Average cost of recruitment: physicians and advanced practice

The Average Cost of Recruitment for Physicians and Advanced Practice Providers: Insights from Staffing Firms

Recruiting top talent in healthcare is one of the most critical and costly processes for hospitals, clinics, and private practices. With shortages in healthcare professionals such as physicians and advanced practice providers (APPs), finding the right candidate can be both time-consuming and expensive. Staffing firms play a crucial role in bridging this gap by helping organizations identify and hire the right talent. But what is the cost of using these services for direct hires?

Let’s talk about the average cost of recruitment for physicians and advanced practice providers (like nurse practitioners and physician assistants) through staffing firms, breaking down the key factors that influence pricing and what organizations should expect.

Factors that Influence the Cost of Recruitment

Before diving into the numbers, it’s important to understand that the cost of recruitment varies widely depending on several factors:

- Type of Provider: Physicians tend to command higher recruitment fees due to the specialized nature of their roles and the length of time it takes to fill these positions. Advanced practice providers like nurse practitioners (NPs) and physician assistants (PAs) generally require less recruitment time, but the demand for these roles has surged in recent years, impacting recruitment costs.

- Geography: Rural and underserved areas often have higher recruitment costs due to the difficulty in attracting candidates to these locations. Urban centers might have a larger talent pool but face more competition for top-tier providers.

- Specialization: Certain specialties, such as orthopedics, cardiology, and neurology, require highly specialized skills, which increases the cost and length of recruitment efforts. Similarly, finding providers with sub-specialties can also drive up costs.

- Rime to Fill: Staffing firms often charge higher fees if the hiring timeline is short. Urgent hiring needs may lead to premium services, including extensive headhunting efforts and wider searches.

Average Recruitment Costs for Physicians

For physicians, staffing firms typically charge 20% to 30% of the physician’s first-year salary as a recruitment fee.

- Example: If a practice is hiring a physician with a starting salary of $250,000, the recruitment fee can range from $50,000 to $75,000, depending on the firm and factors mentioned above.

While this percentage may seem steep, consider the long-term financial impact of an unfilled physician role. The cost of lost revenue for the hospital, decreased patient access, and strain on other staff members can be even higher.

Average Recruitment Costs for Advanced Practice Providers

For advanced practice providers, including nurse practitioners and physician assistants, the recruitment fees tend to be lower than for physicians but are still a significant investment. Staffing firms typically charge 15% to 20% of the APP’s first-year salary.

- Example: If a nurse practitioner is being hired with a salary of $130,000, the recruitment fee would be around $19,500 to $26,000.

The costs of recruiting APPs are still influenced by specialization and location. A nurse practitioner specializing in family medicine in an urban area may be easier (and less costly) to place than a rural-based acute care nurse practitioner.

Flat Fee Models vs. Percentage Models

Some staffing firms, like Advanced Scope LLC, are shifting towards flat-fee models, which can offer cost advantages, particularly when multiple hires are needed. Flat-fee models remove the incentive to push candidates with higher salaries to increase commission, allowing practices to focus on hiring the right person for the job.

In the flat-fee model, recruitment costs may range from $15,000 to $30,000 per hire, regardless of the candidate's salary. This approach can be especially appealing for practices hiring several mid-level providers over the course of a year or for organizations looking for more transparency in the recruitment process. Advanced Scope is the only Orthopedic and Sports Medicine recruitment firm that is charging an affordable flat fee versus a percentage of salary with a guarantee of placement success in a retained model.

Additional Costs of Hiring to Consider

Beyond the initial recruitment fee, there are more costs to consider when hiring:

- Relocation Costs: Many physicians and advanced practice providers require relocation assistance, which can add another $10,000 to $20,000 to the total cost.

- Onboarding and Training: Integrating new hires into a practice or hospital can take time and resources. The costs of onboarding and training must be factored into the overall recruitment expense.

- Opportunity Costs: The longer a position remains unfilled, the more revenue a practice could potentially lose. For example, an unfilled orthopedic surgeon role could cost you $2,000 to $5,000 in lost revenue per day due to canceled surgeries and delayed patient care.

Recruiting physicians and advanced practice providers is a complex and costly process, and staffing firms help to streamline this by tapping into their networks and expertise. For organizations hiring healthcare providers, understanding the average recruitment costs and the factors that influence them is essential for budgeting and planning.

Whether opting for a traditional percentage-based model or a more transparent flat-fee approach, healthcare organizations must weigh the immediate recruitment expenses against the long-term benefits of filling critical positions efficiently and effectively. While the cost of recruitment may seem high upfront, the consequences of an unfilled position can be far greater.

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