Salary increases for health care staff have stabilized after years of sharp escalation, according to new research from SullivanCotter — but the consulting firm warns that underlying workforce pressures have not gone away.

For health care HR leaders, the finding lands at a decision point. Compensation budgets that stretched during the post-pandemic labor crunch may now be steadying, yet retention, burnout and staffing shortages remain live operational risks. SullivanCotter's study, released via Business Wire, frames 2025 as a year in which pay growth normalizes while the underlying labor market for clinicians and health care workers stays tight.

What does the research show?

SullivanCotter — a firm specializing in compensation and workforce analytics for the health care and nonprofit sectors — reports that pay increases for health care employees have moved from the aggressive, market-driven escalation of recent years into a more measured, stable pattern.

The stabilization matters for two reasons:

• It suggests employers can plan compensation budgets with greater predictability after a period of reactive, retention-driven wage moves.
• It signals that pay alone may no longer be the decisive lever in competing for health care talent — a shift with direct implications for total rewards strategy.

At the same time, the research is explicit that workforce pressures persist. Stabilizing salaries do not mean stabilizing headcounts, engagement or burnout levels.

What should HR and compensation leaders take from it?

For chief human resources officers and compensation committees at hospitals, health systems and medical groups, the findings raise practical questions:

• If competitors are no longer bidding wages sharply upward, where should retention investment shift — scheduling flexibility, career pathways, leadership development?
• Do current pay structures reflect the market accurately enough, or do they carry legacy premiums from the labor crunch that distort internal equity?
• How should annual merit and market adjustment cycles be recalibrated now that increases have leveled off?

SullivanCotter's core business is helping health care organizations answer exactly these questions with benchmarking data, and the research release implicitly positions employers to re-examine their compensation programs against the new baseline rather than assume last year's escalation logic still applies.

Why stabilization is not the same as relief

The distinction between stabilizing pay and easing pressure is the report's most important nuance for people-process decisions. Labor costs may stop climbing as fast, but vacancies, turnover in high-demand clinical roles and the cumulative toll of sustained understaffing continue to shape workforce strategy.

That places renewed weight on the non-cash elements of the employee value proposition. Health care employers that treated wage premiums as a short-term retention fix will need to show whether their broader talent strategy — onboarding, workload management, professional development — can hold staff once pay stops doing the heavy lifting.

SullivanCotter indicates the full dataset provides deeper detail for organizations benchmarking their own compensation programs against sector trends.

Going forward, health care HR teams will be watching whether this stabilization holds through the next budget cycle — and whether retention metrics improve as pay growth flattens, or whether the sector's workforce pressures simply migrate into new, costlier forms.