Hospitals and nursing homes spent at least $1.5 billion on private staffing agencies last fiscal year; a new report finds. Since the COVID-19 pandemic, health-care facilities across Canada have relied on private nurse staffing agencies to address staffing shortages.
Hospitals and nursing homes have been hiring nurses through private companies that charge high fees when they are struggling to staff their facilities. This report details just how severe this reliance on private nurse staffing agencies is and the resulting increased costs.
According to a study led by Joan Ermost, a professor of nursing at Queen’s University, Canadian public health-care facilities are expected to spend at least $1.5 billion on private staffing agencies in fiscal year 2023-2024. That’s a sixfold increase from the $247.9 million spent in fiscal year 2020-2021. “This figure may just be the tip of the iceberg,” Urmost warned. “The actual spending is likely much higher.”
The study, commissioned by the Canadian Nurses Union (CFNU), was based on concerns from its members about the growing reliance on private-sector nurses in hospitals and nursing homes. Professor Ermost’s research found that public spending on private-sector nurse staffing agencies has increased dramatically since 2020, as have the hours worked by private-sector nurses and the hourly rates charged by agencies. Specifically, private-sector nurse hours have surged since the pandemic, equivalent to the hours worked by 3,724 full-time nurses in fiscal year 2023-2024.
Additionally, the average hourly rate paid by facilities to private-sector nurse staffing agencies has increased 34 per cent, from about $100 in 2020-2021 to about $133 in 2023-2024.
“Relying on private-sector nurse staffing agencies is a stopgap measure and will only exacerbate the shortage in the long term,” said CFNU President Linda Silas. “The government needs to come up with a plan to gradually reduce the number of staffing agencies,” Silas said, adding that a sudden reduction could lead to emergency room closures and surgery cancellations.
Private staffing agencies have historically operated on a small scale in Canada’s health-care system, primarily filling emergency work gaps in remote areas or cities where permanent staffing is difficult to secure. But with the massive exodus of nurses from hospitals and nursing homes following COVID-19, managers have become more reliant on private staffing agencies to fill their staffing needs.
In response, staffing agencies have increased their hourly rates and aggressively recruited nurses from the public system, further deepening the shortage. “The growing reliance on private staffing agencies reveals a lack of policies to support and retain staff,” said Ivy Bourgeau, a professor at the University of Ottawa. “Canada is facing a health-care workforce crisis that cannot be overcome with short-term solutions.” “A long-term, systematic strategy is needed to address the workforce shortage,” Bourgeau said.
Meanwhile, CFNU has called for regulation of the private medical workforce industry, arguing that the government should make it mandatory for staffing agencies to register and license them. “Nowadays, anyone with a laptop can easily set up a staffing agency,” said Chairman Silas, adding that “this is turning into a business model where people can make easy money.”