Per Diem or Contract? Matching Your Facility’s Staffing Solution to the Coverage Gap
A simple way to think about per diem and contract coverage to find the right solution for every staffing gap.
Staffing a long-term care facility is a constant puzzle, and per diem is a quick way to fill in the missing pieces. Someone calls off at 5 AM, you bring in an agency worker to fill the shift, and the day goes on. It's fast, it's flexible, and it's how many long-term care facilities handle the day-to-day.
What happens when a bigger staffing hurdle hits? A nurse goes out on maternity leave, a key aide retires, a unit sits short for weeks… The instinct is to keep doing what already works. You maximize on your team’s availability, request overtime from your most reliable workers, and fill the remaining gaps one per diem shift at a time.
A pattern starts to reveal itself: you keep requesting per diem coverage for that same shift day after day, week after week. Your agency partner notices and suggests you fill these recurring gaps with a contract instead. What’s your initial reaction?
For many facility leaders, "contract" can trigger an immediate sense of uncertainty. The word reads like a long commitment you can't get out of. It sounds expensive and makes you feel like you’re locking in before you know whether it'll solve your needs.
That hesitation is usually built on an assumption about contracts that doesn't match how they work in practice. In fact, holding onto per diem for a job it wasn't built for tends to cost more in the end than it appears on paper.
Start with the gap, not the solution.
Do you find yourself judging staffing options by how risky they seem? Per diem feels safe and flexible. Contracts feel like a commitment. The trouble with that mindset is you’re sorting by feeling instead of by fit.
Think of staffing gaps like missing pieces in your puzzle. Every gap has unique characteristics; how long it'll last, how well you can see it coming, and how hard it is to fill. Once you can picture the shape of the gap, the right solution becomes clear. Neither staffing solution (per diem or contracts) is better than the other by design. They each have their role, and neither is meant to do the other's job.
When per diem is exactly right.
Per diem is built for the gaps you can't predict: a call-off for a family emergency, the CNA out sick for two days, or the Saturday that suddenly has a hole in it. When a need is short, immediate, or out of nowhere, per diem is the right call. You're not signing up for weeks of coverage to solve a problem that's over by Tuesday.
The tradeoff for the speed of per diem is continuity for your facility. For a short, surprise gap that needs a quick turnaround, that's the right trade, every time. However, not every gap is short or surprising. Some you can see coming from a mile away and you already know they'll stick around. Filling a lasting gap one shift at a time is like forcing the wrong puzzle piece into place.
When a contract fits.
Some gaps are predictable and lasting, like when a nurse has surgery and will be out eight weeks, a staff member goes on maternity leave, or someone gives notice and you know a hard-to-fill vacancy is coming. A contract for extended coverage fits this gap cleanly. Instead of a new face every shift, you get the same person, week after week, learning your facility’s unique dynamic as they go.
This is what we meant earlier about per diem costing more when trying to do a job it wasn’t built for. Stretched across a long gap, per diem piles on extra admin work for your scheduler, repeated orientation for each new person, and disconnected care the residents feel when they see a rotating cast of faces. A contract removes those challenges, often at the rate you’re already comfortable with.
Filling the hardest gaps.
Not every gap can be filled locally, and not every agency can look beyond the local pool. Some predictable, lasting gaps come with complications that call for a wider search.
The first is location. If you're in a rural area or a thin local labor market, there may be simply no one nearby to take a contract locally. An agency that can bring in travelers widens the search beyond your region.
The second is specialization. When a role calls for specific experience or a skill set that's scarce in your area, reaching beyond the local pool means you can bring in the right person instead of settling for whoever's available nearby.
Contracts cost less than you’d expect.
Here's what surprises a lot of facility leaders. Contract bill rates are often in line with what you pay for per diem shifts. A higher rate is sometimes needed to bring in the right candidate, but it's rarely the leap you’d imagine.
So weigh the cost of a contract against the alternative: the cost of not filling at all. An open gap means overtime piling onto your core staff, burnout driving good people out, and coverage you can't sustain. Stacked against that, the math often looks different than it first appears.
About that "locked-in" feeling.
The scariest part of the word "contract" is the implied commitment. So, let's be specific about how it really works.
You set the length. Contracts typically run 4 to 13 weeks. If you're hesitant, start on the shorter end and see how it goes.
You choose the healthcare professional. Once you post a contract need, we get to work on compiling local and/or travel candidates for you, and send you resumes and the bill rate for each. We encourage you to interview the candidates yourself to select the best fit.
If it's working, you extend. Found someone who clicks with your team and the need hasn't gone away? Ask them to extend their assignment and keep a good thing going. No new face to break in, no restarting the process.
For contracts, the flexibility sits up front: you decide how big of a step to take, hand select a healthcare professional, then take a bigger step only if you want to.
The real payoff: a familiar face.
Everything we’ve covered so far has been about piecing together the puzzle, but the best reason to consider a contract is what happens after the gap is filled. When the same person comes back day after day, they learn about your residents, your staff, and your routines. By the second week, they're not a visitor. They're part of the floor. That continuity pays off in two big ways.
Residents get consistent care from someone who knows them on a personal level. They see the same trusted person for weeks instead of a stranger every other day.
Your core team gets a real teammate; someone who shares the load, knows the facility dynamic, and makes a hard day easier.
Sometimes the best proof comes from the floor. At one facility, a GrapeTree CNA on a contract assignment helped a newly hired staff member learn the ropes, and here’s how that new hire described the working relationship they formed:
"Miranda was THE BEST! She helped me learn, she was patient, she wholeheartedly believed that as a team, everything was everyone's job... I absolutely loved getting to know her and working with her, she made working fun."
Which solution fits your gap?
The next time the same open shift keeps landing on your schedule day after day, you'll know what it's telling you. A short, unpredictable gap is per diem's job. A gap you can see lasting is a contract's. Start with the gap, and the right solution tends to pick itself.
Need help piecing together the puzzle? Some gaps are harder to read than others, and that's what we're here for. GrapeTree has been a staffing partner to long-term care facilities since 1999. We're a Joint Commission-certified team you can reach 24/7, with real people who'll help you think it through instead of an app that leaves you guessing.
Coverage Gap Details | Best Solution |
Brief + Unexpected | Per Diem |
Lasting + Predictable + Local Talent Available | Contract (Local) |
Lasting + Predictable + Local Talent or Specialization Not Available | Contract (Travel) |
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