Like many in her position across the country, Stephanie Mearns, MN, RN, vice president for patient care services at the Little Company of Mary San Pedro Hospital in Southern California, is desperately seeking nurses. Her hospital has raised nurse salaries " three times in 20 months, she said. It offers a $10,000 sign-on bonus for certain positions. The hospital has extensive retention incentives, including an on-site BSN degree program, flexible scheduling, tuition assistance and a professional values program that compensates nurses who participate in education and nursing leadership events.

In some ways, the bonuses, salary increases and retention incentives are working. More new graduates have come to work at the hospital. One of the sign-on bonus positions has been filled. But other bonus positions, in telemetry, have no takers. Mearns must hire registry nurses and struggle to fill vacancies.

The salary increases and sign-on bonuses are still "not filling my needs," Mearns said. Nevertheless, the hospital will continue to offer them. "We have to stay competitive," she said.

Most hospitals across the country are in a similar situation, health care consultants and recruiters say. With no end in sight to the nursing shortage, salaries, benefits and bonuses are expected to rise steadily for the next few years, at least. After that, they say, what happens to salaries will depend on the state of the economy, the financial situations of health care institutions and the acuity of the nursing shortage.

All this is heady news for nurses who have seen years of salaries that barely kept pace with inflation and few benefits like pension plans or tuition reimbursement. Many nurses believe the shortage is bringing them the respect and appreciation they have felt lacking from their jobs, reflected in increased compensation.

But consultants, recruiters and union representatives warn both nurses and employers that higher salaries and huge sign-on bonuses alone won't buy job satisfaction. If hospitals want to attract and keep nurses, employers will need to make sure nurses have meaningful work, give them more autonomy in everything from scheduling to patient care, and offer them ways to grow in their careers. Nurses who want to feel satisfied and secure in their work must look beyond salaries and bonuses for jobs that offer them these benefits.

The nursing shortage, which began in certain regions and specialties, has spread throughout the hospital and the country, and is expected to worsen. Last year, one in seven hospitals reported a severe shortage of nurses, with more than 20 percent of RN positions vacant, according to a workforce report published in the fall by the American Hospital Association.

On average, the 1,092 hospitals that participated in the survey reported a 13 percent RN vacancy rate. More than 40 percent of those hospitals reported paying sign-on bonuses-up from 19 percent in 1999. More than half reported that their expenses for RN recruitment and retention had increased. Even if the demand for RNs does not change, the report projects a 15 percent RN vacancy rate in 2003.

Rick Wade, senior vice president of the American Hospital Association, said some hospitals were cutting community programs and deferring investments in new technologies and buildings to pay salaries for hospital staff.

Salaries

Nurse salaries vary widely from region to region, although consultants say this is changing as nurses become more mobile. Starting salaries are about $26,000 in Mississippi and about $48,000 in Southern California, according to nurses who teach or hire in those areas.

Average nursing salaries ranged from $38,456 to $49,088 in 2000, according to Nursing 2001 magazine. On average, they have increased between 4.5 percent and 6 percent annually since then, said Robert Roeder, senior compensation consultant and principal partner at Mercer Human Resource Consulting.

He expects salaries to continue to rise by at least 5 percent to 5.5 percent a year for the next two years, although the increase may not be as high in communities that are not affected by the shortage, such as those near nursing schools.

Nursing unions are negotiating increases in RN salaries of at least 5 percent and "often significantly higher," said Edmund Bronder, senior policy fellow for United American Nurses, AFL/CIO, the labor arm of the American Nurses Association. Nurses in New York recently negotiated a starting salary of $55,000, he said.

E. Carol Polifroni, Ed.D., RN, associate professor at the University of Connecticut School of Nursing in Storrs, said she expects annual salaries on the East Coast to increase by as much as $15,000-to between $60,000 and $65,000-in the next two or three years.

In California, where the nursing shortage is especially acute, the California Nurses Association has negotiated recent contracts that include raises of 14 percent to 20 percent over two years, said Jill Furillo, RN, director of government relations for the association.

"I think nurses are feeling somewhat empowered because of the shortage," Furillo said. "We feel that we have much more leverage."

As the shortage continues, Polifroni expects employers will offer more benefits such as tuition reimbursement and retirement benefits, in addition to salary. Few hospitals offer pension plans, she said, although they may offer some other type of salary deferment plan, such as a 401(k).

Benefits

Karen DeLevan, senior recruiting consultant for Texas Health Resources in Dallas, said she has seen increased interest in pension plans-and not just from older nurses. "We're seeing some interest from the Gen-Xers," she said. They're looking for plans that might let them retire early on a lesser amount of money, she said. "But they're still looking at it."

Pension plans and insurance benefits that carry into retirement are not only attractive to nurses looking for jobs, Furillo said. They also make excellent recruitment and retention tools. "It's an incentive for a nurse to hang in there," she said.

In addition to traditional benefits such as retirement, employers may have to offer other special incentives to attract nurses.

"One of the areas that employers should be looking at is 24-hour child care," said Judy K. Leavitt, M.Ed., RN, FAAN, associate professor at the University of Mississippi School of Nursing in Jackson. "That's the area that sometimes gives nurses the most difficulty." For nurses with families, a 24-hour child care program might be more attractive than a high-end salary, she said.

DeLevan said she doesn't receive as many requests for child care as she used to, but she is hearing from nurses who want family benefits, such as scholarships for dependent children. Polifroni said paid sabbatical leaves, like those offered to university professors, or at least more vacation time, might attract nurses to a job.

Most consultants and those who study workforce issues believe larger hospitals would do well to offer a "cafeteria-style" benefits package that allows employees to pick and choose which benefits they want. The amount of their salaries would vary with the number and type of benefits they select, and the employer wouldn't have to pay for benefits that some employees didn't want or use.

Bonuses

Although neither union leaders nor hospital administrators favor them, consultants and recruiters expect sign-on bonuses to continue and to increase in the future.

"When I'm posting a job and there's a sign-on bonus, I get a much better response," said Frank DiLello, accounts manager of MedHunters.com in Toronto, an headhunting company for medical staff.

The typical sign-on bonus is between $2,000 and $5,000, he said, although he's seen bonuses as high as $10,000. Most are offered by large hospitals, but smaller facilities are starting to join in the practice. DiLello knows of a small hospital in New Mexico "in the middle of nowhere, where every single medical job has a sign-on bonus" of about $2,000.

Roeder said he recently read about a hospital in Cincinnati that was offering $30,000 sign-on bonuses paid over three years for cardiac care nurses.

"Sign-on bonuses attract people," DeLevan said. "I hate to say it because I don't believe in them," but she sees the practice continuing. "We might call it different things," she said, such as hiring incentives or retention bonuses.

To keep staff happy, some hospitals offer retention bonuses to qualified nurses already working for them. Others offer referral bonuses to employees who successfully bring a new nurse into the fold. Roeder believes bonuses for employees are a wiser use of money than sign-on bonuses because they retain nurses already working, as well as bringing in new workers.

These tactics also help decompress the salaries of bedside nurses, who would otherwise reach their earning peak within a few years, consultants said. Many hospitals also offer salary increases for advanced education and credentials to encourage nurses to continue their education, as well as their earning power.

Many nurses believe that the salary increases, bonuses and new benefits have been long in coming. Nurses' salaries from the mid-1980s through 2000 were flat, Bronder said. In the mid-1990s, they didn't even keep up with inflation.

"It's only been in the last couple of years that somebody could truly raise a family on what a nurse is making," Polifroni said.

Whether salaries now are at a level that nurses believe is fair depends on whom you talk to and where they work. "We still hear the complaining about salary, with regard to how many hours they're working and the acuity of the patients," DeLevan said. Mearns said she still hears nurses say they are underpaid.

But although the first question new graduates usually ask DeLevan is about salary and bonuses, nurses seldom list pay as the reason they leave or stay in their jobs. In surveys of why nurses leave their jobs, salary doesn't even make the top five, she said.

"They don't stay for the salary. They stay because feel they're part of a family on the unit. Or they stay because they have a great nurse manager or because the administration is pro-nurse. They stay because they have a say and feel they are being listened to in their facility, even if they are not paid at the top of the range."

"Salary matters," Furillo said. But the first questions the nurses she knows ask a potential employer are, "What's your staffing like?" "What is your model of care?" Many hospitals that work to make themselves attractive to nurses, including at least one magnet hospital in California, do not offer sign-on bonuses, she said.

Salaries also do not seem to make a huge difference in why people go into nursing, said Joanne Spetz, Ph.D., of the Center for California Health Workforce Studies at the University of California, San Francisco. "I think the overall image of nursing is the biggest factor in deterring people from considering nursing as a career," she said. In one study Spetz heard cited, people viewed nurses as laid off, on strike or angels of mercy. "Not exactly the best images for young people," she said.

Room for improvement

Spetz said surveys and focus group discussions have shown that nurses are most dissatisfied with working conditions, flexibility of employers and their benefits. [The NURSEWEEK/AONE survey reflects this and other issues. www.nurseweek.com/survey] Improved staffing ratios were their top issue, she said. They also wanted more control over their shifts and overtime, more understanding about their child care needs, adequate sick time and protected benefits.

Wise employers will offer competitive salaries and benefits, Roeder said, but they also will make sure they're providing nurses with an organization for which they feel proud to work, a good fit with supervisors and jobs, the feeling of being valued members of a team and opportunities to expand their knowledge and skills.

If employers don't offer these things, he said, "any money you throw at this problem is going to be money you're throwing away."

Joann Genovich-Richards, Ph.D., MSN, MBA, RN, is president of Sharendipity Enterprises Inc. in Sterling Heights, Mich., a private consulting firm for strategic planning and performance for health care institutions.

She worries that as hospitals are forced to pay higher wages and scramble for nurses, they may begin to divert some aspects of nursing jobs to less skilled, lower-paid workers.

"My greatest fear is that we will see other ways of getting the task done," she said.

DeLevan believes the attempt to use lower-skilled workers in nursing jobs failed so miserably in the past that it won't be tried again. She has faith that more young people-attracted to the idea of helping society-will go into nursing and eventually ease the shortage. In the next five years, she sees salaries leveling out and sign-on bonuses disappearing.

Roeder isn't so sure. "We know there's going to be a continuing demand for nurses and we're going to have to pay a price for those," he said. "We're not sure how we're going to do that. To look five or six years out, it's pretty scary."

In the meantime, administrators in some hospitals are finding that although hiring new nurses is a struggle, they are more in tune with the needs of their existing staffs.

"I'm more focused on what we are doing to keep the people we have here," Mearns said.

"They're looking for respect, they're looking for flexibility in their jobs, they're looking for workloads that reflect patient acuity. I haven't ever heard them ask for anything that's so outrageous that we can't try to fix it."

Contact Cathryn Domrose at kaguilar@well.com.