Income disparity provides elusive; too many variables

Opinions on why female practitioners typically make less money than their male counterparts are as diverse as the stereotypes.

Tax status, hours worked, staff compensation, location, experience and a litany of other factors all remain critical in accurately determining compensation trends. The reality is that women are typically paid less, and it's documented again in DVM Newsmagazine's latest survey .

Consider this: Female practice owners average $73,530, while male practice owners average $95,029, according to the latest DVM Newsmagazine survey.

Why this trend occurs is anyone's guess.

Expert perspective

"Women tend to put in fewer hours," says Dr. David Gerber, president, Simmons & Associates Northwest, a veterinary consulting and brokerage agency. "Even on a per-hour basis, I suspect women veterinarians are paid less than men."

Gerber hypothesizes that female practitioners could offer more care than men as far as pro-bono work, which would lower their profit margin.

"Female business owners in general tend to be very good with taking care of the business," Gerber says. "It's likely women are making a conscious decision to make less of a profit than what they are capable of."

Reason for unbalance

Gerber offers several observations based on his experience to define the wage gap:

• Female owners tend to take better care of their staffs. Taking into consideration benefits, time-off, days off to care for sick children. Male owners on average are less generous.

• Female owners are more likely to be a second income in the household. A female owner's need to make more money is less than that of a male practice owner, who may be the prime source of income.

• Female practice owners tend to charge less for services than men.

• A recent appraisal of a veterinary practice owned by two women was rich in employee benefits and lower in profits, Gerber says.

• Women becoming more predominate in the profession means they are younger, on average, and would make less than a male practitioner who has been in the profession for years. There is a higher percent of older male practitioners than women. It isn't uncommon for them to be earning more with their higher level of experience.

All of these aspects can contribute to lower profitability, Gerber adds.

Gerber says as time progresses, wage issues will become more balanced.

"There is a huge preponderance of older men and a huge preponderance of younger women," he says. "This will be a non-issue five years or so from now."

AAHA study

No correlation was found between hours worked per week and owner's salaries for male or female practitioners, according to an American Animal Hospital Association (AAHA) study conducted this year.

"There is a significance in wage differences between owners but not associates," says AAHA Executive Director Dr. John Albers. "There is no definitive reason given in the AAHA study data, or any other survey's data. Everything is left to speculation."

A difference in salaries was noted among females veterinarians in a theory composed from the AAHA survey citing female practitioners might tend to open a practice with other owners as compared to opening a sole proprietorship.

Data collected by AAHA did reveal a significant difference in salaries of sole proprietors and owners of multiple-owner practices. Sole proprietors on average earn $98,511 compared to $85,718 of multiple-owned practices.

"This pay inconsistency begs an answer to the question 'Why?"' Albers says. "The next study on this topic should try to answer that question. It is obvious that it exists."

Accountant's perspective

This theory would support Dr. Marsha Heinke's opinion to income variances among male and female owners. The different ways practices are categorized on tax returns makes a difference in the way total profits are configured.

Heinke, DVM, CPA, says she has looked at tax returns from practice owners from around the country, and there is much more to consider when making a statement about practice owner's incomes.

"What are the practice owners including when considering their income?" Heinke says. "Tax law plays a huge role in income—everything depends on the type of organization the veterinarian owns."

A limited liability, subchapter S-corporation, C-corporation, self-proprietor and partnership each employ different ways to calculate deductions.

"The vast number of owners do not have a good grasp on compensation," Heinke says. "Male practice owners who likely have been owners longer may have paid off their mortgage to their practice, so considering there isn't a payment it seems they are making a higher profit."

"Female veterinarians are very efficient with their time and are very high producers, higher on average than men," Heinke says.

Different studies will express a variance of results. The 1998 Brakke study conducted by the Brakke Consulting Practice Management Group offers more support to the DVM Newsmagazine and AAHA studies. In 1998, female practitioners/owners made less than men.

However, there is no data to support a reason why this is the case and wages for both genders are significantly less than today's polled veterinarians.

"What I have seen is female practice owners charging more than men," Heinke says. "Women tend to look at situations differently than men."

"Female managers may be more generous with their employees because they develop a friendship or a family-like atmosphere in the work environment. This may make it more difficult to separate personal issues from business situations," Heinke says.

According to the DVM Newsmagazine survey, male respondents are more likely to indicate they have enough money to live comfortably compared to females.

Boiling it down

"Anyone who has been able to get through veterinary school has proven themselves intellectually would likely be able to run a business. Age, taxes, mortgages and employee turnovers, all play a role in final income level. "It would be very difficult to compare apples to apples in a survey to get exact numbers."

"With employee shortages and attracting good employees to the profession becoming a growing concern, every practice owner will need to do things the right way to meet outside economic sources," she says. "I do not see female practitioners whether they are owners or associates as being less productive, and they are equally competent."