Background

There is a severe shortage of nurses in Australia. Policy makers and researchers are especially concerned that retention levels of nurses in the health workforce have worsened over the last decade. There are also concerns that rapidly growing private sector hospitals are attracting qualified nurses away from the public sector. To date no systematic analysis of trends in nursing retention rates over time has been conducted due to the lack of consistent panel data.

Results

A 1.4 percentage point improvement in retention has led to a 10% increase in the overall supply of nurses in NSW. There has also been a substantial aging of the workforce, due to greater retention and an increase in mature age entrants. The improvement in retention is found in all types of premises and is largest in nursing homes. There is a substantial amount of year to year movement in and out of the workforce and across premises. The shortage of nurses in public hospitals is due to a slowdown in entry rather than competition from the rapidly growing private sector hospitals.

Policy Implications

The finding of an improvement (rather than a worsening) in retention suggests that additional improvements may be difficult to achieve as further retention must involve individuals more and more dissatisfied with nursing relative to other opportunities. Hence policies targeting entry such as increased places in nursing programs and additional subsidies for training costs may be more effective in dealing with the workforce shortage. This is also the case for shortages in public sector hospitals as retention in nursing is found to be relatively high in this sector. However, the large amount of year to year movements across nursing jobs, especially among the younger nurses, also suggests that policies aimed at reducing job switches and increasing the number who return to nursing should also be pursued. More research is needed in understanding the relative importance of detailed working conditions and the problems associated with combining family responsibilities and nursing jobs.