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Staffing Crunch Forcing Labs to Raise Wages


NEW YORK – While staffing shortages are one of main challenges facing the lab industry, some employees are seeing a benefit in the form of rising compensation.

That is particularly true for certain specialties like molecular testing and blood banking, said Austin Dickson, business development manager at Raleigh, North Carolina-based Lighthouse Lab Services.

According to the US Bureau of Labor Statistics, the country will see demand for medical lab technologists increase by 13 percent by 2026. That compares to an anticipated baseline 7 percent increase for all occupations.

The US Department of Health and Human Services' Human Resources and Service Administration, meanwhile, puts the projected increase in demand for clinical lab techs at 22 percent by 2025.

The American Society for Clinical Pathology's most recent vacancy survey, conducted during 2018, found that vacancy rates were up (compared to the 2016 ASCP survey) for 12 of the 17 lab areas examined, with phlebotomy having the highest vacancy rate at around 13 percent and point-of-care the lowest at around 4 percent.

The vacancy survey also found evidence of upward pressure on compensation, with 51 percent of respondents reporting that their top challenge in hiring personnel was competing with better pay or benefits at other labs. Since then, the continued growth of the US economy and falling unemployment rates have further tightened the lab labor market, said Matthew Schulze, director of government relations at ASCP.

"There aren't a lot of workers out there to hire, and so in order to attract people you have to pay more," he said. "We're certainly seeing that with some occupations in the laboratory realm."

During Quest Diagnostics' Q4 earnings call last month, CFO Mark Guinan said that the company had seen "rising wage pressure" due to the tightening labor market.

Quest President, Chairman, and CEO Steve Rusckowski noted that the firm was primarily seeing this pressure at what he called "the front end of our value chain," meaning positions like couriers and specimen processing where it competes for workers not only with other labs but also with employers outside the lab industry.

He said the company was feeling pressure in some geographies "to up our wages more than we have historically because we have to be competitive with other competitors for those resources."

Guinan said phlebotomy was also an area where the company was seeing staffing and wage pressures, in line with the ASCP survey findings of high vacancy rates in this lab area.

Laboratory Corporation of America also noted higher personnel costs during its Q4 2019 earnings call, with CFO Glenn Eisenberg citing these costs as contributing to a decline in adjusted operating income and margin. He said, however, that these costs were not rising for the company more rapidly than normal.

Though Quest largely highlighted increased competition for employees in roles ancillary to lab work, certain positions within the lab are also seeing upward pressure on wages, Dickson said.

In particular, lab professionals with expertise in molecular testing, microbiology, and blood banking are in demand, he said.

"Those areas are all very hot right now, and the salaries that some laboratories are offering have been very impressive," he said.

For instance, he added, while a generalist lab technologist in a hospital setting might make around $55,000 in a typical market, someone with expertise with molecular platforms like PCR might command around $70,000 or $75,000 in the same market.

This trend has "started to come to a head" in recent years, Dickson said, noting that while the supply of lab technologists with molecular expertise is rising, there still aren't enough to meet the current demand. In part, this is because molecular techniques are comparatively new, which means that many older lab employees were never trained in them, said Dickson's Lighthouse colleague Maggie Morrissey, the firm's director of recruiting and staffing services.

"The more senior [technologists] are often more knowledgeable around other specialties," she said.

Dickson said that while labs can hire generalists and teach them the molecular methods they require, most prefer to hire someone with a background in molecular work.

"There's a lot of training on the job, but with some of the troubleshooting and helping with reporting, it's vital [that employees] have the education and experience with molecular testing," he said, adding that the variety of molecular expertise required by labs adds to their staffing challenges.

"Someone might need a scientist who has experience doing [next-generation sequencing] on an Illumina platform, but [a candidate] may only have experience with a BD Max [PCR system] or a Thermo NGS system," he said. "I think some of the specialization within the instrumentation that is out there in the market has led to the segmenting of scientists, as well."

This goes beyond the molecular space, he added, noting that as the various parts of the lab have become more siloed and specialized, it has become more difficult to find technologists with expertise in multiple areas.

"Some of these specialties are getting so deep that it is hard to be fluid enough to be able to be proficient in everything," he said. "Someone in a hospital laboratory who can do a variety of core services, molecular testing, and microbiology — that would be a pretty impressive scientist. That is pretty rare these days."

Morrissey agreed. "We call them unicorns," she said.

This increased specialization along with an aging workforce and the strong draw of molecular work for new graduates and younger technologists is contributing to demand in other specialties as well, with blood banking particularly prominent according to Dickson.

"A lot of former core services [technologists] or generalists had a lot of blood banking experience, but we're not seeing as many new grads with that specialty right now," he said. "Generalists with blood banking experience are in high demand right now."