Mayo Clinic boosting pay 6%, biggest jump in more than two decades

Mayo Clinic will raise pay by 6% early next year for its largest category of workers, a move that clinic officials say is the biggest across-the-board pay jump in more than two decades.

The raises apply to about 64,500 allied health staff across the Rochester-based health system, which operates in Minnesota and four other states.

The category includes jobs ranging from nurses and technicians to security and maintenance, although pay increases don't apply to workers covered by union contracts, said JoEllen Frain, the chair of human resources at the clinic.

Mayo Clinic is Minnesota's largest employer. Health systems across the state are under pressure to boost pay for workers.

The pay increase acknowledges staff contributions throughout the COVID-19 pandemic, Frain said, as well as broader economic factors including health care worker shortages and the hit to household budgets from general inflation.

"I've been at Mayo for 23 years and this really is probably one of the most challenging times that I've seen in my career here," she said. "I think it's really that Mayo Clinic firmly believes that our staff are our most valuable resource."

In early September, as many as 15,000 nurses went out on a three-day strike over pay and benefits at 15 hospitals in the Twin Cities and Duluth. This week, mental health workers at Allina Health System went on strike as their colleagues at Fairview Health Services reached a new contract on the eve of a strike.

At Mayo, the salary changes will take effect in January, which is earlier than the usual March timeline for pay increases. Workers who make less than $21 an hour will see extra raises that bump their pay by about 8% or 9%.

In addition, Mayo is increasing pay ranges by 3% across all allied health job categories, which will benefit newly hired workers as well as current employees who move into new jobs at the clinic. Long-tenured staff who are close to or at the top of their pay range will receive lump-sum payments next year that ensure their total 2023 compensation will increase 6%.

"Although future economic conditions are unpredictable, our leadership team has made the decision to make a further investment in our extraordinary staff — because there is no Mayo Clinic without you," Chief Executive Gianrico Farrugia and other top officials wrote in a memo distributed Wednesday.

In 2022, Mayo provided a minimum wage increase of 4% for workers, a rate that executives decided in February to boost from its previously announced raises of 2%. Concerns over general inflation were a factor.

Operating income soared last year at Mayo to $1.2 billion, but financial results during the first half of 2022 have been hit by increased labor costs.

"Workforce shortages and inflation in both labor and non-labor costs have had an impact on the first and second quarter operating results but Mayo Clinic is well-positioned to enter the second half of 2022," the clinic said in a financial statement on second quarter results. "These same factors reinforce future plans for revenue diversification, digitization of health care, using platform models to accelerate innovation, and investing in the treatments for complex and serious clinical care."