Job Growth and Replacement Needs in Nursing Occupations
Acknowledgements
This report has benefited from the close collaboration between the Monash University-ACER Centre for the Economics of Education and Training (CEET) and Centre for Policy Studies (CoPS), Monash University. In particular we are grateful to Dr Tony Meagher from CoPS. Forecasts of employment by occupation produced by CoPS have been used in the analyses in this report. The report has also benefited from discussions with Tom Karmel (DETYA), Denis Hart (DEWRSB), Andrew Bray (DEWRSB), Michael Long (CEET) and participants at the National Review of Nursing Education forum in Canberra in October 2001. DEWRSB supplied the data on qualifications.
Executive summary
This report contains information on job growth and replacement needs in various nursing occupations in Australia. The Monash University-ACER Centre for the Economics of Education and Training (CEET) was commissioned by the Department of Education, Training and Youth Affairs (DETYA) to produce this report to provide research support for the National Review of Nursing Education.
The analyses are based on unpublished data from various ABS Labour Force surveys and the Labour Mobility survey for 2000. They also include the June 2001 employment growth forecasts by occupation produced by the Centre of Policy Studies (CoPS), Monash University and the replacement need forecasts produced by CEET.
Employment trends, 1987 to 2001
The changing patterns of employment by State and Territory, gender, age and hours worked in nursing occupations over the 1987-01 period are described in this report. The nursing occupations considered are Directors of Nursing, all Nursing Professional occupations, Enrolled Nurses and Personal Care and Nursing Assistants. In addition, analyses relating to the community services occupation of Aged or Disabled Person Carers are included in an Appendix to the report as this occupation is not strictly a ‘nursing’ occupation. It is, however, important to consider the changing patterns of employment in this occupation because the boundaries between the roles of nurses and carers, especially in aged care, tend to be blurred. The total of the groups, without the Aged or Disabled Person Carers, is referred to as Nursing Workers in this report. Although there are similarities in the employment trends across different occupations and across States and Territories, there are also significant differences.
From 1987 employment in nursing occupations grew at an annual rate of 0.8 per cent, which is half the rate for all occupations, to total 248 000 in 2001. There were substantial differences among the States and Territories in the rate of growth. In South Australia and Tasmania employment contracted while in Queensland the annual growth was well above the Australian average at 2.7 per cent per year. In contrast employment of Aged or Disabled Person Carers has increased at an annual average rate of 10 per cent to reach 71 000 in 2001. Victoria’s share of this occupation was 33 per cent in 2001 compared to 21 per cent for New South Wales.
Employment of Nursing Workers per 100 000 population, after initially increasing to about 1 400 in the second half of 1980s, has been steadily declining. This is despite the ageing of the Australian population over this period and a 75 per cent increase in hospital patient separations between 1986 and 1999. It currently stands at about 1 300 which is just below the level in 1987. The analysis at the State and Territory level show that the ratios varied widely across jurisdictions in the mid-1980s but have since been converging to the levels prevailing in New South Wales, Queensland and Western Australia for which they have remained relatively stable and close together.
There has been a shift towards shorter working hours among Nursing Workers. In contrast to the labour force in general, where the shift in hours has been from the normal full-time hours towards very short or very long hours, for Nursing Workers the shift has been from normal full-time hours towards working 16-34 hours per week. For Aged or Disabled Person Carers the proportions working either 16-34 hours or normal full-time hours have both increased¾ the proportions working relatively few or very long hours are the ones that have declined.
The shift towards shorter working hours for Nursing Workers, the reduction in the ratio of Nursing Workers per 100 000 population and the increase in the hospital patient separations all point to an increase in labour productivity. However persistent reports of waiting lists for elective surgery and emergency department admissions suggest there is significant unmet demand for services. This raises issues of quality of services but their discussion is beyond the scope of this report.
Overall, Nursing Workers are older now than they were in 1987. In general, the age profiles across occupations are similar, apart from profiles for Nurse Managers and Directors of Nursing who have a much higher proportion in the 45 and older age group and Registered Midwives who have a much lower proportion in this age group.
The changes in the relative proportions of Nursing Professionals, Enrolled Nurses and Personal Care and Nursing Assistants employed suggest the growth of Nursing Professionals has been at the expense of the other two groups. However this pattern of change is not uniform across States and Territories. In New South Wales the substitution appears to be only between the Nursing Professionals and Enrolled Nurses. In South Australia the shift has been away from Personal Care and Nursing Assistants and towards the other two groups, and in Queensland there has been hardly any change.
Projections of labour demand, 2001 to 2006
The ageing of the population is likely to put more pressure on the demand for health services. Given that the health industry is very labour intensive, it means that a higher demand for Nursing Workers can be expected in the future. The effect of technological change on the demand for Nursing Workers is more complex. Recent advances in micro- and keyhole surgery and other innovation in patient care have enabled earlier discharge of patients and consequently a higher throughput of patients. On the other hand technological advances enable treatment of a wider range of ailments resulting in a higher demand for services. Therefore it is difficult to assess the net effect of technological change on the demand for Nursing Workers.
The demand is also affected by policies regarding the appropriate mix of different types of Nursing Workers. In the aged care industry the appropriate mix also includes Aged or Disabled Person Carers. Even though employment of Nursing Workers per 100 000 population across States and Territories seem to be converging, there is considerable variation in the mix between Nursing Professionals, Enrolled Nurses and Personal Care and Nursing Assistants that is employed across jurisdictions. This reflects differences in employment policies, standards and the roles of different Nursing Workers and carers across jurisdictions. These trends suggest a more holistic and national approach is desirable for the delivery of nursing care.
The projections reported in this paper are based on existing policies and trends and therefore must be considered as baseline data to be considered in conjunction with information about the effects of proposed policy developments.
In the nursing occupations that are expanding about 9 000 additional jobs are projected from 2001 to 2006. Contraction in some nursing occupations, however, means that overall employment of Nursing Workers may grow by only about 5 000 positions. The projected average annual growth rate is 0.4 per cent, which is well below the growth rate of 1.4 per cent for the employed labour force as a whole. Within the Nursing Professional group large growth is expected in the managerial nursing occupations and among Registered Midwives. A contraction is projected among Enrolled Nurses and Personal Care and Nursing Assistants though changes in government policy can affect this. In contrast a growth rate of 4.9 per cent is projected for Aged or Disabled Person Carers. These trends are difficult to reconcile given the anecdotal evidence of labour shortages, especially in the aged care sector. It is not clear whether the shortages are for nurses or the less qualified carers or for both.
Job openings are not only a result of growth in an occupation but also result from turnover or replacement of workers who leave. The two concepts of replacement considered in this report are:
- gross replacement; and
- net replacement.
Gross replacement provides information on job openings arising from individuals leaving the occupation and needing to be replaced over a given time period. This concept is useful for those providing career advice because when estimates of gross replacement are added to growth estimates they indicate all job opportunities in the occupation.
Net replacement attempts to capture leavers from an occupation net of those re-entering. The sum of net replacement and growth provide information on job openings for new entrants into an occupation. This concept is useful for education and training planners as it approximates minimum training needs in occupations, that is, if training is indeed required.
The job openings due to persons leaving employment in nursing occupations (gross replacement) are expected to total more than 100 000 in the five years to 2006, an annual rate of 8.3 per cent. This is after allowing for the contraction in employment in some occupations. The rate is well below the 14.5 per cent rate for the economy as a whole but is similar to that for many professional occupations. The replacement rates vary across the different nursing occupations, with the rate for professionals, in general, lower than for the two non-professional category occupations and the carer occupation.
The estimated jobs available to new entrants resulting from persons leaving employment (net replacement) are estimated to be 22 000, or at an annual rate of 1.8 per cent. This is lower than the rate of 2.2 per cent for the economy as a whole. The rate for Nursing Professionals is slightly higher than the rate for Personal Care and Nursing Assistants and Aged or Disabled Person Carers. This is despite the relatively shorter average tenure of jobs in the latter occupations. One reason for this is that the Nursing Professionals are on average older and therefore a high rate of outflow is expected from this occupation group.
On the basis of the above projections of both job growth and job replacement, aggregate job openings are calculated to be 110 000 for the five years to 2006. Of all job openings in nursing occupations, 68 per cent are expected for Nurse Professionals (including Directors of Nursing), 10 per cent for Enrolled Nurses and 22 per cent for Personal Care and Nursing Assistants. Less than one in ten openings are as a result of growth in nursing occupations. Job openings for Aged or Disabled Person Carers are expected to be 65 000.
Jobs available to new entrants in nursing occupations are projected to be 31 000 for the five years, at an annual rate of 2.5 per cent of the total employed Nursing Workers. These provide an indication of minimum training requirements. The actual number to be trained in those occupations where training is necessary will naturally be higher because some trainees do not finish courses and others may opt for jobs in other occupations. The rates vary across occupations with some of the highest rates for managerial occupations and Registered Midwives. For Enrolled Nurses and Personal Care and Nursing Assistants the rates are much lower because job openings in these cases are due only to net replacement while in other occupations they are also due to growth. The rate for Aged or Disabled Person Carers is much higher at 5.8 per cent, mainly because of the high growth rate projected in this occupation.
The information in this report is subject to a number of limitations. The modelling does factor in changes in the economic outlook as soon as data become available but the impact of more recent policy decisions such as new agreements on staffing ratios is not incorporated until implemented and reflect in employment and other economic data.
On its own, information on demand is insufficient to determine if shortages are looming. Data on supply is also needed. Shortages are also difficult to analyse and determine because they vary enormously by regions and specialities.
However the information on growth and replacement needs contained in this report is critical for developing policies on nurse workforce issues at the macro level. It is also useful in providing baseline data to complement other qualitative and quantitative local information for making policy decisions at the regional level.
1 Introduction
This report contains information on job turnover and growth in various nursing occupations in Australia. Job turnover and growth together determine the number of job openings in an occupation and hence the numbers that need to be recruited if shortages are to be avoided.
The Monash University-ACER Centre for the Economics of Education and Training (CEET) was commissioned by the Department of Education, Training and Youth Affairs (DETYA) under the Evaluations and Investigation Programme (EIP) to produce this report. The purpose of the project is to provide research support for the National Review of Nursing Education.
Growth
The estimates of change in employment in the Nursing Worker occupations are those made by the Centre of Policy Studies (CoPS) based on the MONASH model. MONASH is a computational general equilibrium model. It takes macro forecasts of the economy and incorporates known policy changes and a range of other economic data to forecast production by industry. It uses this information to produce forecasts of employment by occupation for 340 occupation groups. Such modelling does factor in changes in the economic outlook as soon as data become available but the impact of more recent policy decisions such as new agreements on staffing ratios are not incorporated until implemented and reported in employment and other economic data.
Replacement needs
There are two main concepts of replacement, or turnover, considered in this report. The first, gross replacement provides information on job openings arising from individuals leaving the occupation and needing to be replaced over a given time period. This concept is useful for those providing career advice because when estimates of gross replacement are added to growth estimates they indicate all job opportunities in the occupation.
The second concept is that of net replacement which attempts to capture leavers from an occupation net of those re-entering. The sum of net replacement and growth provide information on job openings for new entrants into an occupation. This concept is useful for education and training planners as it approximates minimum training needs in occupations.
Shortages
Shortages occur when the supply of workers does not match the number of job openings to be filled. This paper includes information on job openings for new entrants but this is only part of the information needed for the consideration of the likelihood of shortages. An analysis of the supply of new Nursing Workers is also needed.
Numerous reports tend to suggest looming shortages of nurses in Australia as well as in many overseas countries. A recent review of the international and Australian research on the subject can be found in Department of Human Services (2001). Some of the common factors identified as responsible for shortages were ageing of the population, greater demand for health services, ageing of the nursing workforce, greater career choices for women and nurses’ dissatisfaction with their work conditions. In some countries like New Zealand an added factor was emigration. In some countries and jurisdictions general shortages of nurses are predicted, in others the shortages are in specific specialist areas or geographical locations.
To counter these perceived shortages a number of governments commissioned reports to identify strategies for recruitment and retention of nurses (Department of Health 1999b; Department of Human Services 2001; Department of Human Services1998; Ministry of Health 1998; NSW Health 2000; Queensland Health 1999; Biztrac Edith Cowan University 1997). The strategies identified in these reports included a career and pay restructure for nurses, ways of attracting back into the workforce nurses who had left, recruitment of overseas nurses, flexible working hours and child care facilities. In its response to the Health Committee, the UK Government recognised that a long term strategy to avoid staffing shortage would involve abandoning local pay arrangements in favour of centralised, industry-wide pay reviews, and would hinge on effective forward planning of the workforce (Department of Health 1999a).
The task of estimating shortages is further complicated by the fact that shortages specific to local areas or specialisations could occur in spite of a balance, or even a surplus, at the macro level. Thus only few studies have attempted to quantify shortages and fewer have done it rigorously.
Buerhaus, Steuger and Auerbach (2000) estimate a 20 per cent shortage in registered nurses in the United States by 2020 if current trends in demand continue. Their model takes account of the changing demographic profile of nurses, the increase in the population at large and the changing pattern in the career choices of women. Assuming a 23 per cent increase in the State’s population, Coffman and Spetz (1999) estimate a 34 per cent increase in the demand for registered nurses in California by 2020.
A study published by the Canadian Association of Nurses predicts a shortage of between 59 000 and 113 0001 in English-speaking Canada by 2011 (Ryten 1999). On the basis of employment of 174 000 registered nurses in 2000 (Canadian Institute for Health Information 2001), this translates to a shortfall of between 34 and 65 per cent. If these estimates are accurate then they represent an enormous challenge for the Canadian health authorities.
As reported in Department of Human Services (2001), Australia lacks definitive national data on the extent of future potential nurse shortages. Some States, notably Queensland and Victoria, have done some nurse labour force projections. In Queensland no state-wide shortages were projected (Queensland Health 1999), while in Victoria the population growth, ageing and a lack of adequate supply was likely to result in a shortfall of 5 500 nurses2 by 2008 (Department of Human Services 1999). The Department of Employment, Workplace Relations and Small Business (DEWRSB) have updated lists of occupations with a skill shortage (DEWRSB 2001). The lists provide only indications of shortage without any numerical measure of the extent. The latest such list includes Registered Nurses in a number of specialities.
Structure of this report
This report’s main focus is on the analyses of growth and replacement needs in nursing occupations at the national level. No attempt is made to analyse shortages though the data provided is an essential input to such analyses. The structure of the report is as follows. In the next section the historical employment patterns in nursing occupations, spanning the period 19873 to 2001, are described. These analyses also include the qualification profiles in nursing occupations for a recent period. Next analyses and projections of replacement needs, growth and job openings are presented for the five-year period ending 2006. The final section contains some concluding comments.
1 The lower estimate assumes demand due to just population increase while the higher estimate assumes demand due to both population increase and the ageing of the population
2 Includes registered nurses (Division 1), enrolled nurses (Division 2) and registered psychiatric nurses (Division 3)
3 Refers to the financial year ending June 1987. this will be the convention used in the rest of the report
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