Top-Tier Compensation Attracts, Retains Best Nurses at Twin Cities Hospitals
Minnesota has a tradition of outstanding hospitals staffed by great caregivers. Well-trained, highly skilled professionals are among the most important reasons why Twin Cities hospitals consistently rank among the highest quality institutions in the country.
Nationally competitive compensation packages are essential to attracting and retaining the best caregivers, including nurses. The average hourly rate for an MNA nurse working in a Twin Cities hospital is more than $44. Annualized, this rate translates into a salary of $91,693. That’s based on actual earnings from a survey of payroll data at hospitals in the Allina Health, Children’s, Fairview, HealthEast, North memorial and Park Nicollet systems. The Twin Cities hourly rate is significantly higher than the national level. According to the most recent Bureau of Labor Statistics data (2011), the average hourly rate for registered nurses nationally is $29.03. The average annual salary for registered nurses working full time is $60,390, according to BLS data.
Average Annual Salary for Minnesota Professionals
Nurses working full-time in Twin Cities hospitals earn nearly $80,000 annually, according to 2010 data. By comparison, here are average salaries for some other Minnesota professionals:
Accountants and auditors
Human resources, training, labor relations
Compensation, benefits, jobs analysts
Personal financial advisors
Computer systems analysts
Postsecondary math, science teachers
Bureau of Labor Statistics, “May 2011 State Occupational Employment and Wage Estimates, Minnesota”
In fact, Twin Cities nurses earn significantly more than most Minnesotans and are among the best paid professionals in Minnesota. The median household income in 2010 in Minnesota was $57,243, according to the U.S. Department of Census.
In addition to the base pay, a full-time nurse working in a Twin Cities hospital can earn additional money through shift differentials (higher pay for certain shifts), overtime, weekend bonuses and longevity pay. Nurses in Twin Cities hospitals also have an attractive package of health benefits and earn a guaranteed pension. According to Salary.com, on average, a registered nurse’s wages make up roughly 70 percent of total compensation. Benefits add about 30 percent to each nurse’s total compensation package. That means the total compensation of an average full-time Twin Cities nurse is nearly $102,700.
A defined benefit pension plan – a retirement program that provides a guaranteed annual income – is becoming increasingly rare in the private marketplace. A study by the consulting firm Mercer found that the prevalence of qualified defined benefit plans has declined by 30 percent from 2007 to today. A Towers Watson study found that in 2010, only 17 percent of Fortune 100 companies – the nation’s largest private sector employers – offered a defined benefits plan. The trend, said Mercer, is to enroll new employees in defined contribution plans. In these plans, the employer may contribute to an employee’s retirement account, but lifelong benefits for the worker are not guaranteed.
Twin Cities nurses are fully vested after working 1,000 hours per year (an average of less than 20 hours per week) for five years. They are able to retire on full benefits at age 65 and take early retirement as soon as age 55. A nurse who meets the “Rule of 85” – a nurse whose combined age and years of service equal 85 – is able to retire with no reduction in benefits.
The attractive package of wages, benefits and pension has made it possible for Twin Cities hospitals to recruit and retain the highest skilled nurses. There are challenges for the future, though. A partnership of Minnesota government agencies, higher education institutions and others that track employment trends in the state predicts that while the demand for registered nurses in the Twin Cities will grow by more than 23 percent between now and 2020, much of the growth will occur outside of hospitals. The group, iSeek, recently made this forecast: “The number of jobs in hospital nursing is expected to grow more slowly than in other settings. This is because patients are being released earlier from hospitals. As a result, rapid growth is expected in home health care and nursing homes.”
The demand for fewer nurses working in hospitals and the pressure from payers – both government programs and private insurers and employers – to reduce costs will require innovative thinking and collaboration between nurses and hospitals. The new environment will require bold solutions, but the commitment to quality care delivered by highly-skilled caregivers will form the basis for new answers.