New and current laboratory challenges that impact staffing: What you can do to overcome and reach success

Laboratories are navigating a period of rapid change, where financial pressures, workforce shortages, and shifting employee expectations intersect in ways that directly affect staffing and operational stability. Policy changes that reduce healthcare funding are placing new strains on laboratory budgets and resources. At the same time, laboratories must adapt to a generational shift in the workforce as experienced professionals retire and Generation Z enters the field with new expectations around technology, workplace culture, and work–life balance. Together, these forces are reshaping how laboratories recruit, retain, and support their teams. Understanding these emerging challenges — and identifying practical strategies to address them — will be essential for laboratory leaders who want to maintain strong staffing, sustain high-quality testing services, and position their organizations for long-term success.

One Big Beautiful Bill

If you have had a chance to dig into H.R.1 OBBB, commonly known as the One Big Beautiful Bill, you may have discovered that it is not so beautiful for healthcare. With over one trillion dollars in cuts to federal healthcare programs, medical laboratories are going to feel the pressure in several ways.

First, the Congressional Budget Office (CBO), a nonpartisan federal agency that provides an independent analysis of budgetary and economic issues, estimates that there will be an increase of 14.2 million uninsured Americans, largely due to reduced affordability and stricter eligibility requirements.¹ As Americans lose healthcare access, more uninsured patients delay treatment and end up seeking urgent care in emergency rooms when their conditions worsen. Chronic illness care is both costly and complicated, and lack of compensation creates challenges. Numerous emergency rooms, already stretched thin, will have to provide even more services despite having fewer resources, a demand that is neither sustainable nor practical.

Second, the bill triggers Medicare sequestration, which reduces federal spending and is estimated to decrease reimbursement to providers by up to $910 billion over the next 10 years.¹ Coupled with the increased number of uninsured, decreased reimbursements could lead to staffing cuts, reduced service lines, and financial strains, especially in rural and safety-net facilities. In 2023 and 2024, two major national reference laboratories finalized purchases of eight hospital laboratories. Combined, these two organizations completed 36 hospital lab mergers or acquisitions between 2017 and 2022.² This could prove problematic for hospital laboratories that are struggling to remain strong financial sources and value-based models for their healthcare systems.

Third, an estimated $880 billion reduction in Medicaid funding over five years is projected to decrease clinical laboratory reimbursement by $3.6 million. Given that rural hospitals predominantly serve high-Medicaid populations and have limited access to commercial payers to offset these losses, they are expected to face greater financial risk. Not only are reimbursements expected to decline but labs can expect an increase in insurance claim denials, underpayments, and complex billing requirements.⁴ In this environment, laboratories must pay particular attention to their revenue cycles and ensure they are optimizing their billing practices to align with new payor rules, maximizing every dollar of available reimbursement.

Laboratory staffing challenges overall

Each of these challenges can exacerbate an already significant staffing shortage in the laboratory. If uninsured Americans flood hospital emergency rooms, the pressure for fast, accurate, and complex testing increases. Reimbursement issues mean fewer financial resources to improve technology in the laboratory and keep up with salary demands. Delaying instrument purchases stalls technological advances and increases lab frustration as older instruments fail, thus contributing to an already stressful work environment. Additionally, as labs seek automation to address staffing shortages, limited funding can make this approach too expensive. Laboratory staff are among the most highly educated and better paid employees in the healthcare market, causing labor to be the single largest category of hospital spending. In 2024, hospital costs increased by 5.1%, surpassing the overall inflation rate of 2.9%. Keeping up with escalating salary rates remains a considerable challenge. Finally, as staffing gets tight, scheduling in the laboratory can become more rigid. As longer shifts, and fewer working days become more desirable, it takes additional staff to make this possible, especially in a 24/7 working environment.

Meeting the needs of the new workforce

Generation Z, born from 1997 to 2012, will be aged 14–29 in 2026. Many are recent college graduates entering the job market. As Gen Z is entering the workforce, baby boomers are on their way out and this is reshaping staffing, recruitment, and retention in ways that laboratory leaders cannot ignore.

It has been reported that over 22% of Gen Z employees job hop each year with 29% that will completely change fields. According to research analyst Kristie McDermott, who writes for Maddyness.com, 41% of Gen Zs believe their top strength is their creative ideas, which correlates to 54% of them expecting a promotion annually.⁶ When not provided, this generation looks elsewhere. But while this might seem like overconfidence to some, other researchers argue that the Gen Z population is often misunderstood. Many younger workers, just over half in the United States, report having a “side hustle” with 62% of them reporting that above all, they value being successful. Gen Zer’s, they say, are merely bored and concerned about burning themselves out doing uninspiring work. Lack of learning new things, uninteresting tasks, and challenges with collaborating are among Gen Z’s most common reasons given for job changes.⁷ Never has additional training, career ladder opportunities, and cohesive workgroup collaboration been more important in the laboratory.

Don’t forget that this generation was required to learn from home during the pandemic. This may explain their desire for meaningful work. Gen Z wants to know how their work affects patient care when considering our profession. If the role of a medical laboratory scientist is invisible to most, as is often said of our profession, Gen Z must have laboratory medicine explained in ways that provide meaning, highlight purpose, and explain the lab’s significant contribution to population health.

The Gen Z population also grew up totally immersed in technology. As digital natives, 80% of Gen Z laboratorians expect cutting-edge instrumentation, automation leading to efficient workflows, modern LIS systems, and minimal manual tasks. 91% of Gen Z say that technology would influence their job choices if similar openings were offered. 80% believe that technology and automation create a fair working environment.⁸ Anything less than automated efficiency would feel like a waste of time and could cause Gen Z workers to lose interest. Herein lies another challenge for laboratories and their need to remain technologically advanced.

Gen Z reports higher rates of anxiety than earlier generations. In the United States, 45% of Gen Z discuss anxiety as a problem compared to 25% of baby boomers.⁷  This contributes to why this younger generation also values a healthy work–life balance, flexible working models, and a collaborative/friendlier work environment.⁸ To create flexibility and a greater balance, three 12-hour shifts with a 36-hour work week are often desired over the traditional five-day, eight-hour shifts (40-hour work week), even though it pays less. These longer shifts provide more days off than days on for the employee but can make the challenge of staffing even more difficult. More staff are required when there are fewer staff available to hire. Regardless of these challenges, if you want to hire new Gen Z graduates, this type of scheduling is imperative.

In my own experience interviewing Gen Z applicants, they are asking more questions about team culture and mental health benefits (how many breaks in a day, are the hours flexible, and how many vacation days do they get). Furthermore, questions are asked regarding accountability, the training of supervisors, and their approach to various situations. I don’t see this as a challenge for the laboratory profession but an opportunity. As stated by Nancy Alers MS, MT(ASCP)^cm, CQIA, CMQ/OE, CLC in her interview by MLO Inside the lab of 2026, Insights from 12 laboratory experts, “The next phase of retention isn’t just about filling vacancies; it’s about cultivating environments that nurture professional growth, well-being, and belonging. If we can achieve that, we’ll not only stabilize our workforce but also elevate the profession as a whole.”⁹  Way to go Nancy! Creating a caring, inclusive, and accountable workplace is one of our greatest opportunities for laboratory leadership.

Conclusion

In summary, despite ongoing and new challenges that impact laboratory staffing, there are steps laboratories can take to secure future success. First, become a laboratory reimbursement expert or make friends with one. As the complexities for laboratory billing grow, we must all participate in appropriate test utilization, diagnosis coding, and strategies that ensure maximum reimbursement. Next, it’s important to recognize and value the requirements of our team members, particularly those who are recent graduates and part of Generation Z entering the workplace. The demands of this generation, while different than previous, can only improve our workplace and create better working conditions for all of us. As working conditions improve, we can retain the great team members we currently have and attract new ones. The competition, therefore, for limited laboratory professionals, lies in creating a laboratory environment where everyone wants to be. Use your limited resources wisely on automation, improved training, career ladder advancements, and keep a firm hand on a positive and inclusive work culture.

REFERENCES

1. Trebes N, Beckmann S, Aleti D, Palmer B. One Big Beautiful Bill Act: Understanding the healthcare impacts. Advisory Board. Updated March 2, 2026. Accessed March 9, 2026. https://www.advisory.com/topics/strategic-and-business-planning/obbba-healthcare-impacts.

2. U.S. Laboratory Market Report 2024. Research and Markets. August 2024. Accessed March 9, 2026. www.researchandmarkets.com/reports/5693132/u-s-laboratory-market-report-2024.

3. The Big Beautiful Bill’s Impact on Clinical Diagnostic Labs. Dendi. Accessed March 9, 2026. https://dendisoftware.com/blog/big-beautiful-bill-clinical-lab-impact.

4. Doll D. Navigating the Big Beautiful Bill: A guide for medical labs. CompuGroup Medical. September 24, 2025. Accessed March 9, 2026. https://www.cgm.com/usa_en/articles/articles/lab/navigating-the-big-beautiful-bill-a-guide-for-medical-labs.html.

5. The Cost of Caring: Challenges Facing America’s Hospitals in 2025. American Hospital Association. April 2025. Accessed March 9, 2026. https://www.aha.org/system/files/media/file/2025/04/The-Cost-of-Caring-April-2025.pdf.

6. McDermott K. 22% of Gen Z job hops each year – and you should too. Maddyness. September 5, 2023. Accessed March 9, 2026. https://www.maddyness.com/uk/2023/09/05/22-of-gen-z-job-hops-each-year-and-you-should-too/.

7. Gilsenan K. What Gen Z really think and why you should care. GWI. Accessed March 9, 2026. https://www.gwi.com/blog/what-gen-z-really-think.

8. Measures to address laboratory staffing shortages are required to limit future impact. LabLeaders insights, Roche Diagnostics. November 19, 2025. Accessed March 9, 2026. https://diagnostics.roche.com/global/en/lab-leaders/article/limiting-impact-shortage-laboratory-professionals.html.

9. Wichmann C. Inside the lab of 2026: Insights from 12 laboratory experts. Medical Laboratory Observer. November 24, 2025. Accessed March 9, 2026. https://www.mlo-online.com/online-exclusives/article/55332108/inside-the-lab-of-2026-insights-from-12-laboratory-experts.