi-year staffing shortage stressed an already stressed remaining workforce. Employers were desperate to quickly backfill empty positions and burned out employees were open to exploring other options. Suddenly, the sleepy temp staffing industry became the most popular kid in school.

We don’t have solid data on the size of healthcare gig economy, but Staffing Industry Analysts reports the market for travel nurses grew by 340% between 2020 to 2022 (source). There have been new entrants, acquisitions, and millions of dollars injected into the temp work platform space. Just Google the topic and click “News” under the Search Bar and you’ll get a sense of the action.

Pros and Cons

It’s early days in the new healthcare gig economy, but we can already see some benefits and challenges.

Temp workers are paid more… right?

The hourly pay for temps is generally higher because companies want to attract a pool of workers and desperate employers were willing to pay. For example, the 2023 average hourly rate for employed dental hygienists was $42.08 (source) versus $47.50 for a temp (source). However the higher dollar per hour may not be what it seems. Temp workers should be classified as 1099s and will therefore have to pay their own taxes. They’ll also lose out on benefits like a 401k or health insurance.

There are also reports that the transparency of requested versus offered wage actually drives down gig pay (source). This would make sense if there were more workers than positions available.

Flexible schedules

This has been a big win for workers for whom work-life balance has been a foreign concept. Providers appreciate the ability to almost fully customize a weekly schedule, especially if they are juggling child care and other responsibilities.

Cost savings or added expense?

By hiring professionals as needed, facilities can staff up or down without committing to full-time salaries and benefits. Some employers are celebrating. Bergen New Bridge Medical Center recently announced expansion of its strategic partnership with CareRev (source). But other groups are less enthusiastic, claiming that their regular employees are leaving or reducing hours for the allure of temp work.

Quality of care

The transient nature of gig work can mean professionals are less acquainted with specific facility protocols and technology, possibly affecting patient care quality. Healthcare services that are provided over multiple days/sessions can also be adversely impacted with a change in continuity of care.

Closing Thoughts

I believe the current winners of the healthcare gig economy are the providers. Veterinarians, nurses, dental hygienists, and others can use these new software platforms to shop their highly skilled labor around for the highest bidder. A few extra bucks per shift and almost total control of what hours they work is quite alluring. And as more providers opt to choose this way of like over full-time employment, there will be even more demand for temp workers to fill the gap.

But this game of musical chairs won’t last forever. Provider shortfalls are expected to recover in the years ahead (source), and we’ll be able to watch the supply and demand curves start to flip in real time on these platforms.