How Much Should You Pay Staff?

Deciding how much to pay support staff can be tricky. If you overpay them, you let money walk out the door. Underpay and you risk high turnover, which could end up costing you even more.

The sad state of the economy complicates things further. If your practice is seeing some softening as patients lose jobs and health insurance, you may be looking for ways to belt-tighten. And now would seem to be the time to save on staff costs: With jobs scarce, workers are less likely to bolt. But the economy won’t be in recession forever, and when it returns to normalcy you don’t want to be seen as the employer who took advantage of people when they were down.

So, with all of that said: How do you decide what the right number is?

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For more granularity, review our data broken down by region (

Mid-Atlantic

,

Northeast

,

North-Central

,

Southeast

,

South-Central

,

Southwest

,

Rockies

, and

West

), and summarized into one

comprehensive spreadsheet

.

Bucks, clams, and greenbacks

We found wide disparities in pay based on region, and on whether the practice is in an urban, suburban, or rural setting. In the South Central states, for example, private-office nurses make $58,941.52 annually while in the Southwest they can expect to make only $47,736.

Urban areas tend to pay higher than suburbs and rural locations, reflecting cost-of-living differences. But rural practices generally have a thinner pool of qualified applicants from which to choose, and that can force them to keep salaries higher than they might like. Doug Bishoff, president of Memorial Clinic in Moorefield, W.V., says that even though the clinic is in a mainly rural area, larger markets are close enough that he has to keep his salaries competitive.

“I look at two or three different areas to determine wages - I can’t just look at rural numbers, urban areas, or even suburban areas. We’re all those and it’s a real mix here,” says Bishoff. “We’re fairly close to [Washington] D.C., and it’s hard to determine wages sometimes. People can say, ‘Well I can drive 50 or 60 miles and make more money.’ But do they really want to do that?”

Sometimes the best way to get a handle on what to pay for a given position is to simply ask job candidates about their salary expectations. “I always ask in reviews or interviews what a [candidate] is worth and they say, ‘What?’” says Jeff Carroll, administrator of Kalamazoo Gastroenterology & Hepatology, in Michigan. “It usually catches them by surprise.”

But Anna McCoy, practice manager of Vascular & General Surgery Associates in New Braunfels, Texas, is less interested in what job prospects think they should make than in what they have been making. “I expect any employee who comes to me is expecting to do as well or a little more” as they had been, says McCoy. So she asks. Questions about salary history and expectations, though, are commonplace and shouldn’t surprise most job candidates.

One of the most important salary determinants is experience. The more a person has, the more he tends to make, naturally. But in medical practices, there are many positions for which the benefits of experience are limited. “Experience will always matter, but every job has a value. You look at a front-desk employee averaging $13 an hour. If they’ve been there for 20 years, they can’t expect to make $20 an hour,” says practice consultant Owen Dahl. “They’ll either freeze at a level or be gone.”

But many practices prefer all employees to have at least some know-how right off the bat. McCoy says experience is important, even for lower-rung jobs, at her two-physician practice, due to the nature of its specialty.

“It’s a general surgery and vascular surgery practice, and anyone who steps in our door needs to at least have some terminology and needs to know how things run in our area,” she says.

But, she admits her rural Texas location isn’t always bursting with well-seasoned candidates, so sometimes they have to look more for potential. And that’s worked out, too, she says. “I hired a 23-year-old who worked at the hospital and we’ve been really happy with her,” says McCoy. “The doctor she works with is so easygoing and doesn’t mind teaching. We’ve been lucky.”

But be careful about focusing on experience to the exclusion of other qualities. A person’s temperament and attitude, for example, may be even more important, since those qualities are hard to teach.

“I’m seeing more and more practices placing more weight on the fit - the qualitative aspects of the employee,” says practice consultant Elizabeth Woodcock. “Let’s take the receptionist: We ask her to schedule appointments, answer phones, greet patients, tell the clinic [that] patients are here, smile the whole time, and by the way, if you miss one keystroke [when entering patient information], the claim isn’t going out the door and now the billing people will be mad at you. In that scenario you have to have someone who can think on their feet and experience doesn’t always dictate if they can really do the job.”

And there’s a benefit to training from the bottom up. If you hire someone who stays with you while she works her way up the ladder, you wind up with an extremely valuable employee who knows how to do multiple jobs (because she’s worked them) and can help train any new employees.

Again, however, this year the economy has put its own special spin on things. With unemployment high, you’ll likely see more-experienced candidates applying for lower-rung jobs. People just need to work. Regardless, salary offers should be based primarily on the value of the position you’re filling. Practice consultant Owen Dahl suggests developing a range for the position. Use the data reported here, as well as the complete survey results summarized and broken down by region (Mid-Atlantic, Northeast, North-Central, Southeast, South-Central, Southwest, Rockies, and West) as the starting point for determining a pay range.

Then offer your favorite candidate a salary within the range based on the candidate’s individual value. “Find a number and extrapolate it to be the midpoint in a range,” says Dahl. “If the practice does that, it knows where it needs to start an [entry-level] employee, but not limit longer tenured employees to this number either.”

Loyalty vs. mobility

While experience is all well and good, it comes in a lot of different flavors. One candidate’s 12 years of experience may have all been at one practice while another’s six years were gathered in multiple practices. Is one worth more?

“Experience is fairly generic. I’d rather look for the loyalty piece,” says practice consultant Lucien Roberts. “I look more at the quality of the experience and the tenure rather than the number of years in the business. If a tenured person has good references, that’s the person I want.”

Woodcock agrees that a candidate with a record of short employment terms may not be the best prospective employee when compared with someone who has demonstrated a steadier track record.

“I think it demonstrates that someone either can’t handle the pace or can’t fit in as a team member, and I would be concerned about high turnover. I think in the medical practice environment, it’s chaotic. Not all staff members have the amount of qualitative personality traits to do that. It’s not always that they’re a bad person, but they just can’t handle it,” says Woodcock.

But before you pass a blanket judgment, look more closely. Having stayed in one place forever isn’t always a good thing. Some people get a job, learn that job and do it well, then stay happily in that role for long periods. Someone else may have been moving around as opportunities presented to learn and grow.

“I’m actually an advocate of someone who has only spent a few years in a job - maybe a year or two as a front-desk person, another few years as a biller - provided you see them doing different things and having upward mobility,” says Susanne Madden, president of The Verden Group, a consulting firm in Nyack, N.Y. “Those are the people you want - even if they don’t stay with you for years and years, they will contribute a lot and be go-getters and bring a lot of creativity to the job.”

Well-crafted interview questions can offer some insight. Ask Candidates A and B what they learned during their time at Practices X and Y, why they left when they did or stayed as long as they did, and what new responsibilities they sought. Try to discern if they’re flexible about learning new ways to accomplish tasks they may have been performing elsewhere for years.

“It comes down to personality and you can spot them in the interview when they say ‘this is the way I do things.’ That’s not what you want,” says Madden. You’d rather they say, “this is how I’ve done things,” while demonstrating an open mind.

Putting it all together

Beyond using our data to set salary ranges for positions you’re hiring for, you can also employ them to benchmark you current staff salaries and see where you need to make adjustments.

Don’t panic, though, just because you see disparities between what you’re paying and the averages in your region. Even assuming the difference is large enough to worry about and not easily explained by individual circumstances, your next step is to begin a gradual adjustment process. Don’t just slash everyone’s pay 10 percent because your staff is “overpaid.”

“That would be horribly demoralizing and about the worst thing you could do,” says Madden. Consider, instead, smaller annual pay bumps, or making increases based on performance, rather than automatic cost-of-living raises. Also look at your new hires going forward; don’t just assume your new RN should make close to what your previous RN did, for example, or even what another RN still working there makes. Employees shouldn’t be comparing notes on pay, but even if they do, there’s no rule that requires you to pay everyone the same amount just because they do the same job, provided you aren’t running afoul of discrimination laws.

Consider the individual in front of you - his experience, attitude, work quality - and combine that with data from our salary survey. That’s how you determine a fair wage. And fair is what you’re trying to be, first and foremost.

“What [suggests] a fair salary is if you don’t have turnover and then people keep making money. You’re not losing money either because everyone is doing a better job as they go along. Keep those employees happy and keep them learning more and that’s going to keep your practice going,” says McCoy.

* Editor’s Note: Read the complete summary to find more detailed numbers, including insight on how different levels of experience affect salary for each position in each region: Mid-Atlantic, Northeast, North-Central, Southeast, South-Central, Southwest, Rockies, and West.

Kellie Rowden-Racette is a former associate editor for Physicians Practice. She can be reached via physicianspractice@cmpmedica.com.

This article originally appeared in the July/August 2009 issue of Physicians Practice.