Negotiating Salaries

October 2023 |

Try pro-sal pay formulas to develop a competitive pay scale for your doctors.

Most veterinarians who interview with your practice today typically have five to 10 other offers on the table, estimates Heather Romano, a veterinary business consultant.

How can you attract them to accept a position at your practice? Part of the answer lies in how you pay them. In fact, one of the most common questions raised by veterinary practice owners is how and what to pay their doctors. “I’m constantly being asked this,” says Romano.

Then and Now

Ten to 15 years ago, it was common for doctors to earn production only, with their paychecks entirely based on how much money they brought into the hospital. But this “production-only” model won’t work with new graduates, says Romano. “Young doctors understand that it’s not easy to build up a clientele, so they’ll be very hesitant to accept a production-only position,” she says.

Save production-only pay for very experienced doctors, or for doctors who want to take large amounts of time off and don’t want to have to worry about the tracking their PTO, Romano recommends.

Her advice is to use base plus production (also called pro-sal): “Essentially you pay a base salary, and then however much money the doctors make over X amount of dollars per month, you pay them a percentage of that production,” she explains.

Upping Your Offer

But what should that percentage be? Be aware, says Romano, that current expectations of appropriate percentages have changed for everyone from new grads to specialists.

Five to 10 years ago, normal production was 20%, and most doctors didn’t get a raise in their percentage. “They were paid 20%, and if they wanted to make more money, then they needed to bring in more money,” says Romano. “That was just the way it worked.”

These days, 20% is still appropriate for new graduates, she says, but doctors with five-plus years of experience will be looking for between 22% and 26%, and specialists will likely want up to 35% of their revenue in production.

“That may sound really high, but hospitals that pay this end up finding that those doctors make substantially more money because they’re so motivated,” says Romano. “So yes, it takes up a higher amount of revenue, but then they make so much more revenue that it’s worth it.”

Doctors who are on a higher production percentage work much harder to achieve their production, says Romano. “I recommend that if you’ve got rock star doctors you don’t ever want to lose, consider bumping up their percentage.”

Expect Negotiation

Additionally, she says, when you’re hiring, expect and appreciate negotiation. Do not rescind offers to doctors who try to negotiate their salary—for example asking for 23% when you offered them 20%.

“We should want people to come into our hospitals and negotiate with us,” says Romano. “It means they’re actually interested in the job! So if they say they want at least 23%, you may want to highly consider giving that to them. It might mean they’ll choose your hospital instead of going to work for one of your competitors.”

Keep in mind, too, that Millennials are not shy about asking for what they want. “You can expect negotiation with pretty much any new hire nowadays—we’ve even had reports of kennel helpers trying to negotiate their salary,” says Romano. “And if you’re only offering minimum wage and they’re asking for $1 more than that, again, consider raising your pay.”