Small adjustments to your fee structure may help you pay and motivate your team.
What are your expectations of your team?
In a typical practice, expectations often include providing exceptional client service and stellar patient care, along with longevity and professional growth as a veterinary team member. However, most practices say they struggle with recruiting, hiring and retaining employees. They are losing potential (and current) employees to other small businesses that pay more in salary and benefits.
If this applies to you, consider what you are paying your employees and what you expect in return.
Many practices believe they need to hire another veterinarian when things get very busy. A better strategy may be to effectively leverage quality support staff. In most cases, a veterinarian can see more, do more and be more productive with trained, quality staff members than with one more veterinarian on the floor.
The next time you have an impulse to hire another DVM, stop and think about the number of exam rooms you have available and how many veterinarians would be on the floor at any given time. Unless you have three or more rooms available to each DVM, you likely don’t need another veterinarian; you simply need to provide your current veterinarians with better staff support. And that means better paid and trained employees.
Look to your fees
In the 2019 edition of Well-Managed Practice Benchmarks, non-DVM staff pay was reported at a median of 22.5% of gross revenue.
If you are: (1) within this benchmark and (2) you find yourself competing with the fast-food industry in terms of hourly pay rates, then it’s time to review your fees and develop a plan to strategically raise them.
Veterinary business consultant Brenda Tassava went through this exercise with one of her clients, and found that with minor adjustments to its veterinary service fees, the practice would generate an additional $193,000 in revenue in the next 12 months if active patients and visits remained the same. “Using historical information, the Well-Managed Practice Benchmarks and demographic data, we raised most of the practice’s service fees from 50 cents to $10, depending on the item,” says Tassava. “The owner used part of this additional revenue to provide all support staff members with raises of $2 to $3 per hour, which stabilized her team and put a stop to what had previously been nearly constant turnover.”
In a visit a few months after this change, Tassava saw a noticeable difference in the staff. The new hires were distinctly more engaged, and training was going extremely well. The rest of the team had taken on a more professional approach to their jobs, which was evident in not only their interactions with clients and one another, but also in their revenue per unique patient visit, which had risen by $25. This was partly due to the service fee increases, but mainly indicated that the team members were educating clients more effectively and gaining more compliance to recommended services.
Bottom line impact
So, when a DVM at this practice sees three patients per hour, the practice gains an additional $75 per hour of revenue. After subtracting the cost of the raises (with a staff-to-doctor ratio of 4:1, the raises came to $8 to $12 per hour) the result is at least $63 in additional revenue per hour for the practice.
Take a hard look at what you are paying your employees and ask yourself if you are getting what you pay for. If you want better client service, quality patient care and a higher level of compliance, then pay for it. Pay your employees what they are worth to make a real impact to your bottom line.