Locum tenens is one of the most consistently growing segments in all of healthcare staffing and one of the most operationally complex. For staffing agencies, understanding what locum tenens is, why demand is climbing, and how the placement process works is the foundation for building a competitive practice in this space.
This guide covers everything: the definition and history, the mechanics of a placement, who uses it and why, and what separates healthcare agencies that scale their locum business from those that don't.
What Does "Locum Tenens" Mean?
The phrase locum tenens comes from Latin, meaning "to hold the place of." In a medical context, it refers to a licensed healthcare provider who temporarily fills a clinical position at a facility, standing in for an absent or vacant physician, nurse practitioner, physician assistant, or other clinician.
The term was formally adopted by the healthcare staffing industry in 1979 when Dr. Therus Kolff founded the first locum tenens staffing firm. Since then, it has grown from a niche solution into a core workforce strategy used by the majority of U.S. health systems.
Today, the locum tenens market is valued at approximately $9.6 billion in the United States alone, and it is the only segment of temporary healthcare staffing that has grown every single year since 2021.
How Does Locum Tenens Work?
At its core, the locum tenens model is a staffing arrangement in which:
- A healthcare facility identifies a coverage gap — a vacancy, a leave of absence, a seasonal surge, or a position that is difficult to fill permanently.
- The facility engages a staffing agency to source qualified candidates.
- The agency recruits a licensed provider, manages credentialing and compliance, and places the provider at the facility for a defined period.
- The provider works as an independent contractor through the agency, which is compensated by the facility.
Assignments can range from a single day to an open-ended engagement lasting many months. The staffing agency typically handles travel logistics, housing, malpractice insurance coverage, and the credentialing and licensing support required for each new state or facility.
This model works across nearly every clinical specialty, though demand is especially strong in psychiatry, radiology, emergency medicine, OB/GYN, and orthopedic surgery, areas where physician shortages and high burnout rates are most acute.
Who Uses Locum Tenens?
Healthcare Facilities
Hospitals, health systems, rural clinics, urgent care centers, and private practices all rely on locum tenens to maintain continuity of care. Common scenarios include:
- Planned coverage gaps: Vacations, maternity leave, sabbaticals, and academic schedules create predictable, time-limited needs that locum providers fill precisely.
- Unexpected vacancies: Sudden resignations, illness, or family emergencies can leave a department without coverage overnight. Locums provide an on-demand solution.
- Seasonal demand spikes: Patient volumes fluctuate. Rather than overstaffing year-round, facilities use locums to match staffing levels to demand.
- Permanent vacancy bridging: In competitive or underserved markets, recruiting a permanent physician can take six to twelve months. Locum providers keep the department running while that search unfolds.
- Service line expansion: Facilities looking to add new specialties or extend hours often pilot the effort with locum providers before committing to permanent hires.
According to CHG Healthcare's 2025 State of Locum Tenens Report, 81% of U.S. healthcare facilities used locum tenens providers in 2024 — and 80% expect their usage to remain the same or increase going forward.
Locum Tenens Providers
Physicians, nurse practitioners, physician assistants, CRNAs, and other advanced practice providers work locum tenens for a variety of reasons.
- Flexibility and autonomy: Nearly half of providers surveyed cite flexible scheduling as their primary motivation. Locum tenens allows clinicians to choose when, where, and how much they work.
- Competitive compensation: Because locum providers work as independent contractors and are not entitled to traditional benefits, their hourly rates are typically higher than those of permanent employees.
- Geographic variety: Locums is popular among providers who want to experience different regions, practice environments, or patient populations — particularly those nearing retirement or in between permanent roles.
- Burnout recovery: Given that 55% of physicians now report debilitating stress, many clinicians turn to locum tenens as a way to maintain a clinical career while regaining control over their work-life balance.
The workforce trends are clear: approximately 56,000 physicians in the U.S. currently work as locum tenens, and 71% of all U.S.-based physicians report a positive impression of the model.
Why Is Demand for Locum Tenens Growing?
The locum tenens market is not growing simply because it is a useful concept. It is growing because it is a structural necessity driven by forces that are not going away.
The Physician Shortage Is Real and Worsening
The Association of American Medical Colleges (AAMC) projects a U.S. physician shortage of between 37,800 and 124,000 providers by 2034. The Health Resources and Services Administration (HRSA) projects even sharper deficits in specific specialties, including a projected -36% shortage in vascular surgery and -27% in family medicine by 2037.
These shortages mean facilities cannot simply recruit their way out of coverage gaps. Locum tenens is increasingly the first, not the last, resort.
Provider Burnout Is Accelerating Turnover
Physician burnout has reached levels comparable to the height of the pandemic. When experienced clinicians reduce their hours, take leaves of absence, or exit the workforce earlier than planned, the facilities they leave behind face immediate, unplanned coverage needs—exactly the kind that locum tenens is designed to solve.
Advanced Practice Providers Are Expanding the Market
Nurse practitioners are among the fastest-growing occupational categories in the U.S., with the Bureau of Labor Statistics projecting 40.9% job growth through 2034. As scope-of-practice regulations evolve to allow APPs to take on more autonomous roles, demand for locum nurse practitioners, physician assistants, and CRNAs is rising rapidly. In the first half of 2024 alone, locum APP staffing revenue grew nearly 25% year over year.
Rural Communities Are Underserved
Rural hospitals and safety-net facilities face some of the most persistent staffing gaps in the country. These organizations often cannot offer the compensation packages needed to attract permanent staff, making locum tenens their primary mechanism for maintaining care access.
Tele-Locums Is Opening New Frontiers
The emergence of telehealth has extended the locum model into virtual practice. Tele-locum arrangements—particularly in psychiatry, radiology, and after-hours internal medicine—allow providers to work across multiple states simultaneously, and facilities to access a national talent pool without relocation. As telehealth policies continue to evolve in 2026, demand for tele-locum coverage is expected to grow alongside in-person placements.
The Locum Tenens Placement Process
For staffing agencies, executing a successful locum placement involves a distinct workflow that differs meaningfully from traditional permanent or even travel nursing placements. The core steps are:
1. Job Requisition: The facility communicates its coverage needs: specialty, dates, shift structure, and required credentials.
2. Candidate Sourcing and Submission: The agency identifies qualified providers from its existing network or active pipelines and submits a shortlist to the facility.
3. Client Review and Selection: The facility reviews candidates and selects the preferred provider. Speed here is competitive; top locum providers are often considering multiple offers simultaneously.
4. Credentialing and Primary-Source Verification: This is the most time-intensive phase. The agency must verify the provider's state licensure for the assignment location, obtain malpractice insurance, and complete facility-specific privileging requirements. This phase alone can take weeks if it is not managed with purpose-built workflows.
5. Scheduling and Shift Confirmation: Once the provider is cleared, shifts are confirmed and the engagement begins.
Most delays in locum placements occur between steps three and five. Credentialing is the most common bottleneck, followed by fragmented communication between recruiting, credentialing, and scheduling teams working in separate systems.
» Read more: Speeding Time-to-Start for Locum Tenens
What Separates High-Performing Locum Staffing Agencies?
Agencies that consistently win in the locum market share a few operational characteristics that their competitors lack.
Integrated technology. The highest-performing agencies manage their entire locum workflow—candidate data, credential documents, licensure tracking, and scheduling—within a single connected platform. When an applicant tracking system (ATS) automatically triggers a credentialing workflow the moment a candidate is selected, and that credentialing system feeds status updates directly into a workforce management tool, the result is faster placements, fewer errors, and a better experience for both the provider and the facility.
Proactive compliance management. Locum providers often hold licenses in multiple states and work under a variety of facility-specific privilege requirements. Agencies that track expiry dates automatically, and alert both the recruiter and the provider well before a lapse, never lose placements to preventable compliance gaps.
Provider experience. The locum tenens market is candidate-driven. Providers have options, and they return to agencies that make their experience smooth: clear credentialing checklists, responsive communication, seamless travel and housing logistics, and timely pay. The operational quality of an agency directly affects its ability to maintain a high-quality provider network.
Specialty depth. Agencies with real expertise in a specific specialty—psychiatry, radiology, anesthesiology—develop the relationships, knowledge, and pipeline depth that generalists cannot match. Facilities trust specialists when coverage is urgent.
Locum Tenens Is Not a Niche. It’s a Growth Market
The locum tenens industry has grown from roughly $5.2 billion in 2019 to a projected $9.9 billion by 2026, and Grand View Research forecasts it will reach $14.6 billion by 2030 at a compound annual growth rate of 7.6%.
For healthcare staffing agencies, this is not a side practice. It is an increasingly central part of a diversified, resilient staffing business. The organizations investing now in purpose-built workflows, integrated technology, and specialty expertise will be best positioned to meet demand as the physician shortage deepens over the next decade.
If your agency places locum tenens providers, or is considering expanding into the space, the foundational question is not whether demand will exist—it will. The question is whether your operational infrastructure can support fast, compliant, scalable placements.
Ready to Optimize Your Locum Placements?
Ceipal's healthcare-focused ATS is built to support the full locum tenens workflow, from candidate sourcing and document collection to credentialing coordination and scheduling. Staffing firms use Ceipal to reduce time-to-start, eliminate data silos, and deliver a better experience for both providers and facilities.
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