By Neal England
HRM Practice Leader
A majority of nurses surveyed in late 2019 said the nursing shortage has worsened, a continuing challenge that will produce a ready pipeline of business opportunities for staffing companies placing nurses.
A survey of 20,000 registered nurses in the U.S. by AMN Healthcare Services Inc. found that 52% of nurses in late 2019 said the nurse shortage has worsened, compared to 48% in 2017 and 37% in 2015.
Perhaps it is fitting then, that in honor of the 200th birth anniversary of Florence Nightingale, the World Health Organization (WHO) designated 2020 as the “Year of the Nurse and Midwife.” WHO said it will focus on several core goals, including increased investment into the nurse workforce.
In a nod toward the increasing shortage of nursing talent, a 2020 appropriations act passed by Congress in late 2019 will provide nearly $260 million for the Title VIII Nursing Workforce Development Programs in fiscal 2020, a $10.5 million increase over FY 2019 levels.
The nursing talent shortage is only expected to intensify in the coming years as baby boomers age and as significant numbers of RNs reach retirement age. The Health Resources and Services Administration, a federal agency, projects over 1 million RNs will reach retirement age within 10 to 15 years.
Registered nursing is listed among the top occupations in terms of job growth through 2026, according to the Bureau of Labor Statistics. The RN workforce, now about 3 million, is expected to grow by 12% by 2028 — a much higher rate than the average growth rate of 5% for all occupations.
A mid-2019 survey by staffing agency Avant Healthcare Professionals found that 34% of respondents were using staffing agencies to fill vacant nursing positions. More healthcare executives were also open to recruitment through staffing agencies. The survey results showed an 8% increase in hospitals relying on staffing agencies to recruit nurses in 2019 over 2018. The use of travel nurses also rose by 7% in 2019.
In terms of nursing staffing M&A, the space was moderately active last year and should be ripe in 2020 for new players, capital infusions and consolidations.
Last year’s M&A activity included the acquisition of Progressive Nursing Staffers by FlexRN, a Stafford, Virginia-based nursing staffing firm. The firms provide RNs and LPNs on a per diem, contractual and permanent placement basis in Washington, D.C., Maryland and Virginia.
The private equity firm Olympus Partners also announced in late 2019 that it had agreed to acquire Soliant Health from Adecco Group. Atlanta-based Soliant provides therapists, nurses and clinicians to K-12 schools. It also provides travel nurses and other clinicians to the life sciences market.
We expect M&A activity to continue in the nurse staffing segment caused by attractive growth opportunities driven by a combination of expanding demand for talent and tightening supply of nurse skill sets across a wide scope of specializations.
Capital Alliance’s human resources practice will be keeping a close eye on the nursing staffing sector as the year progresses. Watch for additional updates on our blog.
Capital Alliance Corporation is a Dallas-based investment banking firm with a four-decade history and deep operational and M&A experience across many sectors, including human resource management, upstream energy and energy infrastructure, among others. Capital Alliance is affiliated with Oaklins International, the world’s most experienced mid-market M&A advisor, with 800 professionals globally and dedicated industry teams in 40 countries worldwide. We have closed over 1,500 transactions in the past five years.