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May 2024
Vet Med, We Have a Problem
According to AAHA’s research, one factor consistently comes up again and again in the conversation about staff turnover: fair compensation. It’s the top driver of attrition, and it’s also a key retention factor. This article offers expert tips for addressing the number one driver of turnover among veterinary professionals.
How to Find the Money to Pay Your People More
Is your practice struggling to keep good people? You’re not alone. A recent AAHA study found that around 30% of veterinary professionals working in clinical practice planned to leave their jobs; half planned to leave clinical practice altogether, and of that half, 9 out of 10 said that nothing could convince them to come back.
The thing is, the problem has long been framed as a staffing challenge, or a workforce crisis. But if you think about it, the fact that we can’t keep passionate, dedicated professionals in clinical practice isn’t really a numbers problem. The real problem is that we’re putting people who’ve often dreamed of doing this work since childhood into an ecosystem that’s driving them away in record numbers.
So, the solution isn’t about adding more people to the mix (although, of course we do want to continue bringing amazing people into the profession). The solution is to understand why so many of these veterinary professionals don’t see clinical practice as a place they can remain—and make the necessary adjustments to our practices (and our veterinary ecosystem at large) to change that.
Fair compensation. It’s the top driver of attrition, and it’s also a key retention factor.
The study mentioned above, Stay, Please (available to view at aaha.org/retention-study), identified the retention factors that inspire veterinary professionals to stay where they are, as well as the attrition drivers that, when lacking in a practice, push people away.
Practices experiencing high or unsustainable turnover should begin by addressing the strongest drivers of attrition. Whether they’re seeing that turnover practice-wide or in a single role, the same top factor rises to the surface again and again: Fair compensation. It’s the top driver of attrition, and it’s also a key retention factor, coming in at number four among those who are happy and plan to stay where they are.
Although it’s important to all roles, it’s worth noting that the study found fair compensation was nearly twice as important to nonveterinarians planning to leave than it was to the DVMs surveyed. So, while it matters to everyone, it matters to some roles more than others.
Of course, understanding how important fair compensation is to people in a practice is one thing; figuring out exactly what that means—and finding the money in the budget to pay them more—is another.
But it’s necessary. Employee wages are a cost of doing business. But also, it’s nearly always more affordable (not to mention kinder) to give well-trained, hardworking team members a raise than it is to keep losing and replacing them. From a business perspective, as well as a human perspective, figuring out how to run your practice in a way that allows you to pay people fairly is a smart move.
Fortunately, Karen Felsted, CPA, MS, DVM, CVPM, CVA, of PantheraT Veterinary Management Consulting, knows a thing or two about how to make those smart moves, and she shared a few of her top tips for figuring out what fair compensation really means—and finding ways to provide it to your team.
Start with the Market
“Bottom line, [employee compensation] has to be a market wage,” Felsted said. “You can have the most perfect set of criteria for hiring and paying for a veterinary technician, but if you’re not paying what the community is paying, it doesn’t matter how theoretically perfect they are.”
An annual wage audit or parity calculation that compares what people in your practice are earning compared to people in the community is a wise place to start. Keep in mind that, for some roles (like assistants or CSRs), other industries (like human health care) could also draw talented employees away, so you may want to broaden the scope of your research beyond local veterinary practices. This is especially true if the market wage for a role doesn’t meet living wage standards in your area (which you can determine using the MIT Living Wage Calculator). If people cannot afford to pay their bills as a working professional, they may not be able to afford to work for you, no matter how much they love what they do.
If, in doing this research, you discover that the market wage (or living wage) is not an amount you can afford to pay, there’s a good chance your practice could benefit from some changes in the way it’s being run.
“That leads us to profitability,” Felsted said. “One way to do this is to bring in more clients, but if you bring in more clients and don’t change how you operate, that’s just going to put a greater workload on the people you already have.” And, it probably goes without saying, but overloading your existing team is not the way to convince them to stick around.
“I think more practices could operate more efficiently and be more productive if they just made changes in workflow and technology,” she said, “as well as training of their team members.”
This is where, for example, technician utilization becomes important; by utilizing team members to the full extent of their license and abilities, it’s possible to improve efficiency, profitability, and employee satisfaction. (Learn more about this in the 2023 AAHA Technician Utilization Guidelines at aaha.org/guidelines.)
You can have the most perfect set of criteria for hiring and paying for a veterinary technician, but if you’re not paying what the community is paying, it doesn’t matter how theoretically perfect they are.Karen Felsted, CPA, MS, DVM, CVPM, CVA
PantheraT Veterinary Management Consulting
Tie It to Performance
“Seniority, by itself, doesn’t necessarily matter,” Felsted said, “but hopefully, seniority is leading to better skillsets, understanding the practice better, and contributing more to the practice.”
That’s why she thinks that tiered pay makes a lot of sense for many practices. They may be challenging to set up, but she believes that setting clear skill expectations and pay for each tier within a role is well worth the effort.
For example, there needs to be a clear-cut understanding of what skills are required for, say, a Tech Level 1 (which would be the lowest level for a technician) compared to a Tech Level 2 or a Tech Level 3, she said. And, of course, those skills would also differ from what’s required for different levels of CSR or veterinary assistant.
“I think it’s important that those not just be technical skills, but that they also be nontechnical skills. Things like, do they communicate well with clients? Do they work well with teammates? Do they contribute to training?” Felsted said.
Once those skill sets are clearly defined and communicated to all team members, you must provide a way for people to gain those skills so they can move up the ladder—and therefore earn the compensation that comes along with that tier. Because these increases in pay are tied to performance that benefits your practice, you should see improved efficiency (and therefore profitability) as people move up that ladder, making it easier for you to budget for the accompanying raises.
The wage audit mentioned above, regarding the market wage, is also a useful tool within your practice. Felsted notes that this can be particularly important among nondoctor staff.
“Over time, it’s very easy for the salaries or hourly wage paid to all technicians, assistants, or receptionists to get out of whack because the salaries paid to the newer people might be higher than what’s paid to the more experienced people,” she said. “And nothing ticks off those who have been in practice longer than knowing they’ve been there longer, they do more, they do a better job, and they’re getting paid less.”
Conducting a wage audit to look for that parity in your practice, correlating what people are paid with how good a job they’re doing, is a great way to ensure everyone is being paid appropriately based on their role, duties, and skills.
Avoid Common, Costly Mistakes
Reducing unnecessary costs is another way practices can find the money to increase wages, and unless a practice is diligent about going back through their financial statement and performance metrics and calculating true profitability, it’s likely that there are a few somewhat invisible expenses they could reduce or cut entirely.
Controlling inventory costs, for example, isn’t only about negotiating the best prices (which small, independent practices may be able to do more effectively by joining a buying group, said Felsted), but also about controlling how much you have on your shelves. “Do you really need to have three months’ worth of that product?” she asked, “or could you have one month?”
Understanding and tracking anything related to variable cost, like lab costs, drugs and medical supplies, pet food, etc., is important. “Understanding your inventory costs are some of the easiest things to correct and control,” Felsted said. “You have to have the right systems and internal controls in place, but that’s pretty straightforward—and it can be very satisfying to get inventory under control.”
Missed charges, whether accidental or purposeful, happen too. And, Felsted added, “You cannot get around the fact that embezzlement and theft happens in every single practice out there—and most of that is not client theft.”
She also suggests taking a close look at who’s working when, and what’s getting done during that time. “We often see too many people in place, and they’re working too much overtime, and they’re just not doing their jobs efficiently,” she said. “That’s not necessarily their fault—the practice isn’t giving them the tools and resources to work efficiently.” It’s important to communicate with your team about your observations, though—not only is it an opportunity to learn what processes and tools these team members need, but it’s always possible that something is occurring during those hours that’s not visible in the day’s records.
If you want to hire—and keep—quality employees, you simply cannot afford to ignore the importance of fair compensation. If you don’t address this key driver of attrition and retention, people will leave, and the cost of losing and replacing team members is likely to make a well-earned raise look like a more budget-friendly alternative.
And when you reduce unnecessary practice cost, tie wage increases to proven skills, improve practice efficiency, and provide your team ways to achieve additional competencies—profitability will increase organically, making salary adjustments more achievable in a thriving market.
Note: This article is part of our Stay, Please series, which focuses on providing resources (as identified in our Stay, Please retention study) to retain the 30% of all veterinary professionals considering leaving their clinical practice. Here at AAHA, we believe you were made for this work, and we’re committed to making clinical practice a sustainable career choice for every member of the team.
To learn more about the American Animal Hospital Association’s (AAHA) Stay, Please retention study, head over to aaha.com/retention-study.
Illustrations by: ©AAHA/Robin Taylor