IOWA CITY — As finding and keeping in-demand nurses and other health care staffers becomes increasingly difficult in a hypercompetitive market, University of Iowa Health Care announced Tuesday it will award midyear raises to some 2,750 employees.
The “midyear market adjustment” — going in to effect Friday — will impact about 2,450 UIHC nurses and about 300 employees in other classifications for medical lab scientists, social workers and specialized imaging technologists who work in areas like CT, MRI, and nuclear medicine.
The raises range from .25 to 6 percent — depending on the employee’s pay, length of service and specific job, according to a UIHC document on the raises.
The adjustment is expected to cost the university more than $2.5 million this fiscal year, which UIHC Chief Executive Officer Suresh Gunasekaran said will come from the enterprise’s operating budget.
The university has built a comfortable operating margin after in 2017 reporting a deficit that prompted cost cutting and efficiencies.
“We certainly believe we can afford it for the rest of this year, but you always have to do an analysis of what does this mean to every subsequent year,” Gunasekaran said. “We think we have made enough financial progress that this is sustainable.”
The midyear raises won’t affect traditional pay increases that come at the end of a budget year — including the one coming in June 2020.
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In deciding which job classifications warrant salary adjustments, administrators looked at which had higher turnover rates, reported a market shortage and have seen “salary compression” — when pay for new employees goes up faster than rates for incumbent workers.
“As more Iowans than ever seek care at UI Health Care, it is important that we recruit and retain the best talent,” Gunasekaran said. “In order to continue to provide outstanding care for our patients, we also must take care of our own staff.”
Cathy Glasson — president of the Service Employees International Union, which represents about 3,800 UIHC nurses and health care workers — said she and her staff are digging into the news to determine what it will mean for members.
“We have been pushing this with UIHC administration ever since the completion of union negotiations,” Glasson said. “Just last month we raised the issue again.”
The announcement comes after union representatives slammed what they call an unfair bargaining process that stripped them of rights to negotiate vacation and sick leave policies — changes allowed under a 2017 state law limiting bargaining rights of public sector unions.
The union last year sent the university a letter accusing it of breaking the law by delaying “extra time” payments for nurses, and urging the administration to halt the practice.
The university rejected allegations of wrongdoing, and a UIHC spokesman told The Gazette that because UIHC nurses are salaried — not paid hourly wages — they aren’t entitled to overtime pay anyway.
“Although not required by their contract or law, we choose to pay extra compensation to those who take on extra hours,” UIHC spokesman Tom Moore said.
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Still, nurses have told The Gazette that changes in how the university pays them have prompted many to leave or reject requests to work extra shifts, even as the hospital grows increasingly full and continues to stretch its resources.
Nursing, additionally, has become an increasingly in-demand job nationally, with a dearth of instructors limiting the number of nursing students admitted to colleges and universities.
That has some hospitals and health care facilities — including UIHC — reliant on “traveling nurses,” those who earn premium salaries — but not benefits — to go where they’re needed for as long they’re needed.
Although the university has spent tens of millions on traveling nurses in recent years, it has cut its use in an attempt to hire staff nurses — who earn less pay but do receive benefits.
Gunasekaran said the university likely won’t curtail entirely its use of traveling nurses but would prefer to keep it to a minimum through — among other things — adequate and competitive compensation for staff.
Those receiving raises will see them reflected in the Dec. 1 paychecks.
“While we are able to provide midyear adjustments only for part of our workforce at this time, we will continue our ongoing review of job classifications for competitiveness,” Gunasekaran said.
That review will include both clinical and non-clinical positions.
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