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Low-cost benefits, big-time payoffs
People make your practice a success, so take care of your team members-and earn a profit too. Try these 3 ideas.
Balancing staff benefits and practice profitability has always been a challenge, but it's even more of a head-scratcher during slow economic times. When practice finances are a little tight or your profitability has slightly declined, it's tempting to solve the puzzle by cutting staff benefits. Stop. Freeze. Don't move. Take a deep breath and consider the consequences of this "solution."
It's not easy to build a top-notch team. In fact, it takes many practice owners years to find—and keep—skillful team members they can trust. With one little change to your practice's benefits policy, you could wipe out all the team-building you've accomplished. Think about it. Benefit cuts make for unhappy employees, and unhappy employees leave. When they do, it costs you roughly a team member's yearly salary to replace each one. That's not an attractive expense even during a banner year.
Of course, your loyal team members will stay on board regardless. But the reduced benefits will undoubtedly lower their morale. As a result, you may still hurt your bottom line even though you've reduced some expenses. Unmotivated, underpaid employees simply aren't as productive as those who feel taken care of and valued. If you cut benefits, you risk cutting revenue in the long run.
So what's the answer to this perpetual conundrum? Offer benefits that cost you little to nothing—they may even save you some money—and keep your profit-making team. Here are three options.
1. Divvy out pet policies
Veterinary team members often swoon over the idea of getting reduced-price care for their pets. But the amount this benefit actually costs your practice might make you faint—and not in a good way.
Your practice pays fixed inventory costs and you lose out on revenue the doctors might have generated during the time they were treating employees' pets. There's also the IRS ruling stating that any employee discount of more than 20 percent needs to be counted as income on that employee's W-2 form. That's an administrative hassle for you and a tax liability for team members. And, of course, if you "forget" this rule and the IRS audits you, your costs will be much higher.
To continue offering this popular perk without hurting your practice, consider providing pet insurance. Many owners have opted to purchase a policy for one pet per team member. This staff benefit ends up benefiting the practice. First, you'll be reimbursed for the care you offer. Second, your team members will become more familiar with pet insurance, making them more likely to promote it to clients. Clients with pet insurance are more apt to comply with recommendations, so you'll be able to better care for their pets and generate revenue. Third, there's no worries if the IRS comes knocking.
The pluses don't stop there. Several pet insurance companies offer discounts on policies purchased by veterinarians or team members, so you'll be able to get a bargain price. What's more, some companies will send you reconciliation statements at the end of the year listing what you paid for the policies and what they paid you in reimbursements. This allows you to track exactly what the benefit costs—or earns. Earns? That's right, providing pet insurance policies as a staff benefit might actually net you a profit. Without pet insurance, if you gave your employees a 50 percent discount, you were losing 50 percent of your revenue. With pet insurance, you lose no revenue and the reimbursements might just outweigh the price you paid for the policies.
To maximize this benefit, consider offering additional policies as a longevity bonus. For example, you might provide insurance for two or three of a team member's pets if he or she has been with you for four years.
2. Put out a pet welcome
Another way to enhance employee benefits and also maintain or improve your profitability is to allow employees to bring their pets to work. Several studies show that team members rank this benefit higher than extra vacation days. Many practices I've worked with like to use this perk for special rewards, such as for team members who've been with the practice for 10 years or for the employee of the month. What these practices allow varies, but the options range from hosting team members' pets once every other week to inviting the employee of the month to bring in his or her pet every day for a month.
Of course, in order for this benefit to be possible at your practice, you must have adequate cage space and implement a formal pets-at-work policy. The policy should outline when employees can bring in their pets, the number of pets they're are allowed to bring, how the pets will be housed (in cages or roaming free), the amount of time employees are allowed to spend with their pets, when the pets will be walked, and how employees should clean up after their pets. What's more, certain areas of the clinic need to be off-limits to prevent employees' pets from tangling with patients or clients—and exposing you to legal liability.
3. Let staff get a life
If you ask your team members which benefit they most desire, they'll probably say, "More time off or flex scheduling." Time for family, friends, and fun is important. Here are two ways to give employees more of what they want:
Flexible scheduling. First off, it costs you nothing and it's fairly easy to implement. Many practices allow employees to work four 10-hour days instead of the usual five days a week, with shifts allotted so that all workdays are covered. Other practices use a rotating schedule where a team member works Saturday one week but not the next, for instance. Don't be afraid to solicit your employees' input—it can be very enlightening. Many team members can expertly create a schedule that meets the practice's needs as well as their own. I've even suggested that some practices give their employees a template of needed staff coverage and let the team members fill it in.
Paid time off (PTO). This is a popular benefit that may save you money in the long run. Consider this: If you up employees' vacation time from two weeks to three after five years of employment, you must pay employees who quit after five years and one day for the extra week. You wouldn't owe this employee with a PTO program, which prorates vacation based on time of employment. If team members who've been with you for five years are allowed to earn three weeks of PTO, employees who quit after five years and one day would have earned their two weeks of vacation and nothing more. I suggest offering new employees one day of PTO for every month they work at your practice. I also like the idea of enhancing this benefit for team members with seniority—the longer they work for you, the more PTO they can accrue.
I'm also a big proponent of employee incentive programs. They're one of the best ways to control employee benefits while enhancing profitability. I've looked at numerous programs and tried many of them at various practices, and the one I'm partial to involves employee performance reviews and increases in practice gross. For an in-depth look at how to implement such a program, read "Give Your team a Cut" in Related Links below.
Try to think of balancing staff benefits and profitability as a possibility instead of a paradox. Implementing cost-effective benefits rather than cutting perks offers you a chance to keep your team happy and your bottom line healthy.
Mark Opperman, CVPM
Mark Opperman, CVPM, is a Veterinary Economics Editorial Advisory Board member and owner of VMC Inc. in Evergreen, Colo. Give your team members the benefit of CE by sending them to hear Opperman speak on Aug. 24 at Firstline Live, which is held in conjunction with CVC Central in Kansas City, Mo. Send comments to email@example.com