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Compensation Survey 2007

Nursing Management (Springhouse): July 2007 - Volume 38 - Issue 7 - p 14–23
doi: 10.1097/01.NUMA.0000281131.10745.6e
FEATURE
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The results are in. See how total compensation—particularly benefits and retirement—impacts recruitment and retention of experienced nurse leaders.

ABOUT THIS SURVEY: Nursing Management's Compensation Survey 2007 questionnaire was published in the January through April issues of the journal and online at http://www.nursingcenter.com/NMcompsurvey from January 1 through April 30. Franklin Communications, a research firm in Rockaway, NJ, tabulated data from 613 respondents.

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Although salaries are up, total compensation — particularly benefits and retirement — remains inadequate to encourage recruitment and retention of experienced nurse leaders.

A staff report

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Nursing Management's Compensation Survey 2007 reflects more than just dollars and cents on the paycheck. The results give us a snapshot of current compensation patterns for nurse leaders.

This year, a significantly higher percentage of vice presidents, directors, and nurse managers responded, compared to our last survey in 2005. These job titles comprised more than two-thirds of the 600+ respondents.

Approximately 70% of you received an average increase between 2.1% and 5%. Nineteen percent received a meager 0% to 2% raise, while 10% received greater than 5%. Our findings indicate that your average salary adjustment was 3.3%, comparable to 3.2% in 2005. Salaries were higher for every position except CEO/COO, case manager, and nurse manager. (See “Average salary by title.”) Vice presidents, directors, and supervisors saw the most gains. Increases occurred in many different demographics, including location, experience, and education.

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However, other forms of compensation are sorely lacking. We found that an aging workforce has translated to mixed results for retirement benefits. More than two-thirds (68.5%) of your employers match your contribution to your retirement account, but that still leaves 31.5% with no match. Even more worrisome is that an overwhelming majority of you (73.8%) will lose your health benefits from your current employer after you retire.

Some employers are heeding that concern. One respondent said, “We're given a life insurance policy that pays three times our wages.” Another noted several benefits not included in salary: “4 weeks vacation after 4 years, 2 mental health days, 3 personal days, 7 sick days, 7 paid holidays per year, and mileage reimbursement.” And yet another reported receiving a $400 flex spending account after one year, but no bonuses or incentive pay.

Several of you commented on the compression between management and staff paychecks. Said one respondent, “I have nurses under me who make more money than I do as the manager.” “These nurses don't necessarily have more experience,” said another. One respondent reported “too little a difference in the starting salary of a new graduate nurse and one with 10 years' experience.” Another echoed, “Taking a pay cut to be a manager doesn't bode well for succession planning.”

Despite all the talk about pay for performance, more than half of you (52.0%) say a flat percentage, rather than goal achievement, determines your raises, and only 38.3% of you are entitled to a bonus as incentive compensation. One nurse reported a combination approach, with two adjustments per year: one based on performance and one market adjustment.

Not everyone was unhappy; 44.4% said they felt they were compensated appropriately. “Excellent compensation,” said one respondent. “Nurse managers were given an allotment of $450 toward seminar/travel this year.” This respondent also reported flexible hours, a flattened hierarchy, and leadership training. Another respondent revealed that her facility “is always looking into compensation packages and adjusting them accordingly.”

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All about you

Many of you (28.3%) are responsible for budgets between $1 million and $5 million. More than one-third of you (36.2%) are responsible for budgets less than $500,000, and 14.5% of you have budgetary responsibility for $500,000 to $1 million.

About half of you (50.6%) manage up to 50 staff members, while 24.7% manage 51 to 100 employees. You oversee an average of 3.2 units, with many respondents managing one (43.3%) or two to five (41.7%).

We learned that 44.6% of you are certified in nursing administration or your clinical specialty, but this doesn't always pay off with more income. “The organization recognizes staff for certification with a $1,000 bonus each year,” said one respondent, “but directors aren't given the same for their certification.”

The problem of an aging workforce just won't go away. Your average age is now 49.4 years, up from 47.8 in 2005, and the percentage of nurses in each of the age categories from 51 to over 60 rose higher than in the last survey. Salary increases with age, but the amount of increase slows after age 40. One exception: Average salary jumped close to $7,000 from ages 51 to 55 to ages 56 to 60.

Experience often results in higher income, but the difference doesn't always correlate with the years. (See “Years in nursing by average salary.”) For example, those of you with 16 to 20 years' experience earn slightly less than those with 11 to 15 years' experience. You've also held your position longer: an average of 6.7 years, compared to 5.5 in 2005, with nearly 80% (78.4%) in the same position for up to 10 years.

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Higher education prevails, as the number of those with an ADN dropped. Now about 42% of you have at least a master's degree, compared to 34.4% in our last survey. And higher education translates into larger salaries. (See “Education by average salary.”) Salaries were significantly higher this year for every education level except doctoral degree.

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Ethnicity reflected the composition of the current nursing workforce. Most respondents were white (93.8%), and the average experience as a nurse was nearly 18 years, mirroring the aging workforce. We received responses representing every geographic area of the country and Canada.

More men responded (12.1%) than in 2005 (9.6%), which likely correlates with the increased number of men in the profession. Women continue to earn less than men ($83,730 versus $86,710), but have closed the gap to a difference of $2,980, compared to $3,380 in 2005. Disparity was consistent across all titles except for nurse manager and assistant nurse manager, where women earned more than men.

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Location, location, location

Just like in real estate, location matters. Most of you (85.4%) work in a hospital or health system, which is significantly higher than in 2005 (69.0%). Every setting saw salary gains except for community/home health, which dropped from the third highest average salary in 2005 to the lowest-paying. (See “Average salary per work setting.”) The academic setting saw the most gains, and now has the highest average salary of the eight environments, although the number of respondents was low. This may indicate some movement in boosting educators' salaries in response to the need for more faculty.

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More than half of hospital leaders (53.2%) worked in a community, nonprofit setting; the next highest was the private, nonprofit setting (19.9%). Our survey showed salary gains in every type of hospital setting, with the most significant increase in private hospitals and community nonprofit. (See “Average salary by hospital type.”)

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You were fairly evenly divided between the top three work locations of urban (35.1%), suburban (30.9%), and rural (33.7%); 86.8% of you work in facilities with 500 beds or less. All categories of bed sizes saw an increase in average salary. Every region of the country made gains from 2005. (See “Average salary by region.”)

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The number of Magnet facilities continues to rise, so it's not surprising that the number of you working in a Magnet facility increased from 10.5% in 2005 to 12.8% in the current survey. Magnet status still means more money: $88,780 compared to $83,600, a difference of 6.2%, even more than the 4.8% difference in 2005.

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More hours, more money

For the most part, more hours meant more money. Those working 66 to 70 hours reported an average salary of $109,000, compared to $75,360 for those working 40 to 45 hours. (See “Average salary by work hours.”)

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You're working longer shifts, too—almost 1 hour more compared to 2005 (48 versus 47 hours per week). As one respondent said, “Long hours are expected.” Another reported, “RN managers are expected to be on call 24/7/365.” Often the extra hours aren't recognized. “Overtime is discouraged, and we do a lot of work ‘off the clock,’” said one respondent.

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Is increase leveling off?

Although salaries increased across the board, the percentage of increase at the last pay range is cause for concern. (See “Pay raise by title.”) Only three positions had a higher percentage increase in salary at the last pay raise compared to 2005: administrator, vice president, and assistant nurse manager.

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Although significant growth occurred for those with 3 to 5 years' experience and those with 21 to 25 years' experience, there was only mild growth for those of you with 11 to 15 years' or 26 to 30 years' experience. All other experience categories had a decrease. (See “Pay raise by experience.”)

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Could these results indicate a slowdown in salary growth? Time will tell, but one respondent had these sobering thoughts, “We went from the top of contract wages to salary. The bonus was cut in half due to budget. [I] make 30 cents more than assistant nurse at top of scale but work an additional 10 to 15 hours per week.”

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Asking helps — sometimes

This year, we specifically inquired about raise requests. Only 22.2% of you asked for a raise in the past year, and only 26.9% received one. However, that meant that more than one fourth of nurses who asked for a raise are now earning more money, so it pays to ask.

One respondent had a consultant perform a wage analysis. Except for a few nurses who had been at the hospital for more than 20 years, most nurses received raises.

And most of you still make less than your business counterparts: A typical U. S. business development manager grosses $92,905 a year.1

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Dangerous path

Healthcare organizations continue to struggle to meet a positive bottom line. Diminished reimbursement from payors, increased competition, and sizeable salary gains for staff nurses and other allied health professionals have resulted in less available funds for management compensation. This is a fatal flaw in the system, as it deters qualified candidates from seeking management opportunities. We have much to learn from the relatively small number of organizations that are successfully retaining satisfied, veteran nurse managers. As we continue to carefully track compensation issues, we encourage your feedback and sharing of experiences.

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REFERENCE

1. Job Valuation Report. Business development manager. Accessed at:
© 2007 by Lippincott Williams & Wilkins, Inc.