SIOUX FALLS, S.D. — Avera Health is boosting its minimum wage to $17 an hour and providing a range of pay boosts, bonuses and incentives to strengthen its workforce, the South Dakota-based health system announced Wednesday, Oct. 6.

The package of moves, valued at $50 million, is meant to help with retention and recruitment of employees, amid a pandemic-driven workforce shortage, the health system leaders said.

Recent polling indicates nearly one in five health care workers have quit their jobs during the COVID-19 pandemic, and four out of five workers say the resulting national worker shortage has affected them and their place of work, according to a Morning Consult poll released Oct. 4.

Avera Health employs about 20,000 people and its footprint includes six large medical centers, in Marshall, Minnesota, and Aberdeen, Mitchell, Pierre and Sioux Falls in South Dakota, with a total of 35 hospitals and 215 clinics in Minnesota, South Dakota, Iowa and Nebraska.

“Avera has a long history of attracting talented and dedicated people in a wide range of roles: from physicians, nurses and front-line caregivers, to housekeepers and food service workers, to marketing, IT, finance, HR professionals and more,” said Kim Jensen, chief human resources officer for Avera, in a news release. “Like never before, we want to recruit great employees and retain the great employees we already have.”

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Joining the minimum wage boost is a variety of pay raises and bonuses for employees in Avera Health owned and leased facilities:

  • Appreciation gifts
  • Pay increases of at least $2 per hour for current employees (some positions may receive a higher increase based on market)
  • On-call pay increase
  • No annual premium increases for health and dental insurance, cost reductions in select tiers for health insurance
  • $1,000 cash payments to employees who refer someone from outside Avera
  • 40 hours of paid-time off front-loaded for new hires, rather than having to accrue hours over time
  • A new employee discount program

“Avera recognizes that people are our most valued resource. The 20,000 employees of Avera comprise an amazing team,” said Bob Sutton, president and CEO of Avera Health. “Many people have joined Avera because they want to be part of something bigger than themselves and make a positive difference in the lives of others. That’s the Avera mission and we invite like-minded individuals to consider a career with Avera.”

Avera Health's moves on pay and other incentives appear to be in line with an industry wide trend as health care employers fight to keep their staffing levels up by offering sign-on bonuses, pay raises, referral bonuses, one-time bonuses to all employees and improved benefits at a lower cost.

In its annual survey of hospital benefits, industry insurance and benefits consulting firm Aon said that while 2020 was a year of cost-cutting for many health systems, this year the industry is intently focused on its workforce issues amid a pandemic that won't end.

"The top priority in 2020 was to mitigate rising costs for the employer — understandably, given the financial shock that health systems were reeling from," the Aon report said. "Now, the pandemic has exacerbated a labor shortage that could impact patient care delivery, delay attainment of organizational objectives, and accelerate burnout among clinical staff."