This story was updated at 5:30 pm CT on April 16, 2025*
In 2024, locum tenens leaders were already sounding the alarm about provider shortages, rapid-fire tech innovation, and a changing workforce dynamic. Now that we’ve moved into Q2 2025, those predictions are coming into sharper focus, with a few twists.
Staffing Industry Analysts recently nudged its 2025 forecast up from 5% to 6% growth for the temporary physician staffing market. While 6% growth is nothing to sneeze at, it’s a far cry from 2023’s 17% surge or 2024’s 15% bump.
To better understand what to expect in locums this year, we once again asked industry leaders to respond to SIA’s forecast as part of our annual Locum Tenens Industry Outlook Survey. Respondents to our 2025 survey included a mix of large locums agencies, some mid-sized firms, and even a workforce solutions platform.
- Jarin Dana, CFO of Fusion Healthcare and NALTO president
- Tim Hand, CEO of Interim Physicians
- Natasha Lee, CEO of Floyd Lee Locums
- Jeff Schaal, President of VeloSource
- Patrick Donovan, CEO of VeloSource
- Janet Elkin, CEO of IMN Enterprises
- Mark Royer, Medical Director for Specialty Locums
- Trevor Strauss, SVP of Healthcare Workforce Logistics
From market growth and emerging specialties to AI’s real (and imagined) impact, here’s what they had to say.
What’s Next for the Locum Tenens Industry?
Not to give away the ending, but…
Industry leaders believe steady growth is over the horizon in 2025, but they don’t expect a repeat of the rapid spikes we’ve seen over the past few years. Most locums leaders predicted modest gains between 1% and 10%, closely tracking with SIA’s 6% forecast for 2025.
So, what’s pumping the brakes? According to Trevor Strauss, senior vice president at Healthcare Workforce Logistics, several factors are at play. “The slowdown comes down to a few key factors: rising costs, hospitals looking to insource more staff, tighter regulations, and consolidation across the industry. Mergers and closures are expanding the pool of available full-time providers in some markets, which naturally reduces the number of open positions.”
Put simply, healthcare organizations are working harder to fill roles internally, while market shifts are tightening the playing field in certain regions.
“The slowdown comes down to a few key factors: rising costs, hospitals looking to insource more staff, tighter regulations, and consolidation across the industry."
Not everyone is as cautious with their predictions. Both VeloSource and Fusion Healthcare anticipate double-digit industry expansion, driven by what they see as untapped potential in specific specialties.
As VeloSource President Jeff Schaal put it, “Hospitals have adapted locums as a part of their staffing models and budgets. They’re too integrated in the industry to significantly pull back.”
Specialty Locums, which focuses on placing surgeons, also sees a bright future in this space. Medical Director Mark Royer shared his perspective, saying, “There are many fellows and residents looking for locums as their main job, especially in specialties where salaries haven’t caught up to the market, like hematology/oncology.”
While specialty staffing seems poised to surge, other firms are projecting modest but significant growth. Constraints like limited internal hiring capacity and ongoing hospital margin pressures are keeping some ambitions in check. Still, most survey participants felt confident they’d outpace SIA’s 6% growth prediction, even with recruitment bottlenecks in play.
“We expect to grow 10% to 20% in 2025,” said Interim Physicians CEO Tim Hand. “But recruitment is a major limiter. There’s just not enough experienced internal talent ready to scale.”
“We expect to grow 10% to 20% in 2025. But recruitment is a major limiter. There’s just not enough experienced internal talent ready to scale.”
More Providers Embracing the Locum Life
Agency leaders say more physicians and clinicians are choosing locum tenens as a long-term career strategy, not just a short-term stopgap. That’s especially true for younger providers who want greater flexibility, better pay, and more control over their schedules.
“Gen Z is very interested in this career path,” said Royer. “Locum tenens is no longer viewed as a red flag but as a bold move by doctors who want to control their own destinies.”
Schaal echoed the sentiment: “It’s about lifestyle now. Newer providers want options, and locum tenens delivers that.”
Other experts commented that temporary staffing is becoming just another part of providers’ lives. “Locums continues to be normalized as a true option for full-time work. This creates an environment where docs want more options and more work satisfaction,” said Natasha Lee, CEO of Floyd Lee Locums.
“Locums continues to be normalized as a true option for full-time work. This creates an environment where docs want more options and more work satisfaction."
Specialties To Watch in 2025
In 2025, the demand for locum tenens providers is steady but shifting. Agency leaders are seeing increased interest in oncology, OB/GYN, psychiatry, and internal medicine subspecialties like cardiology and gastroenterology. The drivers? An aging population, provider burnout, and persistent access gaps in rural areas.
While not everyone agrees on which specialties will shine the brightest, most agree that change is coming. Jarin Dana of Fusion Healthcare pointed to market consolidation as a potential drag on emergency and internal medicine.
“EM and IM growth should level out this year. But I think oncology, OB/GYN, psych, and anesthesia all have much greater potential, just due to basic supply and demand dynamics. These are highly specialized niches without enough temporary staffing to fill the void.”
Not everyone sees emergency medicine as a played-out field. Tim Hand, for example, named emergency medicine as his top specialty to watch in 2025. “Emergency medicine is the gateway to additional hospital services. Demand for it isn’t going anywhere.”
There was one area where consensus came easily: surgery and anesthesia. As Schaal put it, “Surgery and anesthesia are key revenue generators. Pricing may settle, but demand will stay strong.”
“EM and IM growth should level out this year. But I think oncology, OB/GYN, psych, and anesthesia all have much greater potential, just due to basic supply and demand dynamics. These are highly specialized niches without enough temporary staffing to fill the void.”
Breaking down predictions from this year’s experts:
Leaders Are Tapping the Brakes on AI, for Now
Artificial intelligence isn’t just for Silicon Valley anymore. From automated chat tools to predictive analytics, AI is showing up in hospitals, clinics, and yes, even staffing firms. It’s generating buzz and raising eyebrows.
Is AI changing the game in locum tenens staffing? Not quite yet. While some firms are experimenting with AI-powered credentialing systems, onboarding automation, and provider communications, most experts we surveyed believe the broader adoption still feels like a slow rollout rather than a full-blown revolution. Curiosity is high, but confidence remains mixed.
“I don’t see AI making significant changes beyond what it’s already done,” said Hand. “Personal relationships still matter more than anything else.”
Others see gradual gains ahead. “AI will have a medium to moderate effect in 2025, but it will ramp up in 2026 and 2027. With updated models on the horizon and people working day and night to find new use cases, it’s only a matter of time,” said Jarin Dana.
“We’re experimenting with AI tools to lighten recruiter workloads, but it isn’t replacing human connection anytime soon,” said Natasha Lee.
“We’re experimenting with AI tools to lighten recruiter workloads, but it isn’t replacing human connection anytime soon."
Contractor Status, Financial Pressure, and VMS Disruption Remain Top Threats
The biggest risk on most agency leaders’ minds? Regulatory changes that could eliminate the independent contractor model. Temporary healthcare staffing relies on providers’ 1099 status; without it, the industry would face unprecedented uncertainty.
“Eliminating the independent contract status for providers, medical malpractice insurance premiums, and hospital financial strain due to economic pressure are the three biggest threats to the industry,” said Jarin Dana.
Threats to providers’ independent contractor status could jeopardize the industry, and malpractice insurance premiums present an immediate cost. But whatever legal changes may be down the line, some experts emphasized that economic concerns are a more immediate challenge.
“Changes to independent contractor status could significantly disrupt the staffing model,” said Janet Elkin, CEO of IMN Enterprises. “But the more immediate problem is hospitals feeling financial pressure from economic uncertainty.”
Vendor management systems and managed service providers are also reshaping how firms do business. While some see this shift as an opportunity to scale, others view it as a threat to agency-facility relationships and margins. No matter where they stand, most experts agreed that VMS would be critical to the future of the industry.
As Schaal put it, “With new players in the space and potential consolidation, I could see the next few years providing some industry disruption as companies race to get a major foothold in the VMS space, more so now than before.”
Strauss was also adamant on the importance of VMS to the future: “VMS is growing rapidly in adoption due to clients becoming overburdened with agency calls. Candidates are also feeling this pressure, so the ability to engage and build strong relationships for agencies is more vital today than probably at any other time in our industry.”
“Changes to independent contractor status could significantly disrupt the staffing model. But the more immediate problem is hospitals feeling financial pressure from economic uncertainty.”
Final Diagnosis
Locum tenens isn’t just a staffing fix; it’s a career move, a lifestyle choice, and a vital piece of America’s healthcare puzzle. While 2025 may not bring blockbuster growth across the board, the need for flexible, mission-driven providers is as strong as ever and shows no signs of slowing down.
Younger clinicians are coming in with a fresh perspective on locum work, seeing it not as a backup plan, but a smart, sustainable path forward. That shift alone sets the stage for long-term industry growth.
AI hasn’t revolutionized staffing workflows yet, but its potential is growing. As tools improve and adoption increases, tech could evolve from buzzword to bottom-line booster.
Specialty coverage is gaining momentum. Most industry insiders are seeing stable or rising demand in anesthesiology and surgery. Emergency medicine remains more of a question mark, but it’s worth keeping on your radar.
And while regulatory curveballs may still be coming, the more immediate challenge for many firms is economic volatility. Still, the outlook is solid: locum tenens is no longer a niche; it’s embedded in the healthcare system. A temporary disruption won’t unravel what’s become essential infrastructure.
As Natasha Lee summed it up, “Locums is a proven solution to many issues in the industry right now, like the physician shortage. This gives providers a chance to get control back, which is positively impacting providers and healthcare facilities alike.”
* The section titled “Contractor Status, Financial Pressure, and VMS Disruption Remain Top Threats” was updated throughout to attribute quotes correctly and to include additional discussion on VMS.
