Last year, Staffing Industry Analysts upwardly revised its final estimate of 2022 locum tenens growth to 27%. After predicting a 12% expansion in 2023, SIA’s crystal ball shows an additional 7% increase this year for a three-year increase of 46%.
SIA isn’t alone in predicting a bright future for locum tenens. As part of our twice-yearly campaign to assess where the industry is headed and where it’s been, we recently surveyed a half-dozen locum leaders and agency execs to learn whether they agree with SIA’s estimate—and why or why not. The contributors to our 2024 Locum Tenens Industry Outlook represented a cross-section of large and smaller firms and included:- Natasha Lee, CEO of Floyd Lee Locums, a South Carolina-based agency recently voted “Best Staffing Firm to Temp For” by SIA;
- Kim Herrmann, CEO of Wapiti Medical Staffing, which focuses on staffing healthcare providers in rural regions;
- Drew Cihlar, Senior VP at Hayes Locums, recognized as one of the Top 10 locums staffing firms by SIA;
- Matt Young, a 20-year locum tenens veteran, former NALTO Board President, and Managing Partner at All Star Healthcare Solutions,
- Joseph Brunson, founder and CEO of national healthcare staffing agency Tusk Enterprises;
- Ty Chambers, President of Rosman Locum Tenens, is newer to locums and specializes in neurosurgery, neurology, urology, and gastroenterology.
Forecasting the Future of Locum Tenens
In our survey, we asked participants to predict near-future trends based on what they’ve witnessed firsthand during the first few months of 2024. The overwhelming consensus was that the industry was headed up, up, and away. Their confidence is well-founded. SIA announced earlier this year that locum tenens was the only healthcare staffing segment to experience positive median revenue growth at 15%, and they expect an additional 7% growth in 2024.
That sounded like a bold claim until we heard from Natasha Lee of Floyd Lee Locums, who said she expects industry growth to be around 8 to 10% in 2024. Lee noted that locum tenens “solves a lot of problems in healthcare,” particularly physician shortages and burnout, which nearly 50% of all physicians experience to some degree.
“I think more doctors are discovering locums every day, and more facilities are getting used to the idea of having more flexibility,” Lee said.
“I think more doctors are discovering locums every day, and more facilities are getting used to the idea of having more flexibility."
All Star’s Matt Young, Rosman’s Ty Chambers, and Tusk’s Joseph Brunson concurred with Lee’s 8 to 10% growth prediction.
“There’s an increasing demand for healthcare services, especially in underserved areas, where the most critical gaps exist,” Young said. “The provider shortage of healthcare workers is getting worse, prompting facilities to rely more on locum tenens to ensure continuous patient care.”
Drew Cihlar of Hayes Locums was even sunnier. He predicted a 2024 increase of more than 10%. He claimed the current state of the locum industry comes from a confluence of events he expects to snowball, driving revenues higher for locums agencies.
“The surge of acquisitions of healthcare facilities by corporations and private equity firms, coupled with further increasing provider shortage, will lead to continued demand increase for locums,” Cihlar stated. “Providers are becoming more aware of the income-producing opportunities in locums, so more [agencies] are entering the market. This further exacerbates the supply problem and increases the demand for solutions, driving up the cost associated with locums and resulting in increased revenue for locums firms.”
“There's an increasing demand for healthcare services, especially in underserved areas, where the most critical gaps exist. The provider shortage of healthcare workers is getting worse, prompting facilities to rely more on locum tenens to ensure continuous patient care.”
Wapiti’s Kim Herrmann shared a different opinion, stating she expects the industry’s revenue growth to increase more modestly by 1 to 4%. She said hospitals in her market have started to hire internally to save on finances, and in the rural communities she serves, her team has seen “many [facilities] cut back on their outsourced needs.” While Herrmann believes these cuts could be significant, she still believes her agency could grow as much as 5% this year.
Both Cihlar and Lee predicted 10-20% growth for Hayes and Floyd Lee. Topping those rosy numbers, Brunson said Tusk could see as much as 30% growth this year, attributing it to providers’ increased interest in locum tenens.
Cihlar believes the success of locum tenens comes from an overall change in mindset about the profession and providers, who are “respected more by coworkers and permanent physicians” and seen as part of the team rather than a necessary evil.
“They used to be ‘the help,’ but the new trend is that they are more welcomed and are becoming a part of the local community,” Cihlar said. Lee added that more physicians are coming into locum tenens because of the opportunities to “grow clinically” and gain exposure to new thoughts and care models.
“Being able to collaborate with other physicians in their specialty is such a game changer,” Lee said. “They grow their professional network exponentially when they can access other physicians nationwide. This is one of the benefits we believe strengthens the clinical acumen of any locum doctor.”
“They used to be ‘the help,’ but the new trend is that they are more welcomed and are becoming a part of the local community."
Emerging Tools Set to Boost Agency Success
Looking at broader technology trends, Young believes AI can help agencies improve the efficiency of talent acquisition. “AI, in partnership with a CRM [customer relationship management] system, can help identify trends in talent demand, predict staffing needs, and guide recruitment strategies accordingly,” Young said. “AI can also analyze large datasets to uncover insights on where shortages are most acute and which specialties will be in high demand, enabling proactive talent acquisition.”
Herrmann and Brunson agreed that AI would improve their firms’ efficiency. “Some of the repetitive tasks associated with screening and credentialing will create some additional space for our team to focus on building relationships,” Brunson said.
Lee thinks AI can help smaller firms remain competitive by optimizing their workflow, adding that AI automation can reduce redundant tasks and allow agencies to focus on building relationships.
While new technology may improve efficiency, the staffing industry is primarily driven by the relationships recruiters and account executives build with providers and healthcare facility clients. Integrating chatbots, forms, and email automation into marketing strategies can enhance communication and customer service. Cihlar advised, however, that new technology should complement, not replace, primary communication methods.
“AI will never replace the role of a locum consultant,” Cihlar said. “However, it will make them more efficient with their time.”
“AI will never replace the role of a locum consultant. However, it will make them more efficient with their time."
The Greatest Threat to Locum Tenens’ Growth
The industry is at a technological and regulatory crossroads. AI’s potential to refine talent matching, optimize scheduling, and predict staffing needs could significantly elevate operational capabilities for staffing agencies. On the flip side, there’s an ongoing debate surrounding the independent contractor status of providers—a cornerstone of the locum tenens model.
A key benefit of hiring locum tenens providers is that facilities can use short-term contracts without offering full-time benefits or malpractice insurance, which are chiefly covered by staffing agencies and sometimes by the providers themselves.
However, the US Department of Labor and several state governments have proposed rules in recent years that could threaten that status, thereby preventing facilities from relying on 1099 contractors and forcing agencies to hire locum tenens providers as W2 employees. Locum tenens providers who enjoy the flexibility of contract work will also feel the effects of legislative change.
New status laws could significantly impede the industry’s progress by creating additional obstacles in an already arduous process of placing providers in underserved areas.
Our panel of locum leaders agreed that losing independent contractor status would pose a grave threat to the locum tenens industry. Consequently, executives at leading staffing firms actively support the National Association of Locum Tenens Organizations and advocate for the Healthcare Provider Shortage Minimization Act, reintroduced to Congress last fall, to protect this status.
Increased Demand for Specialty Docs
Turning to specialty trends, Brunson said Tusk has seen interest in more psychiatry and urgent care physicians. Herrmann also noted an uptick in demand for psychiatrists in rural communities. Chambers noted that since the American Cancer Society recommended colonoscopies starting at age 45, his agency has seen an uptick in gastroenterologist requests.
According to Cihlar, rural healthcare facilities have continually felt a significant strain on their health systems because of the lack of specialists and the limited number of primary care providers. As a result, there’s been an increase in demand for nurse practitioners and physician assistants.
“Being able to collaborate with other physicians in their specialty is such a game changer. They grow their professional network exponentially when they can access other physicians nationwide. This is one of the benefits we believe strengthens the clinical acumen of any locum doctor.”
Final Diagnosis
As noted by SIA, our survey participants, NALTO events, countless anecdotal comments, and our marketing clients, the 2024 outlook for locum tenens is unequivocally bright, thanks to elevated interest in locum tenens as a strategic solution.
On average, our survey participants expect an 8 to 10% increase in the size of the locum tenens staffing market, but many expressed concern that regulatory changes could rain on everyone’s parade should they come to pass. Despite these challenges, our discussions with locum leaders confirm its foundational mission remains the same as the industry evolves—to provide quality care in underserved areas and ensure continuity of care for patients across the country.
Thank you to the participants of this year’s Locum Tenens Industry Outlook Survey. We eagerly await your predictions for 2025’s outlook early next year.
