Hi, it's Dr.
Weitz. Thank you so much for joining me for this episode
of the private medical practice academy.
Hiring good employees for your medical business can be quite challenging.
And there are many factors that ultimately affect your ability to
fill your open positions.
Obviously how much you're going to pay is one of those
issues. And in episode 34,
I talked to you about how to determine what you should
pay your employees.
However, salary is only one part of the overall compensation package,
potential hires,
often rank benefits as one of the top factors impacting their
decision to accept your offer.
I can tell you firsthand that what benefits you offer will
have an influence over a potential employees decision,
whether they want to work for you or not,
and how long they're going to want to stay frequently.
Highly qualified applicants are interviewing with several employers all at the
same time.
I'll give you an example.
We would get 20 or 30 CVS for a front desk
position, but of those,
there were only a couple of standout candidates.
And then when we interview them,
we'd often discover that we were in a bidding war with
other practices in variably.
Having a robust benefit package would help us win almost every
time. Even if our hourly rate was the same or lower.
Why in part,
because is benefits are perceived emotionally,
as opposed to the actual financial value of them.
Employees view benefits as an indication of how much you value
and care about them.
And if you have a robust package,
it makes their lives much easier.
On the other hand,
if you have a skimpy benefit package,
your employees are forced to bear.
Most of the monetary or administrative costs themselves.
So offering a slightly lower pay rate,
coupled with an excellent benefit package will often be viewed more
favorably than offering a higher rate and no benefits or a
skimpy package.
Now, I also understand that while offering a strong benefits package
can give your practice a competitive advantage.
It may seem extravagant to you,
especially if you're just starting out today.
I want to talk to you about how to figure out
what you want to include in your benefits package so that
you can recruit and retain quality staff while being financially responsible.
I want to stress to you that you need to avoid
the temptation of not offering or eliminating benefits.
Let's take a step back for a second.
If you're a medical business and you don't offer health insurance,
what does that say about you or what happens when your
employees get sick?
Sure. You may be able to save money by limiting your
benefits, but it's likely to have detrimental effects on workplace morale
and staff retention and it's to result in higher turnover as
an aside,
think about it every time you have an employee leave,
it costs you money.
You have to spend time,
effort, and money to place a new ad interview,
and then train that person.
Don't discount this.
When you're thinking about your employee compensation packages,
when you're considering which benefits to provide,
recognize that there are certain benefits that are actually required either
by state or,
or a lot.
Here's some examples,
social security free employer must contribute to social security.
On behalf of each employee,
this payroll tax is known as FICA and this currently 6.2%
based on employee compensation.
In addition,
every employer must contribute to Medicare.
On behalf of the employee,
this payroll tax is currently 1.4,
5% based on their employee compensation.
These are the two taxes that I'm sure that you are
well. However,
there are two other benefits that most employers don't think about.
The first is unemployment insurance.
As an employer,
finance unemployment,
both at the federal and state level,
by paying a percentage on employee compensation.
The amount that you pay is based on the employers industry
and your claims rating.
In case you don't know anything about this,
the more unemployment claims you have,
the higher your unemployment insurance.
The second is workman's compensation,
state laws mandate that employers provide certain benefits to people who
are injured on the job.
These benefits are provided through a separate policy or a state
funded program,
similar to unemployment.
At this point,
you may be thinking to yourself,
why don't I just hire these people as independent contractors.
First, go read my blog,
where I outline the differences between employees and independent contractors.
Most people working in a medical practice do not meet the
criteria for being an independent contractor.
Second, let's say the chair breaks and the person falls on
the floor in your office and hurts them.
Yeah. If they're an employee than the injury is covered under
workman's comp on the other hand,
and if they're an independent contractor,
you just opened yourself up to a general liability claim.
Next, if you're going to make your employees wear a uniforms,
then you're usually expected to cover the costs and maintenance of
uniforms. To be clear,
uniforms could be scrubs,
a polo top or whatever you dictate.
Now, if you dictate what they are,
we're going to wear,
then essentially you have to pay for it.
In our practice,
we provide a new employees with a uniform allowance so they
could go out and purchase grips.
I also want you to be aware that individual states may
have laws requiring employers to pay for other benefits.
For example,
California has an employment training tax.
There are other states,
states require compensating employees for time spent voting or serving on
jury duty.
You're going to want to be sure to check with your
state for any mandatory benefits beyond what I've already outlined.
It's easier to do this than have someone file a complaint
because you failed to provide something.
Now, one question that always comes up is do I need
to offer health insurance?
The long and short of it is that there's no federal
requirement for private sector employers to provide health insurance.
However, you do need to know that several states have their
own health insurance laws,
and that may affect you as an employer.
So the first thing you're gonna want to do is figure
out whether health insurance is mandated by your state law.
Most of the time though health insurance and other benefits are
offered on a voluntary basis and not generally mandated by law.
These may include dental insurance,
vision, insurance,
life insurance,
sick leave,
vacation, pay,
severance, pay retirement plans.
Just to name a few,
let's start with health insurance.
You could offer group health insurance to your full-time employees.
You aren't obligated to provide health insurance or actually any benefits
to part-time employees.
There's no obligation to offer a specific type of plan or
to cover the entire cost.
So if you offer group health insurance coverage,
you can consider putting a cap on how much your practice
is going to pay.
For example,
you may pay a percentage of the premium 50%,
75% of two at maximum dollar amount.
In my practice,
we contributed $250 per month towards the employees premium.
Any difference was paid by the employee,
including if they wanted to add any additional family members.
Alternatively, you can also just provide a monthly stipend in lieu
of coverage.
This amount can be used by the employee to obtain and
help pay for their own health insurance.
Frequently. The brokers who help you secure group health insurance quotes
can bundle it with dental and vision insurance.
Well, of course you can generously pay for it.
You don't have to.
Instead, you can simply offer it for employees to add onto
their health insurance and then have them pay the additional dental
and vision insurance premiums in my practice,
not everyone needed or wanted dental and vision coverage,
but those who did really appreciated the opportunity to get it
as part of their health insurance bundle.
And honestly,
it was no hassle for us to offer it because it
didn't cost us anything.
Next, let's talk about what holidays are you going to pay
for? Typically these include new year's day,
Memorial day,
July 4th,
labor day,
Thanksgiving day and Christmas day.
You can minimize your costs by paying only for the holiday
when it falls on a regularly scheduled Workday.
So if your practice is open Monday through Thursday and the
holiday falls on a Friday,
then you don't pay for the holiday.
I've known practices that do this.
And as you can imagine,
it isn't very popular people working in a medical practice work
really hard.
This is one of those things that don't cost you a
lot of money.
And if you don't pay them,
it's going to alienate your staff.
On the other hand,
I wholly advocate paying for the holiday only if the employee
works the last scheduled day before the holiday and the first
scheduled work day after the holiday,
unless you have already approved their PTO.
I did this in our practice to reduce the problem of
employees calling in sick before the holiday to get more consecutive
days off.
And it really works.
I tell you this because there always seems to be a
need to see more patients the day before and the day
after a holiday.
And the last thing you want is to have staff calling
in quote,
unquote, sick.
And finally,
to that end,
you need to think about how much sick leave and paid
vacation you're going to offer.
Personally. I like to think of these as paid time off.
I'm not a huge fan of sick leave and then having
a separate policy for paid vacation.
Invariably, you end up with employees who are never sick.
They either end up losing their sick leave or taking them
as vacation days.
Similarly, there are always people who want more vacation time,
so they use their sick leave and then they don't have
any sick days when they actually need them.
In my practice,
we had only PTO.
And in case you're wondering how much to offer one week
after one year,
two weeks after two years,
three weeks after five years,
and then four weeks after 10 years,
while I know that four weeks after 10 years may seem
like a lot of time to you.
Let me promise you that if you have an employee who
stayed for 10 years,
they are worth their weight in gold,
and this is a small price to keep them happy.
The other benefit that I haven't discussed with you here is
the need to have a retirement plan.
It should be obvious to you that you're going to need
to put in place a retirement plan for yourself.
When you develop that retirement plan,
it is going to be for your practice.
And you're going to want to have your employees have the
ability to participate in it as well.
So my final comments to you are that when you are
deciding on what benefits you're going to offer,
you need to understand their costs,
each benefit,
regardless of whether it's mandated by law or it's a voluntary
benefit can affect the profitability of your business.
You're going to want to assign a dollar value to each
benefit when you're doing your financial projections so that you understand
what that true employee compensation package looks like.
And in the end,
you're also going to want to be able to speak to
that when you are interviewing people or trying to retain your
staff, obviously understanding the true value of the overall compensation package
goes a long way to improving employees,
morale. Thanks for joining me.
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grow the practice,
and then ultimately be able to leverage your medical practice into
multiple other businesses.
I hope to see you soon.