You count yourself fortunate to have some of the finest employees in the business. They perform their jobs with precision and good cheer and they always strive to deliver their best. So how are you going to look them in the eye this year and tell them there’s no money for a raise?
Indeed, as lower reimbursements, rising costs, and the economic crisis take their toll, practice administrators across the country are grappling with the challenge of how to reward their deserving staff when the resources run dry. “We as managers need to be communicating financial information to the physician owners of our practices and then it’s our job to be at the forefront in coming up with creative ideas to [compensate the staff] because morale is important,” says Ken Hertz, a former practice administrator and principal with the Medical Group Management Association’s Health Care Consulting Group. “How you treat your staff is representative of your values.”
In years of profit shortfall, says Hertz, the best way to prevent a costly exodus of your top talent is to develop new ideas for nonmonetary perks. You may also need to revisit your policy for doling out cost-of-living and merit-based raises. “Some businesses give out 5 percent raises every year because they’ve always done it that way,” says Hertz. “But you have to be clear on what your policy is and what is best for the practice.”
Beef up your benefits
Where nonmonetary perks are concerned, flexible hours are among the most valued by office staff, especially dual-income families that have more money than free time. “If you’ve done a good job at crosstraining your staff and coordinate the schedule, you can really [offer flexible hours] without a lot of disruption to the practice and it helps meet the needs of your employees,” says Hertz. “A lot of employees these days are anxious to get more time off to spend with their families.” If your business model allows, consider giving employees the opportunity to work shorter days, work part of their day during nontraditional office hours or take one day off per week from Monday through Friday. The upside is that employees who come in early or stay late are often more productive, since they can focus on their job undisturbed. Those who opt for fewer hours or one day off during the work week can also help your practice by making up for it on Saturday, giving your office a competitive edge over practices that do not offer weekend hours.
All in the family
Family practitioners and other physicians might also consider offering free healthcare services to the immediate family members of their staff, which is worth more to your employees than any raise, says David Flemming, a practice administrator for 43 years who recently joined the solo practice Crutchfield Dermatology in Eagan, Minn. “Obviously if you’re a heart surgeon that may not be the right choice,” he notes. “But perks like that help to build more of a team spirit and a ‘we’re all in this together’ attitude.”
Education reimbursement
If your budget allows, you can offer reimbursement (partial or full) for classes that earn your employees new credentials. Generally, certification classes only cost from a few hundred dollars to a few thousand. At the very least, you can garner goodwill by giving them paid time off to attend those classes on their own dime. Remember, such credentials make your workers more valuable to the practice.
New titles
You can’t rely on title promotions forever, of course, but for employees who have shown real initiative you can also reward their contribution with a more senior title, and greater responsibility over a project or division. Even if they don’t get an immediate bump in pay, most employees recognize that with added responsibility comes the opportunity for higher salaries down the road.
Accolades
Recognizing your employees, not just during review time but throughout the year, is a major factor in reducing turnover, increasing staff buy-in and keeping morale running high. That’s especially important when they get passed over for a raise. Be sure to publicly acknowledge staff members who go the extra mile, solve a problem or help the practice achieve a milestone. It doesn’t have to be formal. An e-mail, a word of thanks at your monthly meetings or just off-the-cuff verbal praise at their desk will do. Just be sure you do it in front of their peers. Flemming notes gift cards to the movies or local mall cost little but mean much to your staff.
Keep them informed
Sue Shive, administrator for Phoenix-based pulmonologist John N. Glover, a solo practitioner with six clinical and clerical workers, says it’s equally important to communicate your financial position with the staff on a regular basis. You know all year-long how your profits are shaping up, so don’t wait until December 24 to tell everyone they won’t be getting a bonus or annual raise. “We normally give out large year-end bonuses, but we’ve had some years where we weren’t able to give anything,” says Shive. “I keep everyone informed through staff meetings and show them our revenue, expenses, and financial spreadsheets so they’re all aware of what’s going on. I’m totally open and they know that some years we will get a bonus and some years we won’t.”
Make sacrifices
Before you decide there’s no money in the budget for a raise, of course, it’s a good idea to ask your doctors whether they might be willing to sacrifice some of their own pay to compensate the staff — especially for the employees they can not afford to lose. Shive says her physician elected to forego his monthly salary on several occasions when times were tight to ensure all staff members got paid. “I always let our employees know when he does that,” she says. “It makes them appreciate him so much more to know that he makes sacrifices, too, once in a while so everyone gets paid and we don’t have to lay anyone off.”
Performance bonuses
With all the challenges facing medical practices today, Hertz says administrators can no longer afford to perpetuate outdated policies — especially when it comes to parceling out practice profits. “It’s up to good management working with their physicians to develop creative solutions for saying, ‘How can we do this differently and accomplish the same kinds of things and still meet the needs for our staff?’” he says.
Practices that tie bonuses and raises to performance, he notes, are often better positioned to succeed. Rather than doling out cost-of-living raises every year, for example, establish quarterly or annual bonuses that allow your employees to share in the practice’s success. “Create some kind of formula that says if the practice hits these milestones in collections, patient volume, or accounts receivable, each employee will receive a bonus of X amount,” says Hertz. “That tells your staff that if the practice does well going forward then you’re all going to share in that success and if it doesn’t do well then we won’t have the resources.”
It may be a tough year for your practice, but that doesn’t mean you’ll suffer a mutiny from your staff. Keep your employees in the financial loop at all times, offer positive feedback often, and provide whatever smaller perks your practice can afford. You’ll earn their loyalty in return. “We have birthday lunches where we all go out and the doctor pays for it,” Shive says. “We always try to work around our employees’ personal lives and we’re always very good about thanking them for their hard work. It’s such a positive environment that I’ve had many of my people with me for 12 years.”
Shelly K. Schwartz, a freelance writer in Maplewood, N.J., has covered personal finance, technology, and healthcare for 12 years. Her work has appeared on CNN-Money.com, Bankrate.com, and Healthy Family magazine. She can be reached via physicianspractice@cmpmedica.com.
This article originally appeared in the April 2009 issue of Physicians Practice.
