As healthcare organizations increasingly feel the impact of the physician shortage, many healthcare leaders fear that the only way to hire new physicians is with inflated physician compensation packages. After all, when demand is high and supply is short, the value of the subject in question increases. And yet, in looking at 2025 physician compensation reports, we did not see huge jumps in average compensation, at least, not when looking at physician compensation as a whole. While some high-demand specialties are seeing spikes, for the most part, employers are finding other, more creative ways to make their offers more attractive.
As Regional Vice President of Recruitment for Jackson Physician Search’s Western division, I work with clients every day to develop attractive physician job descriptions that highlight competitive compensation and recruitment incentives. Each healthcare organization is unique — and so is the physician they are aiming to hire — so what works in one situation may not work in others. However, there are certainly patterns emerging that can guide strategy.
In a new trends report from Jackson Physician Search, my colleagues and I discuss what we’re seeing in the current market in terms of physicians’ expectations and how employers are meeting and exceeding them to win top talent. In this blog post, I’ll touch on the report’s takeaways regarding physician compensation, but for the full discussion, read “The New Physician Recruitment Reality: Current Trends and the Road Ahead.”
Modest Physician Compensation Growth
Most industry data shows that physician compensation continues to grow modestly. Medscape reports a 2.9% increase from 2023 to 2024. Doximity reports 3.7% for the same period. Forbes reports that MGMA’s 2025 provider compensation report, also using 2024 data, shows annual gains ranging from 3.17% to 5.57%, depending on specialty. The Jackson Physician Search report, which evaluated 2025 compensation data, found an average increase of 2.8% over 2024.
In short, overall average compensation is still climbing — just not dramatically. We are seeing that competitive base salaries typically fall between the median and 75th percentile of MGMA benchmarks. Organizations offering below-median compensation are finding it increasingly difficult to recruit, regardless of how attractive other parts of the package may be.
When Increases Make Sense
Supply and demand continue to favor physicians, and as a result, guaranteed bases are creeping upward in many markets. When projected volume supports higher earnings, it is wise for organizations to make those increases. Sometimes leaders think it is fiscally “safer” to offer a lower number in case the physician’s productivity does not meet expectations. However, I advise clients to be transparent about what physicians can realistically expect to earn and offer a guarantee that aligns. Anything less will only hurt their chances of winning the candidate.
Employers should be able to clearly explain how the projections are built, so that physicians have confidence that once the guarantee expires, they can expect to maintain or even exceed their starting salary.
Growing Physician Recruitment Incentives
Significant increases to base salary aren’t always realistic, which helps explain why recruitment incentives are growing faster than guaranteed pay. This is where many organizations are gaining a competitive edge. According to the new Jackson Physician Search report, in 2025, 81% of placements at Jackson Physician Search included recruitment incentives, up from 77% in 2024. In many cases, those packages reach six figures.
Flexibility with these funds is critical. Organizations often create pools of $150,000–$300,000 that can be allocated to signing bonuses, student loan repayment, moving expenses, residency stipends, and/or down payment assistance, based on individual candidate needs. Tax advantaged bonus structures are also appreciated. That is, upfront bonuses with annual forgiveness, taxed incrementally rather than as a lump sum, create mutual retention benefits.
For organizations that cannot significantly increase base salary, incentives provide a practical way to strengthen the total package without permanently inflating fixed costs.
Customized Package, Clearly Presented
Once the compensation package is tailored to the candidate, how it’s presented matters just as much as what’s included. Employers should walk through the offer with the same clarity and preparation they would use when presenting a business case to an investor. After all, the organization is asking the physician to invest their time with the group.
Transparency is essential. Share detailed volume projections, expected patients per day, collection rate assumptions, and anonymized compensation data from physicians already in the practice. When candidates can see exactly how the numbers work, they’re more likely to trust the projections and feel confident in their decisions.
Non-Monetary Compensation
Compensation, of course, encompasses more than salary and bonuses. Schedule flexibility and other factors impacting work-life balance have become meaningful differentiators with perceived high value. Cultural factors such as autonomy and leadership pathways also have inherent value. In fact, the younger generations of physicians often weigh work-life balance, autonomy, and culture as heavily as financial compensation.
Physicians increasingly expect four-day workweeks, but creative block scheduling is also desirable. Remote administrative days (or half-days) are frequently requested. In a competitive hiring environment, schedule flexibility is a must. These non-monetary elements of a well-structured physician compensation package can offset what is perceived to be a less competitive base or recruitment incentives.
The Bottom Line
Physician compensation continues to rise, but the growth is measured. Employers feel pressure to offer more and more if they hope to attract talent. In response, many organizations are raising guarantees where justified, expanding recruitment incentives, and offering greater flexibility to stay competitive.
The most successful employers are not simply paying more. They are building thoughtful, data-backed compensation plans and presenting them with clarity and confidence. By integrating broad compensation trends with thoughtful total rewards design — and communicating them effectively — organizations will be better equipped to recruit and retain the physicians needed to deliver high-quality care now and into the future.
For a more detailed look at the current physician recruitment market, download the new report: “The New Physician Recruitment Reality: Current Trends and the Road Ahead.”
If you are searching for a physician, it’s imperative to understand the changing expectations surrounding physician compensation and have a plan to meet them. The Jackson Physician Search team of dedicated recruiters is well-versed in physician compensation reports and trends in the current market. Our recruitment team can help you market your job effectively and extend a competitive offer when the time is right. Contact us today.
About Jeff Foster
With more than 15 years of experience in healthcare strategy and physician recruitment, Jeff Foster has partnered with hospitals, health systems, and academic centers across the country to strengthen their recruitment programs and improve processes.
A West Virginia native, Jeff began his career at Charleston Area Medical Center, where he specialized in candidate acquisition, practice start-up, and service line expansion. He later joined National Jewish Health, the nation’s #1 respiratory hospital, to help develop a strategic faculty recruitment office.
In 2016, Jeff joined Jackson Physician Search as one of the first team members in its Denver office. Since then, he has built a reputation as a leading expert in physician recruitment — earning Consultant of the Year multiple times and advancing to his current role as Regional Vice President of Recruiting. In this role, he not only works directly with hospitals to secure top talent but also mentors a growing team of recruiters, helping them achieve long-term career success.
What Jeff values most is seeing people thrive — whether it’s physicians finding their dream jobs, healthcare organizations strengthening their teams, or colleagues achieving new milestones in their careers.
Outside of work, Jeff enjoys skiing, playing soccer, and exploring the outdoors with his wife in Denver.
