2010 Salary Survey Results

Salary 'logjam' breaks, compensation improves although economy does not

Something had to give. After several years of stagnation or even decline in compensation for ED managers, salaries have begun to improve, according to the 2010 ED Management Salary Survey.

Survey responses indicated that only 25% percent of respondents saw no change in their salary, while the 2009 EDM Salary Survey showed 36.96% saw their salaries remain the same. Conversely, while only 2.15% of the respondents in the 2009 EDM Salary Survey said they had received an increase of between 4% and 6%, that figure more than doubled in the 2010 EDM Salary Survey to 5%. Another 5% reported an 11% to 15% increase in 2010, and 5% more said their increases were between 16% and 20%. (See the chart below.)

For the 2010 report, 582 surveys were disseminated. There were 20 total responses, for a response rate of 3.4%.

"Last year everybody pulled back, and finally after another year had gone by they said, 'We have to do something for these people,' so they gave an increase — and that makes sense," says Michael D. Bishop, MD, president and CEO of Unity Physician Group, a Bloomington, IN, firm that staffs hospital EDs in Indiana and Kentucky and owns and operates urgent care centers in Indiana. "The market is still tight to get people. To be perfectly honest, the health care reimbursement business has not changed much in the last couple of years, but hospitals just had to do something."

Mike Williams, MPA/HAS, president of the Abaris Group, a Walnut Creek, CA-based health care consulting firm specializing in emergency services, says "The survey results are almost spot-on with what I'm seeing. I am seeing it largely because of market trends and a demand for capacity."

Sometimes physicians are getting calls asking if they can fill a management position temporarily, Williams says. "In reality, looking at what the market is, you have to either make competitive offers or grow your management team from within, if that's possible," says Williams.

Diana S. Contino, RN, MBA, FAEN, senior manager, Deloitte Consulting, Los Angeles, sees similar trends on the nursing side. "The salary numbers appear to make sense. They follow industry trends," she says, "But let's also look at the staff RN salaries as they relate to the director/managers' compensation. Mean annual salaries for all staff RNs, according to industry national benchmarks, range from $53,000, 25th percentile, to $78,000, 75th percentile."

There are also geographical variations, she points out. California, for example is on the high end for RNs with average annual salaries benchmarked at $85,000 (approximately $42 per hour working 40 hours, 50 weeks per year). Nurse director/manager compensation should be higher than hourly staff RN salaries. Ranges are usually commensurate with that compensation.

"As an example, if a director/manager's compensation is $100,000, the difference between the staff RN — CA 75th percentile of $85,000 — and the director/manager is $7.21 an hour," says Contino. "ED directors/managers have to decide if the added responsibilities are worth the compensation differences."

The survey indicates 75% of the respondents work between 46 to 60 hours per week. (See the chart, below.) "This actually reduces the director/manager's hourly rate to $43 to $33 respectively," Contino notes. Many individuals feel they have a higher quality of life as an hourly staff nurse as opposed to the manager/director's increased workload, she explains, and equal or lower compensation than staff nurses is less than desirable.

"In my experience the organizations with salary ranges 25% to 50% greater than staff have increased success with filling positions and retaining managers," says Contino. She says that work environment also plays into director/manager recruitment and retention strategies.

Most often the higher salaries are commensurate with the local economic pressures, employer financial stability, and span of responsibilities – e.g. multiple departments, volume, complexity of service, adds Contino. "A nurse director/manager making less money may have fewer direct reports, minimal budget responsibilities, and limited 24-hour call responsibilities," she says.

Salary increases were especially evident in the higher ranges, according to the survey. For example, 40% of the respondents said they earned between $100,000 and $129,000, compared with 21.28% in the 2009 survey. And 30% reported salaries of $130,000 or more, compared with 10.64% in 2009. This was matched by a corresponding drop in those earning between $90,000 and $99,000, from 14.89% to 5%, as those managers moved into the higher levels. In the $70,000 to $79,999 and $80,000 to $89,000 ranges, where only 25% of the respondents fell, responses for 2009 and 2010 were nearly identical. (See the chart below.)

"There are a lot of firms out there recruiting nurse managers or specializing in that work because there is high demand, but not as many nurses are available, and that takes a lot more aggressive recruitment and compensation packages," adds Williams. "We've seen a large number over $125,000, but with what I see, you're talking about mature, experienced people with children in high school or college."

As Contino's comments indicate, managers seeking the higher salaries are expected to take on greater responsibility. But, notes Bishop, this is a two-way street.

"On the high end of the spectrum are medical directors and people taking on more responsibilities for both their groups and the hospital," he says, "So the hospital administrators have to come along and say if we want this doctor/manager/administrator/medical director to go to more hospital meetings, meet more with staff, and do less clinically, we have to pay them something because they are not able to see as many patients."

That lost income is often not replaced dollar for dollar, however, Bishop observes. "You are not going to be paid the same for going to staff meetings as one might be able to generate taking care of trauma patients, for instance," he says. Still, hospitals are requiring more of their physician medical directors. "They are looking at more quality assurance, quality improvement efforts, more time working with their group on such things as patient satisfaction and more integration of what's happening within the medical staff as well as within their own staff within the ED," says Bishop.

While they are willing to lay out more money for ED managers, "hospitals are looking for more bang for the buck," echoes Williams. "Long ago it was acceptable for an ED manager to staff the department, keep track of complaints, and manage the challenges of shifts." Now, he says, there are much stronger and more complex expectations in areas such as throughput and customer satisfaction, which do not always have simple answers. "It takes a person who is more system-oriented, actually, a management engineer," he says. "Most hospitals don't have them, so every department head has to be one."

His local ED manager has a master's degree in informatics, says Williams. "You need those skills, or you need to have a valuable partner who does," he notes.

This need is no less true of nurse managers, Williams adds. "There are increased demands to improve customer satisfaction, but no clear roadmap on how to get there," says Williams. "It takes a nurse manager who can not only look at overall scores but sub-scores, and determine what needs to be done." For example, he notes, it could involve daily rounding to see where the bottlenecks are and identifying the most common patient complaints.

Clinical care in the ED also is changing, Williams says. "We have brand-new cardiac resuscitation protocols that didn't exist before and pressure to improve survival rates," he notes. "Test ordering is coming under more scrutiny. CT scans, once thought to be necessary, are now a source of concern as to whether EDs order too many of them." It takes a fairly self-sufficient manager to not just manage shifts and take care of the department, but to also manage these protocols and make them successful, he says.

On top of that, as the survey shows, ED managers are being asked to do more when often they have less help. While 57.9% of survey respondents said the number of employees in their department increased in the last year, 42.1% reported their staff had either decreased or not changed at all.

The trend of nurses leaving hospital positions to enter different fields is still significant, especially in the information technology sector, says Contino.

"Several of my colleagues have gone to work for professional services/consulting firms and vendors to assist with implementing electronic medical records and other technologies," she notes. "ED nurse directors/managers are also central to the healthcare reform initiatives including meaningful use, so there is increased pressure to leverage information technology and analytics to manage populations."

This situation is a two-edged sword, Contino notes. "In the short term, it contributes to hospital personnel turnover," she says. "In the long run, if those individuals re-enter hospital employment, they bring a vast array of experiences and expertise into work environments in desperate need of these skills."

Labor statistics report the projected growth is in physician offices, nursing care facilities, and home health, Contino says. Hospitals are expected to be in last place, with growth about 17%, she says. New graduates are struggling to find jobs, and in some communities, 40% to 50% are not employed two to three months after graduating. However, she notes, "the survey indicates the majority of ED managers have 25 years-plus in the industry, and 60% are between the ages of 51 and 65, which indicates they are among the group planning to retire in the next five to 10 years, so overall the long range outlook for nurses is very positive."

Because of high unemployment rates, her clients are not experiencing high vacancy rates, she says, but many organizations still have similar turnover rates. "In some organizations it ranges between 10%-15%, and among male nurses, turnover is reported as significantly higher," Contino reports. (See the chart below.)

All in all, Contino says, there is an excellent outlook for job opportunities once the economy stabilizes. "In fact, if, as the survey indicates, the majority of ED managers have 25 years-plus in the industry, that group will be among the group that retires, so we have to start finding ways of effectively grooming people for managerial positions," says Contino.

Chart 1

Chart 2

Chart 3

Chart 4