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1 Nursing Management (Springhouse) 2005 by Lippincott Williams & Wilkins, Inc. Volume 36(7), July 2005, pp Salary Survey 2005; Hader, Richard RN, CNA, CHE, CPHQ, PhD ABOUT THE AUTHOR In addition to serving as editor-in-chief of Nursing Management, Richard Hader is senior vice president and chief nurse officer of Meridian Health, Neptune, N.J. Abstract: Nursing Management s seventh annual salary survey offers nationwide data on nurse leaders earnings and provides insight into compensation issues and retention incentives. Nursing Management s Salary Survey 2005 set a record. Over 1,400* of you participated in our seventh annual survey more than doubling last year s response rate. Your feedback represents all nine geographic regions of the United States, as well as Canada. Educators, case managers, and nurse managers accounted for about half of all responses. Same income, different year? Overall, salaries have stabilized, with this year s survey showing an average increase of only 3.2% versus 8.4% in In fact, you reported an average salary of $73,000 this year, representing a mere increase of 1.3% over last year s $72,080. More than half of you (54.7%) earn between $60,000 and $84,999, 26.4% earn less than $60,000, and 11.8% earn between $85,000 and $99,999. (See Average salary by title. ) Vice presidents experienced the greatest salary gain this year, 4.2%, while consultants had the lowest at 2.5%. Nurse managers reported an average increase of 3.8%, but their assistants received a smaller one at 2.6%. (See Pay raise by title. ) TABLE. Pay raise by title

2 As some hospitals begin to institute pay-for-performance programs that align salary growth with improved outcomes, some of you have found this system to negatively impact your increase opportunities. Although we practice pay-for-performance for management and nonunion employees, it really doesn t equate with pay-for-performance, because there s a cap, such as 4% across the board, said one respondent. For a high-performing manager to receive more than 4%, another top performer must get less than that. Further, there s not a standard for earning bonuses based on performance. Nevertheless, some of you see the merit in such a program, reporting that it can be good for everyone to be held accountable, though some things are beyond the individual s control. Magnet makes more Nurse leaders in Magnet-designated hospitals earn more (4.8%) than their colleagues in non- Magnet facilities. Nurse leaders of Magnet organizations earn $76,890 per year, versus $73,000 per year by their non-magnet counterparts. Facilities with Magnet recognition often require their nurse leaders to be educated at higher levels, evaluated on performance outcomes relative to nurse-sensitive patient outcomes, and significant contributors to the community. These requirements may lead to the necessity of paying at higher rates to attract and retain top performers. You and your employer The survey revealed that your average age is almost 48 (47.8) and that you ve been a nurse for approximately 17 years. Roughly 88% of you have held your current position for 5 years or less, and 10.5% hail from Magnet facilities a number we suspect will grow exponentially over the next few years. More than half of you (55.1%) manage up to 50 staff members, while 23.3% supervise up to 100 employees. Many of you (44.5%) oversee one unit, while 39.8% manage two to five units. Regarding departments, the majority of you (56.4%) oversee one, while 32.9% lead two to five. The type of service your facility provides significantly impacts what you earn. Most of you (69%) work in a hospital or health system and earn significantly more than your colleagues who work in other settings, such as outpatient clinics, community health, long-term care, and rehabilitation care. (See Average salary by work setting. )

3 TABLE. Average salary by work setting Nursing experience also markedly affects what you earn. Twenty-seven percent of nurse managers in the field for more than 20 years earn greater than $85,000 per year, while those of you in nursing less than 5 years typically earn less than $54,000 per year. (See Years in nursing by average salary. ) TABLE. Years in nursing by average salary Some seasoned nurses are considering retirement packages as they enter the twilight of their careers.

4 Compensation at our facility is always a hard discussion, said one respondent. In 2007, many of us will take early retirement due to a section of the retirement policy in order to make an increase in monthly income. However, many of us will lose health insurance benefits when that happens. This year, leaders who work in university-affiliated hospitals earned significantly more $80,070 than their colleagues who work in nonprofit private and community hospitals or military-based centers. The largest increase in reported salary from 2004 to 2005 ($3,970) is from those of you who work in military hospitals. (See Average salary by hospital type. ) TABLE. Average salary by hospital type The financial resources available to your facilities impact increases in monetary compensation, or the lack thereof. My freestanding nonprofit visiting nurse agency can t compete with the salaries and benefits offered by large teaching hospitals and hospital-based home health agencies, said one respondent. A lot is done for the recruitment and retention of frontline staff, but not for nurses at the director and vice president level. Regarding gender s impact, this year s results show men s income 4.6% higher ($3,400) than that of their female colleagues. Although results reveal no gender gap in those earning less than $120,000 per year, there s a significant income disparity among those earning greater than $120,000 per year. (See Average salary by gender. )

5 FIGURE. Average salary by gender Unfortunately, verbatim responses strongly indicate little or no economic incentive for assuming leadership positions regardless of gender. Overwhelmingly, you report that your organizations have increased rewards for staff positions but not for managers. In fact, many of you revealed that subordinate colleagues earn substantial salaries and benefits by remaining staff nurses. One respondent described her facility s salary structure as flawed, because a 30-year nurse with a BSN and certification is paid the same as a new graduate. Another shared that she s lost managers because they ve gone back to staffing to make as much money without the management hassles. Another echoed, We have difficulty recruiting managers because the incentive pay for staff nurses often results in a higher wage. Yet some of you are satisfied that you re compensated in ways beyond salary increases. I have no compensation issues, said one respondent. We get extra things, such as leadership training at least four times per year. If we have sick family members or special programs occurring at [our children s] school, we re very flexible about letting people attend. Map matters You re similarly divided between urban (42.1%), suburban (29.7%), and rural (27.1%) settings, and more than 71% of you report that your institution has a bed capacity of 500 or less. Those of you from the country s Pacific region earn significantly more ($88,840) than your colleagues from all other regions, although this amount falls short of your reported 2004 income ($90,590). Consistent with last year s findings, the lowest reported earned income (excluding the other category) is from those of you working in the East South Central region of the country. Here, your average income is $67,290 again, a slight decrease from last year s $68,360.

6 Nurse leaders working in Canada reported an average increase at $7,760, while the New England region offered the most significant increase at $8,650. Those of you from the East and West North Central regions reported an average loss in salary this year, while respondents from the Middle and South Atlantic, West South Central, and Mountain regions made gains. (See Average salary by region. ) FIGURE. Average salary by region Those of you who work in healthcare conglomerates with facilities in both rural and urban centers find that different settings affect compensation. Because we re part of a large healthcare system and our counterparts are urban, it s difficult to convince those who control the salary bands that we have specific compensation issues, said one respondent. Compensation for nurses is competitive for the city hospitals or nursing homes. Education, certification Many of you (35%) have a BSN. Regarding other educational attainment, less than 2% of you have a doctoral degree, 22% have an MSN, 11% have a master s degree in another field, and 22% have an associate s degree or a diploma in nursing. Those of you with a doctoral degree earn the most, at an average of $97,570. Similar to 2004 findings, those with a nonnursing master s degree continue to earn more than colleagues, at $85,300. The lowest reported earner by educational level is the associate s degree-prepared nurse. (See Education by average salary. )

7 TABLE. Education by average salary The American Organization of Nurse Executives recently announced it supports the designation of a baccalaureate degree as the minimum amount of education RNs need to be able to practice. As the BSN becomes the standard, time will tell how much this will impact salaries. For some of you, an advanced level of education hasn t yet made a difference. I m the only nurse manager with a master s degree, said one respondent. The others have their ADN. I don t receive any compensation for having a higher degree. We found that the top five most common national certification or continuing-education courses are advanced cardiac life support, pediatric advanced life support, certified RN, certified operating room nurse, and certified critical care nurse. Based on our findings, certified operating room nurses earn the most of this group, at $76,960. The average certified nurse earns $73,000 per year. Given that this amount is also the average salary for all managers of this survey, some nurses have found that certification offers no financial incentive. In specialized nursing fields, however, the outlook may be more positive. I feel my job as an oncology clinic manager is specialized, as I m well compensated for my degree, said one respondent. My background and years in nursing helped me secure this position. The most common incentive that managers receive is tuition reimbursement (83.1%), followed by paid conference travel (69.7%) and flexible scheduling (47.9%). Retention bonuses for nurse managers remain a scarcity (5.7%), and employers infrequently offer subsidized child care as a benefit (7.4%). Your feedback consistently revealed the need for an increased number of benefits and inclusion of self-select options. Time is money

8 In short, longer hours still mean significantly higher salaries. Those of you with 60-plus hour workweeks earn, on average, $91,443. Your colleagues who work a more manageable 40 to 45 hours a week earn approximately $67,000. (See Average salary by work hours. ) TABLE. Average salary by work hours Most of you (62.7%) continue to be responsible for budgetary decisions of up to $5,000. Eighteen percent of you influence or approve budget decisions of greater than $100,000, which reveals your significant influence over capital expenditures for your organizations. Your feedback overwhelmingly reveals a growing frustration with the lack of economic advantage for leading a department or organization. Despite this, many of you voiced your belief in the importance of management and your desire to help implement patient safety initiatives, such as electronic healthcare records. Some of your facilities balance lower salaries by offering better benefits. Our pay is slightly lower than corresponding facilities in the area, said one respondent. However, our benefits package is one of the best. We have a very positive corporate culture with a strong focus on customer satisfaction. We believe that having satisfied staff leads to satisfied customers. To help managers avoid burnout, proactively retain top talent, especially that of seasoned leaders. Don t underestimate the value of administrative support, which enables you to act as a change agent during periods of stagnant compensation. It s unfortunate when healthcare loses managers because they felt they could go back to staff nursing and make just as much, with all the bonuses and premium pay, without the hassle, lamented one respondent. Instead, create an environment where nurse mangers can thrive, such as this one: This hospital is a very good place to work. They re very competitive in salary, exceptional in benefits, and especially good in further education for all associates. The hospital was responsible for my attaining a BSN.

9 Thank you for your record response to Salary Survey We ll continue to track and evaluate nursing market characteristics, and we encourage you to continue representing the value of your role to your organization. *About this survey Nursing Management s Salary Survey 2005 was published in the January through April issues of the journal and online at from January 1 through April 30. It was also distributed to attendees of Nursing Management s Recruitment & Retention Conference, April 24 to April 26. Franklin Communications, a research firm in Mt. Arlington, N.J., tabulated data from 1,425 respondents.

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