10 lessons about employee pay
By Bob Levoy

It’s no secret that staff salaries account for most chiropractors’ highest operating expense.

At the same time, your staff is your most valuable asset. A finely-tuned balance is needed.

Consider these 10 hard-learned lessons:

1 More than anything else in your practice, your investment in support staff is likely to pay the highest dividend. Think of compensation as an investment, rather than an expense.

2 If you underpay your employees, you will attract less competent people whom you will probably let go.

Or, you will attract those who are just starting out. They will learn all they can from you, gain experience, and move on to better paying jobs. Either way, your salary policy will generate more staff turnover than loyalty.

3 Better performing practices tend to have more staff than the norm, not fewer. More support staff means you are better able to focus strictly on patient care — even if costs are higher. Better patient care, in turn, leads to greater patient satisfaction, referrals, and practice growth.

4 As Bob Townsend, former CEO of Avis said, “Thanks” is a really neglected form of compensation.

5 “Too many doctors trying to cut costs don’t care about staff. They just want a warm body standing there,” says Vicki Seibert, administrator for a solo medicine and gastroenterology practice in Clearwater, Fla. “It’s important to keep good staff long term, no matter what it takes in terms of salaries and benefits.”

6 “A cash-only incentive plan generates mercenary loyalty, not emotional loyalty” says Dianne Durkin, president of The Loyalty Factor, a training and consulting firm. “In the long run, people will not stay if the culture and environment are not congruent with their values and beliefs.”

7 “Don’t give raises to marginal employees,” says consultant Jeffrey J. Denning. “Raises never motivate workers to improve. To the contrary, a raise in pay signals the employer’s satisfaction with status quo. Further, if the employee is terminated and sues, she has simply to point to the history of pay raises to show she was doing a good job. Judgment for the plaintiff.”

8 “The rule of thumb is that in a healthy market, an unhappy employee will bolt the company for a 5 percent pay increase, but it will take at least an increase of 20 percent to compel a satisfied employee to jump ship,” says W. Michael Kelly, director of research at The Saratoga Institute, a division of PricewaterhouseCoopers.

Of course, pay is more important to some than others. We know many employees who struggle to pay their bills can understandably be enticed to leave for increases of less than 5 percent.

9 “Many doctors are overly concerned that one or more of their top employees has reached or surpassed some arbitrary ceiling for their position,” says management consultant, Dr. Charles Blair, Charlotte, N.C. “We’re more concerned with the effectiveness of individual employees in helping the practice grow profitably and thus focus on the ratio of staff payroll costs to practice gross income. As a result, we often find that paying top dollar for truly stellar employees can result in a more profitable practice.”

10 “Employers have to realize that salary and benefits alone are only a small part of an employee’s ‘value equation,’” says Michael Lowenstein, managing director of Customer Retention Associates in Collingswood, N.J. “Employees want enrichment.

They want inclusion. They want communication and participation. They want training. They want recognition. They want to have pride in where they work.”

Reality check: Coddle your employees. Without them, you may not have a practice. If necessary, pay them before you pay yourself.

Give them benefits you would not take for yourself. Spoil them and empower them in every way possible.

Bob Levoy’s newest book, 222 Secrets of Hiring, Managing and Retaining Great Employees in Healthcare Practices, is published by Jones and Bartlett Publishers. He can be reached at b.levoy@att.net.