1 00:00:00,300 --> 00:00:01,110 Hi, it's Dr. 2 00:00:01,110 --> 00:00:04,140 Weitz. Thank you so much for joining me for this episode 3 00:00:04,170 --> 00:00:06,330 of the private medical practice academy. 4 00:00:06,900 --> 00:00:10,380 Hiring good employees for your medical business can be quite challenging. 5 00:00:11,100 --> 00:00:15,000 And there are many factors that ultimately affect your ability to 6 00:00:15,120 --> 00:00:16,770 fill your open positions. 7 00:00:17,520 --> 00:00:20,340 Obviously how much you're going to pay is one of those 8 00:00:20,340 --> 00:00:23,100 issues. And in episode 34, 9 00:00:23,100 --> 00:00:25,740 I talked to you about how to determine what you should 10 00:00:25,740 --> 00:00:26,730 pay your employees. 11 00:00:27,240 --> 00:00:32,100 However, salary is only one part of the overall compensation package, 12 00:00:32,970 --> 00:00:34,050 potential hires, 13 00:00:34,110 --> 00:00:38,010 often rank benefits as one of the top factors impacting their 14 00:00:38,010 --> 00:00:39,630 decision to accept your offer. 15 00:00:40,620 --> 00:00:43,380 I can tell you firsthand that what benefits you offer will 16 00:00:43,380 --> 00:00:47,040 have an influence over a potential employees decision, 17 00:00:47,070 --> 00:00:49,020 whether they want to work for you or not, 18 00:00:49,110 --> 00:00:52,700 and how long they're going to want to stay frequently. 19 00:00:53,630 --> 00:00:58,160 Highly qualified applicants are interviewing with several employers all at the 20 00:00:58,160 --> 00:00:58,850 same time. 21 00:00:59,660 --> 00:01:00,710 I'll give you an example. 22 00:01:00,830 --> 00:01:04,370 We would get 20 or 30 CVS for a front desk 23 00:01:04,370 --> 00:01:06,860 position, but of those, 24 00:01:07,160 --> 00:01:09,680 there were only a couple of standout candidates. 25 00:01:09,950 --> 00:01:11,660 And then when we interview them, 26 00:01:11,810 --> 00:01:14,900 we'd often discover that we were in a bidding war with 27 00:01:14,930 --> 00:01:17,510 other practices in variably. 28 00:01:17,630 --> 00:01:21,770 Having a robust benefit package would help us win almost every 29 00:01:21,770 --> 00:01:25,760 time. Even if our hourly rate was the same or lower. 30 00:01:26,180 --> 00:01:27,710 Why in part, 31 00:01:27,800 --> 00:01:30,650 because is benefits are perceived emotionally, 32 00:01:31,010 --> 00:01:33,650 as opposed to the actual financial value of them. 33 00:01:34,220 --> 00:01:38,570 Employees view benefits as an indication of how much you value 34 00:01:38,570 --> 00:01:39,320 and care about them. 35 00:01:39,920 --> 00:01:42,620 And if you have a robust package, 36 00:01:42,920 --> 00:01:44,840 it makes their lives much easier. 37 00:01:45,890 --> 00:01:46,820 On the other hand, 38 00:01:47,120 --> 00:01:49,370 if you have a skimpy benefit package, 39 00:01:49,550 --> 00:01:51,890 your employees are forced to bear. 40 00:01:51,890 --> 00:01:54,920 Most of the monetary or administrative costs themselves. 41 00:01:55,760 --> 00:01:58,220 So offering a slightly lower pay rate, 42 00:01:58,430 --> 00:02:02,990 coupled with an excellent benefit package will often be viewed more 43 00:02:02,990 --> 00:02:07,370 favorably than offering a higher rate and no benefits or a 44 00:02:07,370 --> 00:02:08,390 skimpy package. 45 00:02:09,230 --> 00:02:13,760 Now, I also understand that while offering a strong benefits package 46 00:02:13,790 --> 00:02:16,460 can give your practice a competitive advantage. 47 00:02:16,970 --> 00:02:18,710 It may seem extravagant to you, 48 00:02:18,710 --> 00:02:21,260 especially if you're just starting out today. 49 00:02:21,260 --> 00:02:23,180 I want to talk to you about how to figure out 50 00:02:23,180 --> 00:02:26,000 what you want to include in your benefits package so that 51 00:02:26,000 --> 00:02:31,250 you can recruit and retain quality staff while being financially responsible. 52 00:02:31,850 --> 00:02:34,310 I want to stress to you that you need to avoid 53 00:02:34,310 --> 00:02:37,490 the temptation of not offering or eliminating benefits. 54 00:02:38,030 --> 00:02:39,770 Let's take a step back for a second. 55 00:02:40,460 --> 00:02:43,670 If you're a medical business and you don't offer health insurance, 56 00:02:43,790 --> 00:02:46,940 what does that say about you or what happens when your 57 00:02:46,940 --> 00:02:48,050 employees get sick? 58 00:02:48,410 --> 00:02:51,710 Sure. You may be able to save money by limiting your 59 00:02:51,710 --> 00:02:56,570 benefits, but it's likely to have detrimental effects on workplace morale 60 00:02:56,810 --> 00:03:02,080 and staff retention and it's to result in higher turnover as 61 00:03:02,080 --> 00:03:02,750 an aside, 62 00:03:03,010 --> 00:03:05,800 think about it every time you have an employee leave, 63 00:03:05,830 --> 00:03:06,820 it costs you money. 64 00:03:07,120 --> 00:03:08,830 You have to spend time, 65 00:03:08,860 --> 00:03:12,250 effort, and money to place a new ad interview, 66 00:03:12,730 --> 00:03:14,500 and then train that person. 67 00:03:15,280 --> 00:03:16,510 Don't discount this. 68 00:03:16,510 --> 00:03:19,540 When you're thinking about your employee compensation packages, 69 00:03:20,440 --> 00:03:22,810 when you're considering which benefits to provide, 70 00:03:23,080 --> 00:03:27,400 recognize that there are certain benefits that are actually required either 71 00:03:27,400 --> 00:03:28,210 by state or, 72 00:03:28,410 --> 00:03:29,070 or a lot. 73 00:03:29,430 --> 00:03:30,600 Here's some examples, 74 00:03:31,170 --> 00:03:35,490 social security free employer must contribute to social security. 75 00:03:35,490 --> 00:03:36,870 On behalf of each employee, 76 00:03:37,470 --> 00:03:43,020 this payroll tax is known as FICA and this currently 6.2% 77 00:03:43,140 --> 00:03:45,060 based on employee compensation. 78 00:03:46,890 --> 00:03:47,610 In addition, 79 00:03:47,700 --> 00:03:49,740 every employer must contribute to Medicare. 80 00:03:49,740 --> 00:03:51,030 On behalf of the employee, 81 00:03:52,050 --> 00:03:54,380 this payroll tax is currently 1.4, 82 00:03:54,390 --> 00:03:57,660 5% based on their employee compensation. 83 00:03:58,320 --> 00:04:00,890 These are the two taxes that I'm sure that you are 84 00:04:00,900 --> 00:04:02,790 well. However, 85 00:04:03,510 --> 00:04:08,040 there are two other benefits that most employers don't think about. 86 00:04:08,430 --> 00:04:10,110 The first is unemployment insurance. 87 00:04:10,470 --> 00:04:11,490 As an employer, 88 00:04:11,960 --> 00:04:13,560 finance unemployment, 89 00:04:13,590 --> 00:04:15,240 both at the federal and state level, 90 00:04:15,330 --> 00:04:18,060 by paying a percentage on employee compensation. 91 00:04:18,570 --> 00:04:21,630 The amount that you pay is based on the employers industry 92 00:04:21,960 --> 00:04:23,490 and your claims rating. 93 00:04:24,360 --> 00:04:26,220 In case you don't know anything about this, 94 00:04:26,610 --> 00:04:28,950 the more unemployment claims you have, 95 00:04:29,340 --> 00:04:31,500 the higher your unemployment insurance. 96 00:04:32,310 --> 00:04:34,380 The second is workman's compensation, 97 00:04:34,740 --> 00:04:38,820 state laws mandate that employers provide certain benefits to people who 98 00:04:38,820 --> 00:04:39,960 are injured on the job. 99 00:04:40,350 --> 00:04:44,040 These benefits are provided through a separate policy or a state 100 00:04:44,040 --> 00:04:44,940 funded program, 101 00:04:45,420 --> 00:04:47,220 similar to unemployment. 102 00:04:48,300 --> 00:04:48,990 At this point, 103 00:04:48,990 --> 00:04:50,370 you may be thinking to yourself, 104 00:04:50,490 --> 00:04:53,430 why don't I just hire these people as independent contractors. 105 00:04:54,090 --> 00:04:56,040 First, go read my blog, 106 00:04:56,070 --> 00:05:00,030 where I outline the differences between employees and independent contractors. 107 00:05:00,510 --> 00:05:03,390 Most people working in a medical practice do not meet the 108 00:05:03,390 --> 00:05:05,880 criteria for being an independent contractor. 109 00:05:06,750 --> 00:05:11,070 Second, let's say the chair breaks and the person falls on 110 00:05:11,070 --> 00:05:12,540 the floor in your office and hurts them. 111 00:05:12,630 --> 00:05:16,650 Yeah. If they're an employee than the injury is covered under 112 00:05:16,650 --> 00:05:18,630 workman's comp on the other hand, 113 00:05:18,660 --> 00:05:20,940 and if they're an independent contractor, 114 00:05:21,150 --> 00:05:24,180 you just opened yourself up to a general liability claim. 115 00:05:24,960 --> 00:05:28,860 Next, if you're going to make your employees wear a uniforms, 116 00:05:29,040 --> 00:05:32,280 then you're usually expected to cover the costs and maintenance of 117 00:05:32,280 --> 00:05:34,050 uniforms. To be clear, 118 00:05:34,230 --> 00:05:35,640 uniforms could be scrubs, 119 00:05:35,640 --> 00:05:37,370 a polo top or whatever you dictate. 120 00:05:38,190 --> 00:05:40,380 Now, if you dictate what they are, 121 00:05:40,380 --> 00:05:41,130 we're going to wear, 122 00:05:41,310 --> 00:05:43,080 then essentially you have to pay for it. 123 00:05:43,410 --> 00:05:44,340 In our practice, 124 00:05:44,520 --> 00:05:47,580 we provide a new employees with a uniform allowance so they 125 00:05:47,580 --> 00:05:49,110 could go out and purchase grips. 126 00:05:49,590 --> 00:05:52,620 I also want you to be aware that individual states may 127 00:05:52,620 --> 00:05:55,710 have laws requiring employers to pay for other benefits. 128 00:05:56,340 --> 00:05:57,240 For example, 129 00:05:57,500 --> 00:06:00,290 California has an employment training tax. 130 00:06:00,920 --> 00:06:01,610 There are other states, 131 00:06:01,630 --> 00:06:06,310 states require compensating employees for time spent voting or serving on 132 00:06:06,310 --> 00:06:07,000 jury duty. 133 00:06:07,540 --> 00:06:09,340 You're going to want to be sure to check with your 134 00:06:09,340 --> 00:06:13,600 state for any mandatory benefits beyond what I've already outlined. 135 00:06:13,960 --> 00:06:17,170 It's easier to do this than have someone file a complaint 136 00:06:17,200 --> 00:06:19,060 because you failed to provide something. 137 00:06:19,480 --> 00:06:22,660 Now, one question that always comes up is do I need 138 00:06:22,660 --> 00:06:23,860 to offer health insurance? 139 00:06:24,280 --> 00:06:26,920 The long and short of it is that there's no federal 140 00:06:26,920 --> 00:06:30,550 requirement for private sector employers to provide health insurance. 141 00:06:31,090 --> 00:06:34,270 However, you do need to know that several states have their 142 00:06:34,270 --> 00:06:35,800 own health insurance laws, 143 00:06:36,130 --> 00:06:38,050 and that may affect you as an employer. 144 00:06:38,350 --> 00:06:40,540 So the first thing you're gonna want to do is figure 145 00:06:40,540 --> 00:06:45,160 out whether health insurance is mandated by your state law. 146 00:06:45,610 --> 00:06:49,300 Most of the time though health insurance and other benefits are 147 00:06:49,300 --> 00:06:53,650 offered on a voluntary basis and not generally mandated by law. 148 00:06:54,280 --> 00:06:56,410 These may include dental insurance, 149 00:06:56,470 --> 00:06:57,520 vision, insurance, 150 00:06:57,550 --> 00:06:58,630 life insurance, 151 00:06:58,720 --> 00:06:59,590 sick leave, 152 00:06:59,740 --> 00:07:00,880 vacation, pay, 153 00:07:01,150 --> 00:07:03,490 severance, pay retirement plans. 154 00:07:04,210 --> 00:07:05,380 Just to name a few, 155 00:07:06,130 --> 00:07:07,840 let's start with health insurance. 156 00:07:08,380 --> 00:07:11,560 You could offer group health insurance to your full-time employees. 157 00:07:12,160 --> 00:07:16,570 You aren't obligated to provide health insurance or actually any benefits 158 00:07:16,660 --> 00:07:18,040 to part-time employees. 159 00:07:18,610 --> 00:07:22,210 There's no obligation to offer a specific type of plan or 160 00:07:22,210 --> 00:07:24,100 to cover the entire cost. 161 00:07:24,700 --> 00:07:28,180 So if you offer group health insurance coverage, 162 00:07:28,360 --> 00:07:31,120 you can consider putting a cap on how much your practice 163 00:07:31,120 --> 00:07:31,870 is going to pay. 164 00:07:32,440 --> 00:07:33,310 For example, 165 00:07:33,460 --> 00:07:36,760 you may pay a percentage of the premium 50%, 166 00:07:36,760 --> 00:07:40,300 75% of two at maximum dollar amount. 167 00:07:40,900 --> 00:07:41,740 In my practice, 168 00:07:41,740 --> 00:07:46,540 we contributed $250 per month towards the employees premium. 169 00:07:46,960 --> 00:07:49,360 Any difference was paid by the employee, 170 00:07:49,750 --> 00:07:53,380 including if they wanted to add any additional family members. 171 00:07:54,220 --> 00:07:58,660 Alternatively, you can also just provide a monthly stipend in lieu 172 00:07:58,660 --> 00:07:59,350 of coverage. 173 00:07:59,770 --> 00:08:02,740 This amount can be used by the employee to obtain and 174 00:08:02,740 --> 00:08:05,800 help pay for their own health insurance. 175 00:08:06,250 --> 00:08:10,840 Frequently. The brokers who help you secure group health insurance quotes 176 00:08:10,870 --> 00:08:13,990 can bundle it with dental and vision insurance. 177 00:08:14,530 --> 00:08:17,110 Well, of course you can generously pay for it. 178 00:08:17,140 --> 00:08:17,950 You don't have to. 179 00:08:18,310 --> 00:08:22,150 Instead, you can simply offer it for employees to add onto 180 00:08:22,150 --> 00:08:26,200 their health insurance and then have them pay the additional dental 181 00:08:26,200 --> 00:08:29,230 and vision insurance premiums in my practice, 182 00:08:29,350 --> 00:08:32,440 not everyone needed or wanted dental and vision coverage, 183 00:08:32,710 --> 00:08:35,860 but those who did really appreciated the opportunity to get it 184 00:08:35,860 --> 00:08:37,600 as part of their health insurance bundle. 185 00:08:38,170 --> 00:08:38,920 And honestly, 186 00:08:38,920 --> 00:08:41,470 it was no hassle for us to offer it because it 187 00:08:41,470 --> 00:08:42,580 didn't cost us anything. 188 00:08:43,180 --> 00:08:46,150 Next, let's talk about what holidays are you going to pay 189 00:08:46,150 --> 00:08:49,300 for? Typically these include new year's day, 190 00:08:49,330 --> 00:08:50,230 Memorial day, 191 00:08:50,230 --> 00:08:51,790 July 4th, 192 00:08:51,790 --> 00:08:52,930 labor day, 193 00:08:52,930 --> 00:08:55,530 Thanksgiving day and Christmas day. 194 00:08:55,530 --> 00:08:59,130 You can minimize your costs by paying only for the holiday 195 00:08:59,130 --> 00:09:02,340 when it falls on a regularly scheduled Workday. 196 00:09:02,370 --> 00:09:05,220 So if your practice is open Monday through Thursday and the 197 00:09:05,220 --> 00:09:06,360 holiday falls on a Friday, 198 00:09:06,720 --> 00:09:08,340 then you don't pay for the holiday. 199 00:09:08,880 --> 00:09:10,740 I've known practices that do this. 200 00:09:11,040 --> 00:09:12,420 And as you can imagine, 201 00:09:12,510 --> 00:09:16,200 it isn't very popular people working in a medical practice work 202 00:09:16,260 --> 00:09:17,130 really hard. 203 00:09:17,820 --> 00:09:20,040 This is one of those things that don't cost you a 204 00:09:20,040 --> 00:09:20,760 lot of money. 205 00:09:21,030 --> 00:09:22,680 And if you don't pay them, 206 00:09:22,740 --> 00:09:24,390 it's going to alienate your staff. 207 00:09:25,020 --> 00:09:25,830 On the other hand, 208 00:09:26,340 --> 00:09:30,270 I wholly advocate paying for the holiday only if the employee 209 00:09:30,270 --> 00:09:34,680 works the last scheduled day before the holiday and the first 210 00:09:34,680 --> 00:09:36,810 scheduled work day after the holiday, 211 00:09:37,140 --> 00:09:39,780 unless you have already approved their PTO. 212 00:09:40,560 --> 00:09:43,140 I did this in our practice to reduce the problem of 213 00:09:43,140 --> 00:09:46,620 employees calling in sick before the holiday to get more consecutive 214 00:09:46,620 --> 00:09:47,370 days off. 215 00:09:47,940 --> 00:09:49,080 And it really works. 216 00:09:49,650 --> 00:09:54,000 I tell you this because there always seems to be a 217 00:09:54,000 --> 00:09:57,450 need to see more patients the day before and the day 218 00:09:57,480 --> 00:09:58,410 after a holiday. 219 00:09:58,440 --> 00:10:01,680 And the last thing you want is to have staff calling 220 00:10:01,680 --> 00:10:02,460 in quote, 221 00:10:02,460 --> 00:10:03,630 unquote, sick. 222 00:10:04,950 --> 00:10:05,730 And finally, 223 00:10:06,180 --> 00:10:06,840 to that end, 224 00:10:06,840 --> 00:10:09,960 you need to think about how much sick leave and paid 225 00:10:10,020 --> 00:10:11,250 vacation you're going to offer. 226 00:10:12,030 --> 00:10:15,630 Personally. I like to think of these as paid time off. 227 00:10:16,110 --> 00:10:18,900 I'm not a huge fan of sick leave and then having 228 00:10:18,900 --> 00:10:21,150 a separate policy for paid vacation. 229 00:10:21,600 --> 00:10:24,960 Invariably, you end up with employees who are never sick. 230 00:10:25,320 --> 00:10:28,410 They either end up losing their sick leave or taking them 231 00:10:28,410 --> 00:10:29,370 as vacation days. 232 00:10:29,850 --> 00:10:33,450 Similarly, there are always people who want more vacation time, 233 00:10:33,480 --> 00:10:36,420 so they use their sick leave and then they don't have 234 00:10:36,420 --> 00:10:38,490 any sick days when they actually need them. 235 00:10:39,180 --> 00:10:40,020 In my practice, 236 00:10:40,020 --> 00:10:41,310 we had only PTO. 237 00:10:42,240 --> 00:10:46,110 And in case you're wondering how much to offer one week 238 00:10:46,350 --> 00:10:47,280 after one year, 239 00:10:47,670 --> 00:10:49,320 two weeks after two years, 240 00:10:49,710 --> 00:10:51,450 three weeks after five years, 241 00:10:51,660 --> 00:10:53,730 and then four weeks after 10 years, 242 00:10:54,990 --> 00:10:58,260 while I know that four weeks after 10 years may seem 243 00:10:58,290 --> 00:11:00,210 like a lot of time to you. 244 00:11:00,960 --> 00:11:02,790 Let me promise you that if you have an employee who 245 00:11:02,800 --> 00:11:03,870 stayed for 10 years, 246 00:11:03,930 --> 00:11:05,910 they are worth their weight in gold, 247 00:11:06,420 --> 00:11:08,910 and this is a small price to keep them happy. 248 00:11:09,480 --> 00:11:12,330 The other benefit that I haven't discussed with you here is 249 00:11:12,330 --> 00:11:14,040 the need to have a retirement plan. 250 00:11:14,550 --> 00:11:16,830 It should be obvious to you that you're going to need 251 00:11:16,830 --> 00:11:19,140 to put in place a retirement plan for yourself. 252 00:11:19,560 --> 00:11:21,810 When you develop that retirement plan, 253 00:11:21,960 --> 00:11:23,640 it is going to be for your practice. 254 00:11:23,700 --> 00:11:25,950 And you're going to want to have your employees have the 255 00:11:25,950 --> 00:11:28,110 ability to participate in it as well. 256 00:11:28,710 --> 00:11:31,260 So my final comments to you are that when you are 257 00:11:31,260 --> 00:11:33,720 deciding on what benefits you're going to offer, 258 00:11:33,990 --> 00:11:35,820 you need to understand their costs, 259 00:11:36,360 --> 00:11:37,260 each benefit, 260 00:11:37,320 --> 00:11:41,220 regardless of whether it's mandated by law or it's a voluntary 261 00:11:41,220 --> 00:11:44,460 benefit can affect the profitability of your business. 262 00:11:44,850 --> 00:11:47,790 You're going to want to assign a dollar value to each 263 00:11:47,790 --> 00:11:52,530 benefit when you're doing your financial projections so that you understand 264 00:11:52,590 --> 00:11:56,530 what that true employee compensation package looks like. 265 00:11:57,010 --> 00:11:58,300 And in the end, 266 00:11:58,330 --> 00:12:00,520 you're also going to want to be able to speak to 267 00:12:00,520 --> 00:12:04,900 that when you are interviewing people or trying to retain your 268 00:12:04,900 --> 00:12:10,770 staff, obviously understanding the true value of the overall compensation package 269 00:12:10,820 --> 00:12:13,360 goes a long way to improving employees, 270 00:12:13,650 --> 00:12:16,080 morale. Thanks for joining me. 271 00:12:16,380 --> 00:12:18,630 Be sure to sign up for my newsletter below, 272 00:12:19,230 --> 00:12:22,080 and I'll be sending you tips on how to start your 273 00:12:22,080 --> 00:12:24,960 practice best run your practice, 274 00:12:25,410 --> 00:12:26,310 grow the practice, 275 00:12:26,340 --> 00:12:29,970 and then ultimately be able to leverage your medical practice into 276 00:12:29,970 --> 00:12:31,800 multiple other businesses. 277 00:12:32,400 --> 00:12:33,450 I hope to see you soon.