Locum Tenens Compensation Trends: What to Expect in 2025

Attracting physicians to your organization can be a challenge. As we head into 2025, the competition for even temporary skilled providers will be increasingly difficult. How will your organization stay on top of compensation trends to attract locum tenens providers?

If you’re worried about this issue, you’re not alone. Locum tenens physicians have long played a vital role in addressing healthcare staffing gaps. Today, 88% of healthcare organizations use locum tenens physicians and advanced practice professionals to fill staffing shortages.

These positions are also appealing for physicians seeking variety and control in their careers. However, pay rates for locum tenens roles are highly dynamic and influenced by location, specialty, and other market factors.

Healthcare facilities and organizations must stay ahead of compensation trends to attract and retain locum tenens providers. With increasing competition for qualified physicians, particularly in high-demand specialties, understanding market dynamics and offering competitive pay rates is the only way to fill staffing gaps and maintain quality patient care.

By staying informed, healthcare providers can position themselves as attractive options for locum tenens professionals, ensuring continuity of care and operational efficiency.

The Factors Influencing Locum Tenens Pay in 2025

Several factors will continue to shape locum tenens pay rates in the coming year.

Geographic Location  

Compensation varies widely depending on where a locum tenens physician chooses to practice. Rural and underserved areas often offer higher pay rates to attract talent, as these regions face more significant staffing shortages. States with high living costs, such as California or New York, also tend to offer competitive pay to offset expenses.

Demand and Specialty  

Demand for locum tenens physicians fluctuates based on healthcare trends, seasonal needs, and staffing shortages. Psychiatry, in particular, is expected to remain a high-demand specialty in 2025 due to the ongoing mental health crisis. Locum psychiatrists can often command higher compensation as hospitals and clinics strive to address critical gaps in mental health services.

Experience and Credentials  

Physicians with extensive experience or specialized certifications are often better positioned to negotiate higher rates. Facilities value expertise, especially in high-stakes specialties like psychiatry.

Contract Length and Flexibility  

Short-term contracts or assignments requiring immediate availability come with higher compensation. However, extended contracts may offer stability and additional perks such as housing allowances or travel reimbursements.

Psychiatry: A High-Demand Specialty in 2025

Psychiatry continues to be one of the most sought-after specialties in locum tenens staffing. According to the Association for Advancing Physician and Provider Recruitment (AAPPR), 32.6% of physician searches utilizing locum tenens in 2022 were for psychiatry, a significant increase from 15% in the previous year. This surge underscores the escalating demand for psychiatric professionals across various healthcare settings.  

In 2025, locum psychiatrists can expect competitive hourly rates and additional incentives such as sign-on bonuses, relocation assistance, or stipends for continuing medical education (CME). Virtual psychiatry roles, spurred by telehealth adoption, may offer attractive compensation packages while enabling psychiatrists to work remotely.

Emerging Trends in Locum Tenens Compensation

The locum tenens industry is experiencing significant growth, with projections indicating a 7% increase in the temporary physician staffing market for 2025, following a 12% growth in the past year and a substantial 27% surge in 2022. 

Several factors drive this expansion:

  • Physician shortages: An aging U.S. population has escalated healthcare utilization, intensifying the demand for locum tenens physicians to fill staffing gaps. 
  • Provider burnout: High levels of burnout among healthcare providers have led many to seek the flexibility offered by locum tenens positions, which can provide better work-life balance. 
  • Rural healthcare needs: Rural and underserved areas face significant challenges in attracting and retaining permanent physicians, making locum tenens a vital solution for maintaining healthcare services in these regions. 

These trends underscore the growing importance of locum tenens physicians in the healthcare system and highlight the potential for competitive compensation in this field.

Maximizing Your Locum Tenens Earnings

To effectively leverage locum tenens staffing in 2025, healthcare providers should:  

  • Understand which specialties are in greatest demand and how compensation benchmarks vary will help ensure competitive offers that attract top talent.  
  • Remain flexible with assignment locations and terms. Offering roles in rural or underserved areas or structuring short-term, high-impact contracts can help meet immediate staffing needs while appealing to locum tenens professionals.  
  • Partner with a reputable staffing agency prioritizing transparency, competitive pay rates, and customer satisfaction.

At MedSource Consultants, we specialize in connecting physicians with rewarding locum tenens opportunities. We’re here to help you navigate the evolving landscape of locum tenens compensation. Contact us.