Tackling turnover

August 1, 2008
Rachael Zimlich, BSN, RN

Freelance writer Rachael Zimlich worked as a reporter for dvm360 magazine before returning to school to become a registered nurse. She now works at The Cleveland Clinic.

Lakewood, Colo. - Associate veterinarians are jumping jobs faster than the average American worker, according to a new study, and salaries that don't keep pace with inflation could be partly to blame.

Lakewood, Colo. — Associate veterinarians are jumping jobs faster than the average American worker, according to a new study, and salaries that don't keep pace with inflation could be partly to blame.

Average annual employee turnover at veterinary practices is at 29.7 percent, or about double the national average of 12 to 15 percent, according to the fifth edition of Compensation & Benefits, a guide compiled by the American Animal Hospital Association (AAHA).

Broken down, that figure includes turnover rates of 20 percent for associate veterinarians, 13 percent for managers, 35 percent for technicians and 44 percent for other staff, with turnover rates reaching the highest in urban and mid-sized practices.

Many factors are involved in the study of turnover rates, notes the guide, but one thing that is consistent is the high price employee turnover can cost a business. Costs of turnover, aside from the time owners and personnel must devote to replacing an employee, include training and recruitment costs, plus the risk of running a short-staffed and possibly inefficient practice, according to the guide.

Annual salaries

"It's tempting, especially in this economy, to say that your compensation and benefits are 'good enough' because they're average," says John Albers, DVM and AAHA's executive director in the guide's introduction. "While paying low wages and keeping benefits to a minimum may save you money now, the cost is high in the long run. You need to provide above-average compensation and benefits to attract and keep above-average employees."

This may be especially true in coming years, with a recent study from Tufts University's Cummings School of Veterinary Medicine predicting more than 1,000 vacancies in the profession in New England alone by 2014.

Salaries behind inflation

In a comparative study of veterinary salaries from 2003 to 2007, the guide shows that the compensation for owner and associate veterinarians did not keep up with the national inflation rate of about 6 percent. While owner compensation increased by almost 32 percent from 2003 to 2005, it grew only by 1.3 percent from 2005 to 2007. Associate veterinarian pay increased 15 percent over four years — almost 20 percent in the first two years covered by the study, but dropping by almost 5 percent over the next two years. Registered technician compensation was the most stable, growing at 7.5 percent over the entire four-year span.

Average compensation and profits for a practice owner was $126,299 per year, or about 30 percent of their productivity. That reward was the result of working 47 hours per week, 49 weeks a year, generating an average of $401,069 personal annual production dollars from 3,773 annual invoices at an average of $123 each, according to the study. The average associate also worked 49 weeks a year, but worked only 43 hours per week and took home about $71,000 per year. Compensation equaled about 22.5 percent of the associate's production revenue of about $354,410 per year from about 3,015 invoices at $145 each.

But money isn't the only factor in keeping employees happy, says veterinary practice consultant Robin Brogdon, MA, president of BluePrint Veterinary Marketing Group Inc. and a member of the Association of Veterinary Practice Management Consultants and Advisors.

"I think the right guidance and nurturing can create an environment that can help a new graduate feel they are in the right place for the long term," Brogdon says.

On the homefront

New practice owner Susanna Aldridge, a 2001 graduate of the Purdue University College of Veterinary Medicine, knows first-hand some of the pitfalls of being an associate. After graduation, she says she worked for two years as an associate at a private practice. She left for better compensation at a multi-practice veterinary hospital chain, but says she also didn't get the mentoring she had hoped for in her first job experience. Raises and vacation time were granted based on production, another detractor, and some of the hospitals she worked in were very slow. But when she made suggestions to bring in more business, they were ignored, she says.

"I have a couple of friends, one that just recently opened a practice also, with the same problems. It was the same type of frustrations. You don't have the ability to impact the way things are run, you don't get much say in the business and the medical side of things, yet you are limited to what you can bring in production wise because of the way things are done," Aldridge says.

Aldrige purchased her own practice, Tender Loving Care Animal Hospital in Martinsville, Ind., in January 2008 and just hired her first employee. Her experiences as a frustrated associate will help her manage her part-time associate, she says.

"It was kind of good I had all these associate experiences," she explains. "And being a recent grad myself, I understand the frustrations of an associate, so I think, hopefully, I'm a more fair owner/boss."

But not all practices are experiencing high turnover. At Amber Leaf Veterinary Hospital in suburban Chicago, most of the four associate veterinarians have worked at the practice for at least five years, says owner Dr. Steven Rohrback, and one is about to become a partner. The employees who left did so when spouses were transferred or to start families. With more female veterinarians than males, Rohrback says he thinks female associates wanting to start a family is a big factor in departures.

"I've lost female associates before, because they have left to have children and not come back," Rohrback says, adding he has heard this same complaint among other owners at the national level.

That factor aside, Rohrback says he strives to keep his practice competitive in many ways, from salary to hours, to keep his associates happy. Communication is open and he tries to give everyone's opinion consideration. He also loves to act as a mentor and encourage his associates' specialty interests, Rohrback says.

"Mentoring's important. I can't imagine why a veterinarian wouldn't mentor young people," he says. "That's one of the best parts of the practice and it increases the effectiveness of your practice."

Though he is willing to be flexible, Rohrback admits it sometimes is hard to get everything he wants in a new hire. His clinic used to offer late night and weekend hours and emergency services, but he has cut way back because he couldn't find anyone willing to work those hours.

"Try to hire a new veterinarian nowadays and tell them we do our own emergencies. It's not going to happen," Rohrback says. "It used to be the clients dictated what the veterinarian's hours were. Not any more. Veterinarians coming out of school dictate where veterinary medicine is going."

But attitudes like Rohrback's aren't always commonplace, and owners often are not taught management skills, Brogdon says. Employees who feel valued and (feel) like they are learning are more likely to stay at a business, even if they aren't entirely happy with their pay, Brogdon adds.

Still, Brogdon agrees that salaries can be a big part of one's decision to leave, and allowing employees to leave because owners can't afford to pay more is "penny wise and pound foolish," Brogdon says.

"The rule of thumb is, it takes one-and-a-half annual salaries to replace somebody," Brogdon says, adding it is cheaper to pay an employee more than to lose them, and owners should review their own fees before letting an employee jump ship.