Physicians Are Choosing Locum Tenens Over Staff Roles on Purpose — and the Pay Premium Is Only Half the Reason Independent Practices Are Losing

The framing most medical practice administrators use when losing physicians to locum tenens is fundamentally wrong. They see a compensation problem and reach for a retention bonus. What they have is an autonomy architecture problem, and no raise fixes that. The data from CHG Healthcare's 2025 State of Locum Tenens report makes this unavoidable: 79% of physicians currently working locum tenens are very or extremely likely to continue doing so permanently. Locum tenens usage in 2024 ran 25% above what facilities projected. The U.S. locum tenens market reached $9.6 billion in 2025 and is on track for $9.9 billion by 2026, according to Staffing Industry Analysts data compiled by Aequor. The physicians fueling that growth are not desperate; they are deliberate.

The 7.56% CAGR That Isn't About a Shortage — It's About a Preference

The locum tenens market's projected 7.56% compound annual growth rate through 2030 gets attributed, in most industry analyses, to physician shortages driven by an aging population and retirement-age practitioners. The Association of American Medical Colleges projects a shortfall of between 37,800 and 124,000 providers by 2034. The shortage is real, but it does not explain the supply-side shift. If physicians were choosing locum work reluctantly, as a fallback during job searches or economic downturns, you would expect continuation rates to drop when permanent opportunities improved. They have not.

CompHealth's 2025 State of Locum Tenens data shows that 56% of locum physicians began working this model within their first ten years of practice, with 29% starting between years two and five. These are not burned-out physicians near retirement winding down their workload. They are physicians at the height of their productive careers making a deliberate institutional exit. An estimated 56,000 physicians now work as locums, and 16.4% of all physician searches in 2024 included locum arrangements, the highest rate ever recorded. The preference signal is clear and consistent.

The Autonomy Equation: What Locum Physicians Are Actually Buying at a Premium

Compensation ranks first in physician surveys on locum motivation, with 82% citing pay as a driver. That number is real and practices should not minimize it. Locum physicians earn an average of $32 more per hour than their permanently employed colleagues, according to locum tenens compensation data from locumstory.com. In high-demand specialties, that gap widens dramatically: anesthesiologists earn $300–$400 per hour locum versus a national median permanent salary equivalent of roughly $150–$180 per hour. But the second and third drivers in CHG Healthcare's research tell the more important story.

Schedule control ranks second (69%), followed by assignment date flexibility (57%), patient load control (55%), and location choice (52%). Together, these variables constitute what locum physicians are actually purchasing: sovereignty over their clinical context. No mandatory call. No productivity quotas calibrated to a health system's revenue targets. No obligation to participate in committee work unrelated to patient care. CHG Healthcare's 2025 Physician Sentiment Survey found that 91% of physicians identify autonomy as their most important job satisfaction factor, but only 59% report being satisfied with the autonomy they receive in permanent positions. That 32-point gap is where the locum pipeline originates.

Why Your Retention Bonus Is Solving the Wrong Problem

Practice administrators treat physician retention primarily as a compensation challenge because compensation is the easiest lever to pull. Retention bonuses, signing incentives, and loan repayment programs are transactional, budgetable, and defensible in board presentations. The problem is that they address the stated reason physicians accept locum work, not the structural reason they stay in it.

Only 18% of permanently employed physicians are highly engaged with their organizations, meaning they advocate for the practice, feel genuine connection to leadership, and intend to remain long-term. A full 74% express general satisfaction but have no emotional or institutional loyalty. That 74% is the locum conversion pool. They are not unhappy enough to complain, but they are disengaged enough to calculate. When a locum contract crosses their desk offering $50 more per hour, no call schedule, and the ability to say no to the next assignment, the math is obvious.

The 2025 Physician's Foundation Wellbeing Survey found that 55% of physicians report debilitating stress and 54% report burnout at levels comparable to the pandemic peak. CHG Healthcare's research shows that 43% of physicians report their burnout symptoms improved after beginning locum work. No retention bonus has produced data like that.

The Specialty Breakdown: Which Physician Types Are Leaving Fastest and Why

Not all specialties are defecting to locum arrangements at the same rate. The acceleration is sharpest where the gap between locum earning potential and permanent salary is widest, and where the administrative burden of permanent employment is heaviest relative to clinical work.

Anesthesiology leads demand projections with a 55% expected increase in locum need, driven by both retirement-age practitioners exiting the workforce and mid-career anesthesiologists who find the locum model particularly well-suited to their shift-based workflow. Locum anesthesiology rates now reach $400 per hour, making permanent recruitment at competitive salary levels operationally unsustainable for many independent practices.

Psychiatry and behavioral health represent the fastest-growing demand category by volume. Over 160 million Americans live in areas with mental health provider shortages, per Amergis's 2026 locum tenens forecast, creating sustained high-premium locum markets that independent outpatient practices cannot match. Emergency medicine physicians, who already function on shift-based schedules structurally similar to locum arrangements, find the transition frictionless and the pay difference ($200–$300 per hour locum versus roughly $150–$180 per hour permanent equivalent) compelling without additional lifestyle sacrifice.

What Practices Built for Permanent Employment Get Wrong About Competing

The conventional assumption is that locum work requires trade-offs, specifically in benefits, retirement matching, job security, and continuity of patient relationships. Practices lean on these factors in recruitment conversations. The problem is that locum staffing agencies have systematically closed these gaps. Reputable locum firms cover malpractice insurance, travel, and housing. The physician as independent contractor can fund a SEP-IRA or solo 401(k) with contribution limits exceeding most employer plans. Patient continuity arguments land less hard on physicians who watched health systems dissolve practice identities through merger activity throughout the 2010s and early 2020s.

Practices also misread the demographics. The assumption that locum work is a near-retirement phenomenon has not been accurate since at least 2022. With 56% of locum physicians beginning within their first decade of practice, independent practices are losing physicians who have years or decades of productive clinical work ahead of them. Each early-career locum conversion represents not a recruitment loss but a permanent structural vacancy.

The Hybrid Employment Model That's Starting to Stem the Outflow

A small but growing cohort of practices has stopped trying to replicate the locum value proposition and started building employment architectures that incorporate its core elements. The specific mechanisms that are showing retention results in 2025 and 2026 share common features: physician-controlled scheduling within defined coverage parameters, explicit limits on non-clinical administrative time, elimination of mandatory committee participation below the department leadership level, and patient panel size governed by physician preference rather than system productivity targets.

CHG Healthcare's research on facility strategy notes that 25% of healthcare organizations are now using locum physicians strategically to reduce permanent staff workload, an acknowledgment that the permanent employment model was pushing physicians toward the exit. Some forward-thinking independent practices are formalizing this logic into hybrid contracts: guaranteed clinical days with defined administrative obligations, supplemental locum-style engagements permitted during open periods, and compensation structures tied to actual clinical output rather than system-determined productivity benchmarks.

This architecture does not eliminate the locum pay premium. It does close the autonomy gap, which is where the actual decision is being made. The practices that treat physician retention as purely a compensation negotiation will keep losing to a model that has already won the satisfaction argument.