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Understanding Registered Nursing Supply and Demand in Montana

Photo of nurse standing in a hospital room with her arms crossed.Nurses are the largest occupation within the rapidly growing healthcare industry, making the development of a highly-skilled nursing workforce critical to ensuring a safe and effective healthcare system in Montana. Currently, there are over 15,000 actively licensed registered nurses (RN), over 2,400 actively licensed practical nurses (LPN), and 1,200 actively licensed advanced practice registered nurses (APRN) in the state.[1]The Montana Department of Labor and Industry (MTDLI) projects continued high demand for nurses over the next ten years. An additional 445 RNs, 107 LPNs, and 27 nurse practitioners will be needed each year in Montana through 2025, according to MTDLI employment projections. These projections include job openings occurring because of an increase in demand for nurses, as well as replacement openings caused by retirements or job changes.

In response to these workforce needs, Montana colleges have increased their capacity to produce nurses over the last few years.[2] In the 2009-10 academic year, about 360 registered nurses graduated from Montana colleges. Since then, nursing capacity as increased by 42%. Over 500 students graduated from registered nursing programs in Montana in the 2014-15 academic year. Figure 1 demonstrates the rapid growth in RN capacity at Montana colleges, and compares the supply of RNs to estimated demand.

Graph titled Annual supply and demand for registered nurses in Montana. The contents of the graph is explained in the text.

Montana colleges are now estimated to have the capacity to meet future nursing workforce needs due to the recent growth in nursing graduates. College capacity exceeds demand by about thirty nurses, which is only 0.3% of the total number of RNs working in Montana. Given that RN capacity has only exceeded estimated demand in the last few years, and because the amount of oversupply is very small, there is likely a backlog of unfilled job openings among Montana employers. It may take several years of consistent oversupply to fully address this historical nursing backlog. 

Nursing backlog caused by years of undersupply may still make it difficult for employers to find the workforce they need, despite the recent increase in nursing capacity among colleges. In addition to this backlog, there are other factors that may make hiring nurses difficult for Montana employers:

Not all registered nursing graduates stay in Montana after graduation.

About 84% of registered nursing graduates work in Montana a year after graduation.[3] While this level is well above the average among all programs, the remaining 16% may not be available for work because they are pursuing higher education, working outside Montana, taking care of family, or pursuing other life goals. However, employers do not rely solely on Montana college graduates to fill job openings, nursing graduates from other states also move to Montana. Data on the number of nurses arriving from other states is unavailable, making it difficult to say if net migration of nurses is positive or negative.

Not all registered nursing graduates hold a bachelor’s degree.

Only 56% of registered nursing graduates hold a bachelor’s degree. The recent growth in RN graduates is primarily among associate degrees. Employers looking to hiring bachelor’s trained registered nurses will have difficulty finding the workforce they need. There are not enough bachelor’s degree RNs to meet statewide workforce demand. Montana employers will need to continue hiring both associate and bachelor’s degree RNs in order to meet their workforce needs.

Further, there is little incentive for students to pursue a bachelor’s degree because income levels do not differ significantly between a bachelor’s degree and an associate degree trained RNs. The median income reported by bachelor’s RNs was $46,000 one year after graduation. While this was the highest median income reported among bachelor’s degree programs in Montana, it was only $2,000 above the median income reported by associate RNs. The minimal income premium for bachelor’s degree attainment may make it difficult for students to justify the cost of obtaining a four-year degree.

Not all graduates are located in areas with the greatest need.

While colleges developed the statewide capacity to meet future nursing workforce needs, there are geographical distribution mismatches in supply and demand that make it difficult for employers in some regions of the state to find the workforce they need. Colleges in the Northwest and South Central regions of the state are undersupplying the regional demand for registered nurses. In order for employers in those areas to have the workforce they need, RN graduates from other regions will need to move to the Northwest and South Central regions to fill job openings. The mobility of the RN workforce is critical to ensuring employers in all areas of the state have access to the workforce they need.

The supply and demand analysis does not suggest any changes to the current capacity for RNs. Instead, it suggests that recent efforts to increase RN capacity at Montana colleges has been successful, and have helped address the gap between supply and demand. While progress has been made, a backlog of unfilled position, mismatches in the geographical distribution of graduates, and lack of bachelor’s trained RNs still create hiring difficulties. The statewide college report is designed to help guide decision-making among student, parents, administrators, and policy makers. The results provide supplemental information to an already developed understanding of education and workforce policy in Montana.

 

[1] Licensure data from the Montana Department of Labor & Industry on 5/1/17.

[2] Montana Colleges include sixteen colleges in the Montana University System, Rocky Mountain College, and Carroll College.

[3] Calculated by matching graduate data to income tax records maintained by the Montana Department of Revenue. Includes graduates filing resident and non-resident income taxes in the year after graduation.

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