Healthcare Layoffs 2024: 3 Things HR Needs to Know

Layoffs in hospitals, health systems, and the broader healthcare sector have been on the rise. This has been a trend for the past couple of years as the industry slowly recovers from a financially devastating 2022, and it does not yet seem to be slowing down. 

Total U.S. healthcare layoffs in 2023 went up by an over 90 percent increase from the total number of healthcare layoffs in the U.S. in 2022. Many of these reported layoffs saw upwards of 100 people let go at once as organizations struggled to reduce their workforce, putting an immense pressure on hospital HR departments in the process. The healthcare sector fell behind only tech and retail in terms of the highest number of layoffs in 2023. Now in 2024, a recent review reports that there have already been 27 healthcare layoffs so far. 

For those in HR handling these healthcare layoffs and hospital downsizing efforts, it is an understandably stressful time. No one likes layoffs, but it’s a mandatory part of the job. In this article, we will share handy advice to help you wade through these troubled waters and ensure that your organization and outgoing employees are able to move on successfully.

Healthcare Layoffs: The Notification Meeting

The first thing that will happen if your healthcare organization is starting to downsize is the layoff notification meeting, in which the HR manager will meet with those individuals being let go. This is one of the toughest parts of the process and should be handled with great care. 

With healthcare layoffs on the rise year over year, these meetings are becoming more and more common, making it all the more important to be prepared to handle them with a delicate yet effective touch. This means that when you break the news to an employee, you need to give them time to vent (within reason) and hear what they have to say, while also hitting certain talking points to ensure the process is handled efficiently. 

The notification meeting typically has three parts: the beginning, middle, and end. The beginning is the actual notification, the middle is about allowing them to talk and listening to what they have to say, and the end is for reviewing any benefits–such as severance packages and outplacement–which is an extremely important part of the layoff process.

For this meeting to go successfully, it’s vital to have a plan on paper and a layoff script ready. Layoff scripts are important for two reasons. One reason is that they help keep you focused on the task at hand. The other reason is that they will ensure you hit those very specific and valuable talking points we mentioned. 

The good news is that, here at Careerminds, we have a layoff script all ready for you to customize, which you can download below completely for free.

Healthcare Layoffs: Severance and Outplacement

At the end of your layoff notification meeting, you will need to present the employee with their benefits and severance package. This typically includes a lump sum payment to help support their transition into a new job. However, this is rarely enough. 

What your employee really needs–and deserves–is a proven path to a new job. This is why one of the most important–and often overlooked–things to include with the severance package is proper outplacement services.

In short, outplacement is a service you can and should provide to your outgoing employees that helps them re-enter the job market, update their resumes, and find new, meaningful employment in the most stress-free way possible. For those being let go in healthcare layoffs, these services can give a dramatic boost to their job hunt.

What’s more, severance packages and outplacement can help deflect some of the bad press your organization may receive during a layoff. Keeping your reputation intact is vital in today’s world. Tarnishing can seriously impact what talent applies to your organization in the future, what people stay working for you, and what customers use your service. Why not go the extra step to protect it?

Healthcare Layoffs: A Perfect Storm

While we’re on the subject of things HR managers should know while handling healthcare layoffs, it’s important to take a step back and look at the broader job market in general. For example, hospital downsizing is only one of the major shifts currently affecting the U.S. workforce.

Another current element having a large impact is the mass baby boomer retirement. 10,000 baby boomers are expected to leave the workforce every day over the next decade or so. If you couple that with healthcare layoffs, hospitals are undergoing a serious shakeup that is going to hit HR hard.

With all this disruption, HR needs to plan ahead, recognizing the climate and acting accordingly. Now you should have a layoff script, a proper severance package with outplacement, and the knowledge of what’s to come. The one step left to cover is creating a plan for your workforce.

Healthcare Layoffs: Workforce Planning and Development

Given everything we now know about healthcare layoffs and downsizing, this should come as no surprise. You’re going to need a solid plan for your workforce to ensure that you are continuously developing new leaders and preparing them to take over for the outgoing leaders, regardless of whether they are retiring or are being let go for other reasons.

Workforce planning is important at all times. Especially with healthcare organizations going through such large downsizing. With proper workforce planning, drastic actions like these may be able to be lessened or even avoided altogether. Naturally, the most optimal way to deal with a round of hospital layoffs is to never hold the layoffs in the first place.

These workforce plans should also be updated regularly to reflect the situations you may need to handle. Right now, that means layoffs. In the future, it could be a hiring boom. Things change rapidly, especially in the healthcare industry. But with proper planning, you can navigate those changes much more easily.

At Careerminds, we have you covered on this front too. Click below to download our workplace planning guide that you can use for free.

Healthcare Layoffs: Final Takeaways

Using everything we mentioned here and understanding the current job market at large will help you weather the storm of healthcare layoffs with ease.

Using a layoff script when the notification process begins is a good way to stay on track during an emotional time and say what needs to be said, while also allowing the employee space to breathe and process the news. 

Having a comprehensive severance package that includes outplacement will provide proper support for your outgoing staff, while also protecting you and the organization.

Finally, using a workforce planning template to properly plan and manage your staff is a must for navigating these layoff events and preparing for future changes, ideally to help your organization avoid any drastic downsizing as much as possible.

When added together, these simple steps can ensure that your HR department can properly deal with hospital layoffs and possibly prevent them from happening in the future. Given the number of healthcare layoffs in recent years that are still on the rise, following these steps is paramount for any healthcare organization. 

If you are navigating healthcare layoffs and need help supporting your workforce through this stressful time, click below to speak with our experts and see how our Careerminds outplacement services can help you protect both your employees and your organization through the whole process.

Rebecca Ahn

Rebecca is a writer, editor, and business consultant with over 10 years of experience launching, managing, and coaching small to midsize companies on their business, marketing, and HR operations. She is a passionate people advocate who believes in building strong people, teams, and companies with empowering culture, content, and communication that facilitates meaningful results at every level and touchpoint. In her spare time, Rebecca is an avid traveler and nomad who also enjoys writing about travel safety and savvy. Learn more on her LinkedIn page.