How to Set the Pay of Nurses at Your Facility: Guide and FAQ

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Written by Kayla Tyson Editor, B2C Content, IntelyCare
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Reviewed by Katherine Zheng, PhD, BSN Content Writer, IntelyCare
A nurse assists a patient while a CNA stands by and takes notes.

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 determining the pay for nurses on your staff.

Questions To Consider When Setting Pay for Nurses

The best pay rate for your facility is dependent on a wide range of factors. We can’t tell you the exact numbers, but we’ve outlined the following questions to help you think through compensation to find an amount that works for you and your staff and to set up a pay structure that is fair and defensible.

What Licenses and Education Do They Have?

One major factor that influences pay of nurses is their licensure and educational pedigree. Higher levels of education typically translate to increased skills and expertise, which can prove valuable to your facility or residence. 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.

  • Certified Nursing Assistant (CNA): CNA training can be completed in as little as four to six weeks, and is focused on providing patient support with daily activities.
  • Licensed Practical Nurse (LPN): An LPN program takes around one year and prepares for basic nursing skills.
  • Associate’s Degree in Nursing (ADN): Two-year degree program that prepares for entry-level nursing positions as a registered nurse (RN).
  • Bachelor of Science in Nursing (BSN): A four-year degree that provides more in-depth training to prepare for a wider range of nursing positions as a registered nurse (RN).
  • Master of Science in Nursing (MSN): This graduate degree program is typically two years of study beyond a BSN, offering specialized education in advanced nursing practice.
  • Doctor of Nursing Practice (DNP): Provides advanced training in clinical practice, leadership, and research, often taking between three and five years to complete (in addition to earlier degrees).

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 is the type of shifts the nurse 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 the pay of nurses. 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 pay decisions. 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.

Find Answers to Your Staffing Questions and More

We’ve given you a lot to consider when it comes to setting the pay of nurses in your facility. If you need further support, we’re here to help. In the IntelyCare newsletter, you’ll find insightful answers to your questions about staffing, management, marketing, and more.