REGISTERED NURSE: OCCUPATIONAL SKILL SHORTAGE ASSESSMENT

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1 NOVEMBER 2005 REGISTERED NURSE: OCCUPATIONAL SKILL SHORTAGE ASSESSMENT Current Situation: Recruitment and retention difficulties Short-term Outlook: Recruitment and retention difficulties (improving) 1 Executive Summary 1.1 Results from the 2004 Survey of Employers who have Recently Advertised indicate that employers have difficulty filling vacancies for registered nurses in New Zealand. Only 63% of vacancies were filled within eight to ten weeks of advertising and there was an average of only 1.1 suitable applicants for each vacancy. However, there does not appear to be a shortfall in the Table 1: Employer Survey Indicators, 2004 Fill rate Average Number of Suitable Applicants Registered Nurses 63% 1.1 All Professionals Surveyed 56% 1.7 Source: Survey of Employers who have Recently Advertised, Department of Labour. number of trained nurses in New Zealand. Rather, the Department of Labour believes there is a shortage in the number of registered nurses who are prepared to take up work under current pay and employment conditions. In 2003, there were 4,452 registered nurses with annual practising certificates who were not actively employed in nursing or midwifery. This occupation is thus described as having recruitment and retention difficulties rather than having a genuine skill shortage. 1.2 The employment of registered nurses grew slowly by 0.8% per annum between 1991 and 2001, which is low compared to doctors and other health professionals. Available data suggests that the growth in the employment of registered nurses has remained weak over the past four years. The Department of Labour expects that employment growth for nurses will remain moderate in the short term. In the long term, however, there is likely to be strong growth in the demand for nurses, with the ageing of the New Zealand population. 1.3 The number of new nursing graduates fell strongly in the late 1990s, and has continued to slowly decrease since then. However, a comparison of graduate output with the number employed in the nursing workforce, suggests that training levels are still adequate. The pool of New Zealand trained nurses has, on average, been supplemented by positive net migratory inflows since 1994, Unisys House, 56 The Terrace, PO Box 3705, Wellington, New Zealand. Tel Fax

2 2 with an increasing proportion of nurses active in the labour market being overseas trained. 1.4 The Department of Labour considers occupational detachment (employees who voluntarily leave an occupation) to be a key issue for this profession, given that a significant number of registered nurses are exiting from active employment in the profession. The percentage of registered nurses and midwives remaining active in the profession in the first three years after initial registration declined to 60% in 1998 from 81% in In 2003, there were 4,452 registered nurses and midwives holding annual practising certificates who were not actively employed as nurses or midwives. Salaries and working conditions are factors which have been identified as influencing decisions to remain active in the profession. 1.5 Recruitment and retention difficulties for nurses are expected to ease somewhat over the next few years as more nurses are encouraged to take up active employment in the profession. A key factor affecting this is likely to be the increase in pay (up to 20%) for registered nurses employed by District Health Boards, following the recent pay settlement between the District Health Boards and the New Zealand Nurses Organisation.

3 3 2 Introduction 2.1 The purpose of this report is to investigate skill shortages for registered nurses in New Zealand. The report aims to assess whether there is a shortage, and to provide an insight into demand and supply factors contributing to this situation. It also offers a short-term outlook for shortages in this occupation group. 2.2 Registered nurses assess the health care needs of and provide care to individuals, families and communities. They are the largest group of health professionals comprising about 65% of this workforce 1. Registered nurses usually work collaboratively with other health care professionals but they can also work independently. In New Zealand, registered nurses work in a wide range of areas including child health services, residential care facilities, mental health services, public health services, occupational health and safety, sexual health services, and in prisons. 2.3 Further background to this occupational report, including a discussion of the methodology; a glossary of terms; and an overview of the Department s Survey of Employers who have Recently Advertised (SERA), including the survey questionnaire, can be found in the Background and technical note at Note on Occupational Classification The Department of Labour (the Department) has defined registered nurses under the New Zealand Standard Classification of Occupations (NZSCO) categories of principal nurses, registered nurses, psychiatric nurses, Plunket nurses, public health and district nurses, and occupational health nurses. These are the five digit code categories of to Accordingly, our definition includes comprehensive registered nurses as well as single registration nurses 2. It also includes senior nurses who plan, control and supervise nursing services in hospitals, clinics and other health care establishments in the community. The definition does not include associate professional nurses, such as enrolled or Karitane nurses Certain data sources, such as External Migration and the Household Labour Force Survey (HLFS) are only available at the broader 3-digit category of nursing and midwifery professionals. In addition, some data from the New Zealand Health Information Service (NZHIS) and the Nursing Council of New Zealand (NCNZ) are only presented under the category of registered nurses and midwives. Nonetheless, the Department believes that these broader categories will provide a very good indication of outcomes for registered nurses, as registered nurses dominate numbers employed in both of the above categories. In the 2001 Census, registered nurses accounted for around 93% of the nursing and midwifery professionals category. 1 2 Statistics New Zealand, Census of Population and Dwellings Single registration nurses have restrictions regarding the clinical areas in which they are able to practise. For instance, psychiatric registered nurses can only practice in psychiatric mental health nursing, while a general and obstetric nurse can only practice in general and obstetric nursing.

4 4 3 Demand for Nurses 3.1 Historical Demand Employment for nurses grew moderately between 1996 and 2001 (1.8% per annum), having fallen slightly in the previous five years (see Table 2). Over the ten year period, employment rose by an annual average of just 0.8%. This growth was significantly lower than that for medical doctors and all health professionals (excluding nurses and midwives) over the same period. Table 2: Employment for Registered Nurses, Annual Growth in Employment Registered Nurses -0.3% 1.8% 0.8% Medical Doctors 2.0% 3.5% 2.8% All Health Professionals (excluding nurses and midwives) 0.6% 3.5% 2.1% All Professionals 2.7% 4.0% 3.4% Source: Census of Population and Dwellings, Statistics New Zealand It is likely that employment growth for registered nurses has been modest since Data from both the HLFS and the NZHIS suggest that employment growth of nurses remained weak over the period from 2001 to Future Demand Employment growth for nurses in New Zealand is likely to remain moderate over the next few years, with the continuation of current trends In the longer term, employment growth for nurses is likely to be strong, given the expected increase in the number of elderly people in New Zealand. Statistics New Zealand Population Projections for 2004 indicate that the number of people in New Zealand aged 65 and over is expected to be 1.33 million by 2051, 2.7 times the 2004 total. The largest growth will occur between 2011 and 2037 as the baby-boomers move into this 65+ age group. From 2039, the 65+ age group will make up about one-quarter of all New Zealanders, compared with 12% in Ministry of Health statistics show that, on average, the elderly tend to require more health care than younger people. In 2002, around 39% of health expenditure was for the 12% of population aged 65 and over According to the HLFS, the number of registered nurses and midwives fell by 1.4% per annum between the year to March 2001 and the year to March However, given the small sample size of the HLFS, its estimates for this occupational group tend to be volatile and accordingly, not very reliable over the short-term. Data from the NZHIS have also indicated that the number of active registered nurses rose very slightly in 2002 and then fell by around 1% in 2003, with active nurses defined as those who are actively working in nursing in New Zealand. However, the number of individuals not responding to the questions relating to active in nursing in New Zealand status increased strongly in Accordingly, the results for 2003 should be interpreted with caution. Ministry of Health, Health of Older People in New Zealand: A Statistical Reference, 2002.

5 5 3.3 Summary Employment of registered nurses grew slowly by 0.8% per annum between 1991 and 2001, which is low compared to doctors and other health professionals. Available data suggests that growth has remained weak over the past four years, and the Department expects moderate growth to continue in the short term. In the long term, however, there is likely to be strong growth in the demand for nurses with the ageing of the New Zealand population. 4 Supply of Nurses 4.1 Nursing Graduates Data from the NCNZ indicates that the number of nursing degrees awarded in New Zealand 5 fell considerably between the mid-1990s and the late 1990s (see Table 3). The number of individuals achieving nursing degrees has continued to fall, but at a slower rate, in recent years 6. Table 3: Total Number of Nursing Degree Graduates in New Zealand Year Nursing Graduates Source: Nursing Council of New Zealand The decline in degree achievements is reflected in a declining training rate. The training rate is a measure of training output relative to employment in the occupation and is a rudimentary measure of the rate at which supply can potentially grow through training. The training rate for registered nurses declined gradually from 4.5% in 1996 to 3.1% in At 3.1% the training rate is one of the lowest among professional occupations analysed by the Department. However, the training rates over this period are significantly higher than growth in employment, suggesting that the level of training is adequate. Furthermore, the 2003 training rate for nurses in New Zealand is higher than the equivalent training rate of 2.4% in New South Wales, Australia Since 1992, the only pathway to gaining a New Zealand registered nurse qualification has been to complete a nursing degree. In 2000 around 19% of New Zealand registered nurses had a nursing degree according to the NCNZ. Note that these figures will include a small percentage of individuals who have undertaken further study to move from holding a single registration (such as psychiatric nurses) to becoming a comprehensive nurse. In 1998, around 5% of the above graduates already held a single registration. In this report, comparisons are made between New Zealand and New South Wales, Australia to contextualise the findings. Given that there are no national level estimates of training rates available, state-level data have been used. New South Wales is Australia s most populous state with the largest

6 6 Table 4: Training Rates for Registered Nurses, 2003 Indicator Explanation Registered Nurses (NZ) All SERA Professionals Surveyed (NZ) Registered Nurses (NSW, Australia) Training Rate Number of persons achieving a relevant qualification expressed as a percentage of employment in that occupation 3.1% 5.5% 2.4% Source: Department of Labour (New Zealand), Department of Employment and Workplace Relations (Australia). 4.2 Migration General Migration data from Statistics New Zealand shows net migration has contributed an average of approximately 110 registered nurses and midwives each year to supply since While it has fluctuated from year to year, it was positive for seven of the eleven years since The factors contributing to this phenomenon are outlined below. Table 5: Permanent and Long-term Arrivals, Departures and Net Migration of Nursing and Midwifery Professionals, December Year End Arrivals Departures Net Migration Source: External Migration, Statistics New Zealand New Zealand Trained Nurses The number of nurses and midwives leaving New Zealand rose strongly in the eight years to December 2002 (see Table 5). However, in the last two years, this number has been lower (down by around 13%), but still remains at a high level. The number of individuals requesting verifications by the NCNZ for registration with an overseas authority has also risen significantly 8. In 2003, 1,867 individuals requested verifications, compared with 664 in The main destinations for New Zealand trained graduates were the United Kingdom and Australia. Data from the NZHIS and the NCNZ suggest that the percentage of New Zealand trained nurses living overseas has increased 9. Overseas pay rates can be higher than those in New Zealand. Research undertaken by the New Zealand Nursing Organisation (NZNO) and the University Students Association suggest that a significant number of nurses are leaving New Zealand to pay off their student loans more quickly. Respondents to the 8 9 economy and its economy most closely resembles the structure of the New Zealand economy. It was thus deemed to provide the most suitable jurisdiction for labour market comparisons. Not all individuals seeking verifications may actually leave the country. The data may include both New Zealand trained and some foreign trained nurses. Data from the NZHIS and the NCNZ indicate that the number of nurses living overseas rose from 5.3% to 5.9% over this period, or by around 300 people. These figures may underestimate the number of nurses living overseas as some of these individuals may no longer be registered in New Zealand.

7 7 survey had an average total debt on graduation of $19, A 2003 survey by the Ministry of Health indicated that 25% of nursing education institutions, particularly in Auckland, had visits from Australian recruitment agencies to recruit New Zealand graduates 11. Around half the nursing class at the University of Auckland were accepted in positions in Australia, following this recruitment drive. Employers responding to the Survey of Employers who have Recently Advertised (SERA) raised similar issues. A recent survey by the Ministry of Health indicated that the number of New Zealand trained nurses who had just returned from overseas and returned to clinical practice over a two year period was reasonably low just under 300 people, or around 13% of those returning to active nursing Overseas Trained Nurses A strong increase in the number of nurses and midwives leaving New Zealand has tended to be offset by a strong increase in arrivals from overseas. The number of permanent and long-term arrivals of registered nurses and midwives has increased strongly since The percentage of actively working nurses and midwives who are overseas trained has increased to around 21.6% in 2004 from 16.3% in A recent international study, Aiken et al. (2004) 14, indicated that although countries such as the United States, United Kingdom, Canada and Australia are actively recruiting foreign nurses, New Zealand had a relatively high dependence on overseas trained nurses. The percentage of overseas trained nurses in New Zealand was higher than that of any other country analysed. Most overseas nurses and midwives in New Zealand come from the United Kingdom, but in recent years there has been a strong increase in the number of nurses arriving from the Philippines, the Pacific Islands, South Africa and India. Employers who responded to the SERA indicated that there were at times language and cultural issues with overseas trained nurses. In addition, overseas qualifications were not always of the same standard as New Zealand qualifications. Data on the number of nurses leaving New Zealand also includes departures by overseas trained nurses. The retention rate for overseas trained nurses in New Zealand has increased in recent years but it is still significantly lower than that for New Zealand trained nurses. According to the NCNZ, around 45% of This survey of registered nurses and midwives was undertaken in The research also indicated that over 60% of respondents had considered going overseas because of their student loan debt, and 22% had considered leaving nursing because of their student debt. In 2003, annual fees for bachelor of nursing ranged from around $3,000 to $5,000 for the 16 polytechnics offering these courses. The Australian working conditions include 6-8 weeks holiday, AUD$39,000 plus penal rates, travel support, and access to a new graduate programme which on completion provided 12 credits to a Masters programme. Ministry of Health, Return to Nursing Survey-Report on Registered Nurses who have Returned to Clinical Practice, August NZHIS. These figures exclude active nurses and midwives who did not report whether they were New Zealand or overseas trained. Note that there were significant differences in this figure between 1998 (2%) and 2003 (7%). Accordingly, it is possible that the fall in the percentage of New Zealand trained midwives could be lower than that presented here. Linda H. Aiken, James Buchan, Julie Sochalski, Barbara Nichols and Mary Powell, Trends In International Nurse Migration, Health Affairs, Vol. 23, Number 3, June 2004.

8 8 overseas nurses remained active in nursing in New Zealand in the first three years after registration in 1998, compared with 36% in This compares with a retention rate of around 60% of New Zealand nurses in Registration In order to practise nursing in New Zealand, nurses need to be registered with the NCNZ. Table 6 shows that total new registrations in 2003 were around the same level as in New registrations tended to fall in the late 1990s, before rising in the early 2000s. Registrations of New Zealand trained nurses fell over the period 1996 to 2003, reflecting a fall in the number of new nursing graduates. The number of new registrations of overseas trained nurses peaked in 1998, and then started to rise again in early In 2002 and 2003, registrations of overseas trained nurses were higher than registrations of New Zealand trained nurses. Table 6: New Registrations for Registered Nurses and Midwives Year New Zealand Trained Overseas Trained Total Source: Nursing Council of New Zealand Annual Reports Once registered, a nurse wishing to practise must obtain a practising certificate on an annual basis from the NCNZ. The number of registered nurses holding annual practising certificates (APCs) gives an indication of the supply of nurses in New Zealand 15. Fluctuations in the number of registered nurses holding APCs reflect all the factors influencing supply, including migratory flows and movements into and out of the occupation due to retirement, occupation change and withdrawal from the labour market. NZHIS data indicates that the supply of nurses has fluctuated from year to year, and has grown slowly over the period between 1998 and Since 1998, the supply of nurses has increased on average by 1.5% per annum By purchasing an APC, individuals are indicating that they are interested in participating in the nursing workforce even though they may not be actively employed in nursing. It is still possible that this data may understate the potential supply of nurses as some nurses may have let their APCs lapse and are still planning to return to nursing. This data may slightly underestimate the number of registered nurses and midwives with APCs prior to 2001, as it does not include the small percentage of individuals who did not respond to the annual workforce survey. The response rates of all nurses and midwives (including enrolled nurses) were 99.4% in 1998, 98.6% in 1999 and 97.8% in From 2001 onwards, it became compulsory for nurses to respond to the annual workforce survey. Note, however, the supply of nurses grew slowly even after taking into account an estimate of this discrepancy.

9 9 Table 7: The Number of Registered Nurses and Midwives Obtaining Annual Practising Certificates No. of APCs Obtained 40,716 39,936 42,482 41,893 42,281 43,943 Annual % Change % 6.4% -1.4% 0.9% 3.9% Source: New Zealand Health Information Service, and the Nursing Council of New Zealand. 4.4 Occupational Detachment The percentage of New Zealand trained nurses and midwives remaining active in the nursing profession in New Zealand in the first three years post registration declined to 60% in 1998 from 81% in Other countries such as the United States, the United Kingdom, Australia and Canada have also had similar issues with the recruitment and retention of nurses The NZNO recently estimated that New Zealand has a nursing shortage of around 2,000 nurses in the public sector 19. Ministry of Health data indicates that a total of 4,452 registered nurses and midwives in New Zealand held APCs in 2003, but were not actively employed in nursing or midwifery 20. However, a survey in 2000 of 2,071 registered nurses who had paid for an APC but were not in clinical practise, found that 76.1% of respondents would consider returning to the clinical workforce 21. The most often reported factors that would assist registered nurses and midwives to return to clinical practise were: more flexible hours of work, availability of return to work programme, a salary increase, and the provision of childcare services A subsequent survey by the Ministry of Health in 2003 indicated that a total of 2,807 registered nurses and midwives had returned to work in the last two years 22. It did not indicate how long individuals had been inactive. Key factors motivating them to return to work included the provision of childcare facilities and a change in family circumstances Occupational detachment refers to individuals who choose not to continue practising in their occupation but retain a connection to the occupation (e.g. move into a management or supervisory role, or retain professional registration), or who leave the occupation entirely (e.g. by changing occupation or withdrawing from the labour market). Health Workforce Advisory Committee, The New Zealand Health Workforce: A Stocktake of Capacity and Issues 2001, April This estimate is based on a 5% nurse vacancy rate in DHBs. The NZNO believe that this figure is conservative as some DHBs have a higher vacancy rate. Ministry of Health, Return to Nursing Survey-Report on Registered Nurses who have Returned to Clinical Practice, August NZHIS, Non-Practising Nurses and Midwives 2000, 2000 Ministry of Health, Return to Nursing Survey-Report on Registered Nurses who have Returned to Clinical Practice, August 2004.

10 Retirement Based on 2001 Census data, it is estimated that 1.1% (approximately 365) of the registered nurse workforce retires each year. This is slightly lower than the average retirement rate for all professional occupations (1.3%). Census data shows an ageing of registered nurses occurred between 1991 and 2001 (see Figure 1). In 2001, only 25% of all registered nurses were aged under 35 Figure 1: Age Profile of Registered Nurses, Source: Census of Population and Dwellings, Statistics New Zealand. years compared with 38% in The percentage of nurses aged 40 years or more rose from 46% to 61% between 1991 and As the nursing workforce ages, the number of nurses retiring each year will increase. 4.6 Future Supply The recent pay settlement between the District Health Boards (DHBs) and the NZNO is likely to positively influence nurse retention and encourage trained nurses to return to the labour force. In the longer term, it is expected to encourage more individuals to practice nursing in New Zealand. Under the latest settlement, nurses employed by the DHBs will receive a significant pay increase (up to 20%) 23. This increase will be phased in by July Around 58% of all active registered nurses and midwives (around 19,000 individuals) were employed by the DHBs in 2003, according to NZHIS and NCNZ figures. The new pay rates for registered nurses will range from $40,000 (grade step 1/new graduate nurse) to $54,000 (grade step 5). This compares with a pay scale of around $33,917 to around $45,000 previously. Senior nurses pay rates will range from $57,330 to $80,000, compared with $54,600 to $74,766 previously. In the longer term, there is likely to be supply issues for nurses in New Zealand as there will be greater competition for nurses from other countries such as the United States, Canada, the United Kingdom and Australia. These countries are currently facing retention issues and nursing shortages, with these shortages expected to grow. 23 The pay settlement was ratified by NZNO members in February Most of the pay increase (more than 75%) will come from extra funds for the DHBs provided by the Government. The DHBs will only pay what they would normally expect to pay on completion of a wage round. Accordingly, the settlement is not expected to have the effect of reducing the number of nursing staff that DHBs are able to employ.

11 Summary The number of new nursing graduates fell strongly in the late 1990s. However, a comparison of graduate output with the number employed in the nursing workforce, suggests that training levels are still adequate (training rate of 3.1%). The pool of New Zealand trained nurses has, on average, been supplemented by positive net migratory inflows since 1994, with an increasing proportion of nurses active in the labour market being foreign trained. However, there appears to be a significant number of nurses leaving the workforce. The recent pay settlement between the DHBs and the NZNO is likely to improve nurse retention. The agreement has resulted in significant pay increases (up to 20%) for registered nurses employed by the DHBs. 5 Employer Recruiting Experiences the Survey of Employers who have Recently Advertised 5.1 Overall Shortage of Registered Nurses Results from the 2004 SERA show that only 63% of vacancies for registered nurses were filled within eight to ten weeks of advertising which was similar to the overall fill rate for all health professionals surveyed (59%). There were only 1.1 suitable applicants per vacancy, the same figure as that for all health professionals surveyed, but lower than the figure for all professionals surveyed (1.7). Table 8: SERA Results for All Occupations, July 2004 Number of Employers Number of Vacancies Number of Vacancies Filled Fill Rate Number of Suitable Applicants Average Number of Suitable Applicants per Vacancy Registered Nurses % All Health Professionals Surveyed All Professionals Surveyed % % Source: Survey of Employers who have Recently Advertised, Department of Labour. 5.2 New Vacancies or Turnover Employers surveyed for the SERA were asked if the registered nurse vacancies advertised were for a new or existing vacancy. Nearly all (95%) of the job advertisements were for existing vacancies (compared with an average of 69% for all professionals surveyed). This suggests that turnover in the profession is high and employers have difficulty in retaining registered nurses. The recent pay settlement between the DHBs and the NZNO should help ease these recruitment and retention difficulties.

12 Recruitment and Retention Issue rather than Genuine Skill Shortage Despite employers not being able to fill a considerable number of nursing vacancies, data suggests that there does not appear to be a shortfall in the number of trained nurses in New Zealand. Rather, there is a shortage in the number of registered nurses who want to take up work as nurses under current pay and employment conditions. This condition is thus described as a recruitment and retention difficulty rather than a genuine skill shortage (see Box 1 for definitions). Box 1: Skill Shortage Definitions Genuine skill shortage Occurs when employers have difficulties filling their job vacancies because there are not enough individuals with the required skills in the potential labour force to fill the positions on offer. Recruitment and retention difficulty Occurs when there is a considerable supply of individuals with the required skills in the potential labour market but they are unwilling to take up employment at current levels of remuneration and conditions of employment. Retention problems are often a major contributor to this condition. 5.4 Changes in Market Conditions The Department s Job Vacancy Monitor indicates that the number of advertised nursing vacancies tends to fluctuate but has shown an upward trend The Job Vacancy Monitor recorded 39% more advertised 80 vacancies for nurses in 2004, 60 compared with As employment growth was slow in 0 this period, the increase suggests that recruitment conditions may have become more difficult for employers in 2004, and as a consequence they have had to increase their levels of advertising to fill vacancies. 6 Outlook Figure 2: Advertised Nursing Vacancies, Jan-03 Mar-03 May-03 Jul-03 Sep-03 Nov-03 Jan-04 Mar-04 May-04 Jul-04 Sep-04 Nov-04 Source: Job Vacancy Monitor, Department of Labour. 6.1 Recruitment and retention difficulties for nurses are expected to ease somewhat over the next few years as more nurses are encouraged to take up active employment in the profession. A key factor affecting this is likely to be the increase in pay for nurses employed in DHBs, following the recent pay settlement between the DHBs and the NZNO. For queries regarding this report please contact 24 Note, that this data series is not seasonally adjusted as it is currently a very short time series.

13 13 Disclaimer: The Department of Labour has made every effort to ensure that the information contained in this report is reliable, but makes no guarantee of its accuracy or completeness and does not accept any liability for any errors. The information and opinions contained in this report are not intended to be used as a basis for commercial decisions and the Department accepts no liability for any decisions made in reliance on them. The Department may change, add to, delete from, or otherwise amend the contents of this report at any time without notice. The material contained in this report is subject to Crown copyright protection unless otherwise indicated. The Crown copyright protected material may be reproduced free of charge in any format or media without requiring specific permission. This is subject to the material being reproduced accurately and not being used in a derogatory manner or in a misleading context. Where the material is being published or issued to others, the source and copyright status should be acknowledged. The permission to reproduce Crown copyright protected material does not extend to any material in this report that is identified as being the copyright of a third party. Authorisation to reproduce such material should be obtained from the copyright holders.

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