The Pool of Available Talent Is Shallow, the Needs Are Great: Competition for Qualified Personnel Among Mental Health Organizations

Background and Purpose: Federal health care reform and mental health parity legislation have extended benefits eligibility and access to mental health services. However, community-based mental health organizations often struggle to expand services to meet increasing demands because of well-documented workforce shortages (Olfson, 2016). As a result, competition for qualified mental health professionals (social workers, psychologists, psychiatrists) has intensified among mental health organizations. Competition among mental health organizations has received limited empirical attention. Therefore, we know little about how executive leaders experience and respond to these shifts in the interorganizational environment, or the implications for workforce management and service delivery. This study draws on Michael Porter’s (1980, 2008) seminal work on competition to examine (1) environmental drivers of, and (2) executive leaders’ strategic responses to competition for mental health professionals.

Methods: This study took place within a single regional market of mental health organizations in a Midwestern state. Among 69 organizations in the region, 24 were randomly selected, and 15 agreed to participate. Semi-structured phone interviews were conducted with the executive leaders; leaders were predominantly female (60%), from nonprofits (87%), and reported a range of executive experiences (from 1.5 years to 40 years). The interview guide asked about the intensity and drivers of competition, and how participants and their organizations have responded. Interviews were recorded, and professionally transcribed; transcriptions were analyzed using an iterative open-coding process consistent with a modified grounded theory approach. Themes were further interpreted through the lens of Porter’s definitions of five main competitive forces, and two strategic organizational responses.    

Results: Leaders described intensive competition for clinical personnel. As one participant noted, “the pool of available talent is shallow, the needs are great.” Participants perceived that this competition was driven by workforce shortages, rising demand for qualified personnel due to several new entrants to the marketplace (for-profit behavioral health organizations), and state-wide financing changes that provide higher Medicaid reimbursement rates for masters’ and doctoral level clinicians. In response, executive leaders reported employing strategies to differentiate themselves including (1) increasing salaries, benefits, and offering signing bonuses (when possible), (2) building supportive workplace climates, improving schedule flexibility, and providing emotional supports to reduce turnover, and (3) marketing their organization as an “entry-level” opportunity for new professionals.

Conclusions and Implications: Given mental health organizations’ reliance on well-trained personnel, these findings suggest that clinicians have extensive bargaining power as key labor “suppliers.” In response, leaders are attending to salaries, benefits, and workplace culture to improve staff recruitment and retention. These strategic responses could improve service quality and outcomes, although will likely require financial assets that many mental health organizations may not have. As a result, mental health organizations may encounter difficulty maintaining a qualified workforce under continued or escalating competitive pressures. These findings suggest the need for expanded and/or accelerated training for mental health professionals to address workforce shortages. In addition, well-intentioned policies that require or incentivize organizations to hire certain types of degreed or licensed professionals (who are in short supply) might have long term unintended consequences for mental health organizations.