Why the health workforce crisis is a financing failure

Many countries train enough health workers, but budget ceilings and fragmented governance block hiring and retention. Fixing the crisis means reforming domestic financing and coordinating workforce planning across ministries.

Graduates of health institutions are joining an emerging cadre of ‘volunteer’ health workers, unpaid but essential, who prop up fragile systems. Photo: Mk_Photoz

The global health workforce crisis is often framed as a shortage of skills: not producing enough health workers, not having the right mix of skills, under-investment in training, or, increasingly, losing them to migration. But in many low- and middle-income countries (LMICs), it is none of these.

The crisis is a failure of fiscal design, made worse by a governance gap: no single institution is accountable for sustaining the health workforce over time. This disconnect exists because workforce policy sits across many institutions and financing decisions are made in places that do not feel the service delivery consequences.

This is the typical scenario: ministries of health plan for ambition, then ministries of finance review and approve the plans through the lens of fiscal reality. Public service commissions administer pay and benefits within tight ceilings, and donors fill gaps with short-term consultants and project-funded staff.

All of these stakeholders influence the workforce, but no one has end-to-end ownership of how countries pay for the people their health systems depend on.

The fiscal planning problem

It is budget season. The Ministry of Health of Country A submits its health workforce plan to the Ministry of Finance and receives a quick response: “You can recruit 500 people this year—no more.”

The human resource director reports this to the Minister of Health, who wonders how to fund the country’s health sector ambitions without the people to deliver them.

The budget arrives and another problem surfaces: the allocation for health workforce benefits is insufficient. The permanent secretary sighs—it is going to be another long year.

This scenario is very familiar in many countries. Health is one of the largest employers in government and has many positions at higher grades with more complex benefit packages. Unless fiscal planning explicitly accounts for these unique features of the health ministry, the standard budget envelope cannot keep up. The consequences are unsurprising: delayed or incomplete benefits, demotivation of health staff, attrition, migration, and, ultimately, brain drain.

Faced with chronic gaps, all too often ministries of health turn to development partners to fund ‘critical’ positions. But donors typically pay outside the civil service salary scale, creating a new problem: distortion of pay, with staff doing similar work being paid very differently. When donor funding ends, as it inevitably does, those staff either leave the country (if non-nationals) or cannot return to government pay (if nationals) at ‘reduced’ rates. And because knowledge transfer is rarely designed into these arrangements, much of the capability, including that from in-service trainings, leaves with them.

Ministries of finance impose ceilings largely because fiscal space is genuinely constrained. In many LMICs, a large share of the budget is already allocated to recurrent spending on salaries, yet the overall pie is still too small. Debt servicing, macroeconomic ceilings, rigid budget frameworks, and competing priorities limit how far governments can expand recruitment and benefits even when political will exists.

Add to this the reality that population growth continues to outpace increases in the health workforce. Governments respond by investing heavily in training yet are constrained by their financial inability to hire and retain workers at scale.

The result is a striking paradox underscored by findings from a recent World Health Organization (WHO) African Region review: countries train substantial numbers of skilled health workers each year, yet many remain unemployed despite massive frontline shortages.

This is a clear sign that the binding constraint is not production, but financing and absorption. Increasingly, these unhired graduates of health institutions are joining an emerging cadre of ‘volunteer’ health workers, unpaid but essential, who prop up fragile systems, creating risks of informal fees and uneven accountability.

Domestic solutions for financing and governance

We cannot donor-fund our way out of this crisis. Workforce costs are recurrent, and most external financing is not designed to carry long-term wage bills. The solutions must be domestic and address both financing and governance.

First, countries need stable, predictable domestic resources for the workforce that treat health workers as strategic investments and not costs to be contained. Health taxes are one such tool: taxes on products that drive disease can, where appropriately designed, contribute a sustainable stream of funding to strengthen health systems, including long-marginalised cadres such as community health workers. Debt swaps and other financing instruments can also free fiscal space for health, but these resources must be intentionally protected for long-term system foundations like the health workforce.

Second, the accountability gap needs to be addressed. Health workforce planning cannot remain fragmented across institutions. Countries need explicit coordination between the ministries of health and finance and the public service commission so that workforce numbers, pay, deployment, and benefits reflect service delivery realities. This includes proactive (financial and placement) planning based on projected graduate outputs from health training institutions, so that new professionals can be absorbed into the system.

The health sector has structural characteristics that differ from other parts of the public service, such as rural staffing needs and 24/7 service demands. These must be explicitly recognised within staffing rules, fiscal frameworks, and budget allocations, alongside retention strategies that support professional development, mobility, motivation, and access to high-quality working environments.

This opinion piece does not suggest that other issues that affect health workers do not matter. But until we fix the fiscal design and the governance architecture, the workforce crisis will persist, not because countries lack commitment, but because the system is not built to sustain the people it depends on.

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The opinions expressed are those of the author and do not necessarily reflect the position of Re:solve Global Health.

Dr Nkechi Olalere is a public health physician and health financing specialist with over two decades of experience spanning clinical medicine, insurance management, and global health policy. She has led health financing reforms across Africa and currently serves as senior strategic advisor to the Minister of Health in Sierra Leone. She chairs the Rapid Cycle Monitoring Subgroup of the Global Financing Facility (World Bank) and has published widely on health systems and financing innovation in peer-reviewed journals and policy outlets.