Author: Sam Kuhn
Economy-wide breakdown
- At the start of 2025, the labor market looks solid. It grew at a steady rate, averaging 180,000 new jobs a month over a three-month average. Wage growth continues to moderate, trending towards 3.5% as inflationary wage pressures recede and the unemployment rate remains near a historical low of 4.2%.
- Under the hood, though, there are some issues. For one, hiring is very healthcare heavy. In March, 40% of private employment growth was concentrated in healthcare and private education. Outside of healthcare, most industries are experiencing uneven growth grappling with elevated interest rates and heightened uncertainty about trade policy.
- On April 2nd— or “Liberation Day”— President Trump issued a sweeping increase of tariffs that will bring the average U.S. tariff rate to the highest point in more than a century. It includes a 10% across-the-board tariff, affecting all foreign goods imports. The impending fallout from retaliatory tariffs from U.S. trading partners across Europe and Asia will radically shift employment growth in goods-oriented industries like retail, transportation and manufacturing as consumer good prices rise in response to tariffs. Compromises may be reached, and tariffs levels could be lowered.
- In March, Appcast’s Chief Economist Andrew Flowers presented our outlook on the economy in the face of sweeping policy changes. Our base case is a slowdown in economic growth due to immigration and trade policy changes, but not a recession. However, over the past three months consumers’ expectations of inflation have risen rapidly while sentiment around the business environment has deteriorated – a serious warning sign about the future health of the economy. This environment is highly dynamic, and by the time you read this it may be out of date.
Read our economy-wide breakdown of the latest numbers.
Employment Trends
In 2024, the healthcare sector returned to pre-COVID-19 employment levels. Job openings for healthcare workers have remained abundant but are now in a more sustainable place compared to 2022. For every unemployed healthcare worker there’s about 2.6 job openings – a figure that is very close to its pre-pandemic level. The sector is still struggling with acute shortages across all major occupations, but no longer as severe. On Recruitonomics.com, we’ve published a four-part series on the major trends shifting healthcare employment growth in the short and long run that is a must-read for healthcare recruiters.
Starting the year, employment growth has not slowed down at all – in fact it may have picked up the pace. Over three months, average job growth ticked up to 45,000, similar to last summer’s strong growth rate.
Among the subsectors, home healthcare services continue to lead the pack, growing at 8.8% over the year. Ambulatory services (outpatient services) also continue to grow at a steady rate above 3.6%. Hospitals and nursing care facilities have slowed down just a tad but are still growing near 3.5%.
Wage Trends
Wage growth has begun to diverge across the major healthcare subsectors. For hospital workers, it’s accelerating, now growing at 2.2%. However, for home healthcare workers and ambulatory and nursing services, their wage growth has decelerated to a rate below 1%.
This may just be a short-term blip and not indicative of a longer-term trend. In fact, according to new research from economists at the National Bureau of Economic Research, healthcare workers wage growth has outgrown all other workers across the entire income distribution outside of the top 1%!
Openings and Turnover Trends
After two plus years of cooling job openings, the slowing trend may have finally stopped. Openings in the industry have hung around 6% of total employment–still elevated above the pre-pandemic baseline.
Turnover also continues to slowly decline. Layoffs remain ultra-low at just 0.70% of total employment across the sector, while voluntary quits have fallen below 2%, below their pre-pandemic level.
Recruitment Marketing Trends
The term “long” or “ATS apply” refers to the conventional application process, requiring applicants to manually submit their tailored application documents and personal details through the company’s website or an applicant tracking system (ATS). In many cases, applicants are required to create a company-specific account.
On the other hand, “easy apply” refers to a swift application process on a job board, often conducted through a smartphone. With a single click, essential information like the resume is transmitted directly to the company. Due to the simplicity of this application method, easy-apply metrics are not directly comparable to those of the “long” or “ATS apply”. The metrics are therefore presented separately.
Long Apply
Healthcare recruitment costs have bucked the trend of cost declines seen in other industries, and in the first quarter of the year have picked up steam. Demand for mental health workers, behavior analysts, and home health aides remains extraordinarily high. Cost-per-click (CPC) for healthcare workers rose to $1.36, a near record high. Likewise, cost-per-application (CPA) surpassed the $41 mark— the highest level in over two years.
Supply and demand factors can explain these cost increases. Supply for healthcare workers remains ultra-low as the unemployment rate is below 3% while conversions from click to apply have not moved up much at all, still below 4%.
Easy Apply
Wage growth has begun to diverge across the major healthcare subsectors. For hospital workers, it’s accelerating, now growing at 2.2%. However, for home healthcare workers and ambulatory and nursing services, their wage growth has decelerated to a rate below 1%.
The reason for this increase mirrors trends seen with traditional application methods: a declining apply rate. From its peak of 16% in 2024, the apply rate for easy-apply jobs has fallen below 13%, driving up costs as more clicks are required to generate applications. This decline reflects shifting dynamics in candidate behavior and a tightening labor market.
Recruiting Marketing Forecasts
Using Appcast’s weekly historical CPA data, Recruitonomics has created a two-quarter forecast of median cost-per-application for the healthcare sector. CPAs are expected to rise to levels similar to 2022’s due to a competitive hiring environment.
What does this mean for healthcare?
Our first quarter report predicted higher recruiting costs and a continually tightened recruiting environment, which has materialized throughout the year. Job openings were declining through their peak in 2022, but that trend has now stopped. Recruiting costs have returned to levels not seen in over two years. As it stands, supply outweighs demand.
However, potential major change is ahead for the healthcare sector as the federal government weighs cuts to entitlement programs like Medicare and Medicaid. The government has increasingly taken a larger role in paying for healthcare expenditures, and cuts to these programs can dramatically alter recruiting demand. The Commonwealth Fund estimates that the proposed $880 billion dollars in federal cuts would amount to over 135,000 direct healthcare job losses.
By subscribing to Recruitonomics.com weekly newsletter, you can stay up to date on the latest policy changes that impact healthcare recruiting in a period of heightened uncertainty.
Forecasting Methodology
Cost-per-application (CPA) is forecasted two quarters ahead using the previous two years’ worth of one-month moving average data. A combination of ARIMA, exponential smoothing, and seasonal naïve models are used to create an ensemble forecast. The forecast provides both the 95th percentile confidence intervals, indicating the likelihood that each value will be within the CPA range provided.
