STAFF SALARIES - What Should We Base Salaries On?

Many years ago, two chairside assistants, Linda and Melody, were both hired at the same time and at the same hourly rate. 

Five years later, though, Linda was being paid 50% more than Melody.  Same position, same seniority, same number of hours, but vastly different compensation.  How did it happen?

From Melody’s perspective, I’m sure this didn’t seem fair.   Like most staff, she suffered from a common misconception.  She thought that she was getting paid for her “time” – hours spent in the office plus raises for her years of service. “If I’ve been here as long as Linda”, she reasoned, “we should both get paid about the same.”

But what she didn’t understand is that we should pay employees for their Value to the practice, not just their Time.  Increase your value, increase your pay.  If you do your job and nothing more, then don’t expect much in the way of pay raises.

So how DID Linda increase her value? 

Linda accepted every opportunity to take on more responsibilities, develop new skills, and eventually become a leader among the assistants.  Melody did quite the opposite.  She learned how to assist at the chair, but didn’t seem particularly interested in contributing in any other way.  Linda had five years of experience and growing every year; Melody had one year of “experience” repeated five times.

      But how can you make everyone understand that compensation is based on the value of their contribution not the longevity of their service?

Paying for “Value” rather than “Time”

1. At the initial interview

        Introduce this concept to every applicant. For many, it’s a new idea.  Say something like:

      “Our compensation is based on the value you bring to the practice, not how long you’ve been here.  We will provide opportunities for you to improve your skills, take on additional responsibilities and become a more valuable member of our team.  The highest paid employees here are not necessarily the ones that have been here the longest.  They are the ones who contribute the most to the success of our practice.”

      And then tell them about Linda and Melody.  

2. During their employment

        Conduct performance reviews every four months. At those reviews, the team member and doctor agree on three tangible self-development goals that can be achieved by the next review - anything from learning the basics of their new job, to increasing their delegated duties or assuming a leadership role.

        When it comes time for salary review, review how many of these 12 tangible goals they have achieved and how much additional responsibility have they accepted.  This is what should determine their salary increase so they stay motivated all year long! 

       (Download the review process here Performance Review Process)

3. Finally, several warnings for those just starting out in practice!

       Make sure to keep your total staff overhead costs within the ideal percentage range (low 20s of collections). You might exceed it slightly if your practice is growing fast to be prepared for that future growth but stay close to that percentage. If you find that you can’t maintain smooth practice operations with staying within the ideal percentage range, then you don’t need to add more people, you need better systems or a more productive staff.

       In addition, all roles within the practice (clinical assistant, front desk, office manager, etc.) should have a salary range based on your particular area of the country. Of course, you want to pay your staff well. But if you’re not careful, being overly generous in the early stages of your practice may cause your staff costs to spiral out of control later on.  Remember the concept of compounding interest!  Giving only 5% raises each year (over the cost of living) will take you from 22% to 35% staff overhead costs in just 10 years.

       Finally, if someone takes on new managerial role like “clinical coordinator” for instance, clearly separate their hourly rate into two categories – the base pay as a clinical assistant (e.g. $23/hr.) and this additional amount ($3/hr.) for the added responsibilities of “coordinator.” Then if they decide that they would rather “just be an assistant,” there’s no confusion. Trust me on this one.  We were burned once when we failed to make it clear that their higher pay was based on their position not irrevocably attached to them as an employee.

       Whether you're just starting out or have been practicing for years, reward staff for value, not simply longevity.  It's the best way to boost productivity and be fair to everyone.