Creating a Nursing Pay Structure: Facility Guide

Staffing a healthcare facility is no simple task, especially when faced with a tight supply of nursing professionals. As you think about hiring, interviewing, and onboarding new staff, an important question arises: How will you set the pay of nurses in your facility?

Compensation plays an important role in predicting whether a nurse will be pleased with their employment situation. Studies show that — in addition to the work environment and staffing levels — wage has a significant effect on job satisfaction.

While you surely understand that nurse pay is important, that doesn’t help you decide the best rate to offer in your specific situation. In this article, we’ll review some of the key questions you should take into account when creating a nursing pay structure.

Questions to Consider When Creating a Nursing Salary Structure

The best pay rate for your facility is dependent on a wide range of factors, and exact amounts will vary by location and other facility-specific considerations. We’ve outlined the following questions to help you understand how to create a salary structure that works for you and is also fair for your nurses.

What Licenses and Education Do They Have?

One major factor that influences nursing pay is licensure and educational pedigree. If you’re creating a more traditional pay structure at your facility, you’ll want to understand how levels of education translate to skills and expertise. There are several types of nursing licenses and degrees, which vary in the length of time and amount of knowledge required to obtain them. The levels of nursing below are organized from least to most time intensive.

What Experience and Certifications Do They Have?

A nurse’s experience can have a significant impact on their pay. Experienced nurses are often sought after by healthcare organizations because they can provide mentorship to newer nurses and are more prepared to step into leadership positions. Also, more years in the profession often leads to the opportunity to earn additional certifications.

Generally speaking, nurses who hold certifications in specialized areas earn higher salaries than those without certifications, even if they hold the same degree level. It’s important to review types of nurse specialties and their required certifications as you set salaries for open positions at your facility. There are many types of nurses, and salaries should match their qualifications and experience.

What Type of Shift Are You Filling?

The next consideration you should make when creating a pay structure is the type of shifts your nurse professionals will be working. Shifts on weekends, nights, or holidays are often associated with additional pay differentials — payments added to the base hourly rate to compensate for the inconvenience of working the shift.

In addition to differentials, it’s important to factor potential overtime pay into your decision, as overtime can quickly impact your overall budget. Refer to the U.S. Department of Labor’s regulations for overtime pay in the healthcare industry, which includes the requirement that any bonuses or differentials be factored into the regular rate of pay when calculating for overtime.

Where Is the Facility Located?

The type and location of a healthcare facility or residence can have a significant impact on pay structure. That’s because locations differ in demand for healthcare services, availability of qualified staff, and cost of living. Typically, nurses working in urban areas earn higher salaries than those in rural or low cost-of-living locales.

Your state of residence will also factor into nurse pay, as state-wide policies and regulations can influence healthcare salaries. It’s important to note that pay will also depend on the type of facility, such as a hospital, outpatient clinic, assisted living facility, or physician office. Make allowances for local salary trends, demand for services, and the cost of living in your area as you make your final decision about the pay of nurses.

What Other Employment Costs Do You Have?

You should also keep general employment costs in mind as you make your pay structure. Think about the costs of the benefits offered with employment, such as health insurance, retirement plans, paid time off, or professional development. Also, take a look at your facility costs: rent, utilities, supplies, and equipment.

If these costs are exceedingly high, you’ll have less money available to set your facility’s pay of nurses to competitive rates. Try to negotiate reasonable rates with insurance providers and work to lower overhead costs so your facility’s budget can focus on bringing in quality professionals and compensating them appropriately.

What Are Your Competitors Offering?

It’s important to evaluate the rates offered by nearby facilities when setting the pay of nurses to remain competitive in the local job market. Nurses are in high demand, so you may be aiming for a limited pool of qualified nursing talent. Conduct research on the rates offered by competing employers to get a better idea of local salary trends. Then, set rates that help your facility stand out.

Setting a Nursing Pay Structure: Example

To get a better understanding of how you can apply these considerations in practice, let’s take a look at a hypothetical hiring example below. While we are highlighting one specific scenario, you can use the table below as a pay structure template that helps you determine the pay for roles at your facility.

Scenario: A nurse manager is hiring an operating room (OR) nurse at their facility located in Atlanta, Georgia. This position is day shifts only, with no weekends, nights, or overtime. They are currently in the process of making an offer to a BSN-prepared Registered Nurse (RN) who is also a Certified Medical-Surgical Registered Nurse (CMSRN) and holds 3 years of experience in the OR. This candidate is considering one other offer from a competitor facility.

Template for Creating a Nursing Salary Structure

Determined Pay: Since the candidate has a specialized certificate and relevant experience, the nurse manager decides to match the competitor offer of $85,000 and also offer a higher sign-on bonus of $10,000. This ensures that the manager stays within budget (accounting for the cost of benefits), and executes a reasonable offer in context of the type of shift being filled and the average salary expectations in the city.

Need Help Attracting the Right Candidates?

Setting a fair pay structure can help you attract quality nurses, but it also needs to be effectively advertised alongside your facility’s other perks. Ensure your resources are going to the right places by posting to IntelyCare’s nursing-only job board, designed to help you reach qualified candidates faster.

IntelyCare B2C content editor Kayla Tyson contributed to the writing and research for this article.