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Why Health Systems Are Dropping Sign-On Bonuses — And What the Data Says About What Works Instead

Clasp CEO Tess Michaels joined RogueHire’s live series “Unleashing the Power of Data” to break down the clinical workforce shortage, why traditional hiring tactics are failing, and what a sustainable talent pipeline looks like.

On June 16, Tess Michaels, founder and CEO of Clasp, joined RogueHire co-founders Matt Rimer and Ryan Affolter for a 45-minute live session inside RogueHire’s healthcare TA community. The topic: why the clinical talent shortage is deeper than most health systems think and what the data shows actually works.

Here’s what came out of it.

The Shortage Isn’t Just a Pipeline Problem — It’s a Structural One

When health systems say they have a “clinical talent shortage,” Tess says they’re usually right about the symptom but wrong about the diagnosis. The real picture is more layered:

  • All US jobs are growing at roughly 4% annually. Clinical roles — physical therapy, nurse anesthesia, respiratory therapy — are growing at double-digit rates.
  • Allied health roles carry 2x the vacancy rate of nursing, but receive a fraction of the attention and investment.
  • When health systems hire experienced clinicians, they’re mostly moving pieces around the board. Net new supply only comes from new graduates.

The implication: if you’re not building a relationship with clinicians before they graduate, you’re competing for the same shrinking pool as everyone else.

“You’re more or less poaching from one system to another. You’re reallocating pieces on the board — but not increasing the actual volume.” — Tess Michaels

The ROTC Origin Story

Tess opened by tracing the ROTC model — the frame Clasp uses for its entire approach — back to an unexpected place: a military leadership camp in Texas that she attended when she was fifteen.

She was struck by the clarity she saw. Every student knew exactly where they were headed, had a long career path in front of them, and had near-zero financial stress waiting on the other side. And the loyalty that followed was real. Many of those students stayed with their employer for years.

She walked away asking: what if healthcare could replicate that? Meet talent early. Show investment before day one. Build loyalty before the first paycheck.

That’s the thesis Clasp was built on: connecting health systems with clinical students before graduation, and tying student loan repayment directly to tenure.

Sign-On Bonuses Are Losing the War

The data on sign-on bonuses is increasingly damning:

  • Sign-on bonuses are transactional. There’s no story, no brand lift, no loyalty attached.
  • They’re heavily taxed — candidates don’t get what they think they’re getting.
  • Some states are already starting to ban clawbacks, so policy is going to start to push the industry.
  • Year-1 turnover among Clasp participants runs at roughly 5%, versus an industry average exceeding 20%.

One of the most striking examples from the conversation: a Southeast US health system launched Clasp’s loan repayment benefit and hit 130% of their nurse anesthesia hiring goal in a single month — with zero sign-on bonuses offered.

Several Clasp partners have since dropped sign-on bonuses entirely after launching loan repayment. The transactional lever is losing to the relational one.

Loan Repayment Is Also PR Play

Beyond retention, Tess made the case that loan repayment generates something sign-on bonuses never will: brand marketing.

Clasp employers have been featured in Becker’s, Fierce Healthcare, Modern Healthcare, and NBC. A Wall Street Journal feature centered on a Clasp-supported clinician is in the pipeline. None of that comes from a bonus.

For health systems trying to differentiate their employer brand in a crowded market, this matters. The story of “we invested in this clinician’s education” is a story that travels.

The Policy Wildcard: Grad Plus Loans Are Going Away

The timing of this conversation wasn’t accidental. As part of the broader federal education funding cuts from the One Big Beautiful Bill, the Grad PLUS federal loan program is ending for new borrowers on July 1, 2026 .

For health systems that have relied on PSLF (Public Service Loan Forgiveness) as a recruiting tool, the ground is shifting. As federal loan balances shrink for new borrowers, the value of PSLF forgiveness shrinks with it. Nonprofit status becomes less of a differentiator.

Employer-sponsored repayment, by contrast, doesn’t depend on federal program stability. It’s a direct employer-to-employee commitment, and right now, that commitment is increasingly rare and increasingly valued.

See What This Could Look Like at Your Health System

If any of this resonates — the retention gap, sign-on bonus fatigue, or the Grad PLUS shift — Clasp can help health systems model what an employer-sponsored loan repayment program could look like for their organization, including structure, cost, projected ROI, and which clinical roles to prioritize first.

The assessment is free. Request yours here.