It’s no secret that veterinary practices are struggling to add veterinarians and replace those who leave. As more people welcome pets into their homes, the shortfall grows. A recent Mars Veterinary Health study predicted a U.S. shortage of 15,000 veterinarians by 2030, potentially leaving 75 million pets without care.
Largely due to the competition for veterinarians, a rising number of practices offer sign-on bonuses — and hefty ones at that. Although the strategy helps some clinics attract doctors, the tenured veterinarians at those practices might feel underappreciated and underpaid. How many of them will look to greener pastures and the accompanying recruitment bonuses? How can the Catch-22 be solved?
Sign-On Bonuses
When veterinarians receive multiple job offers and compare them, a bigger signing bonus goes into the plus column. That, of course, favors deep-pocketed larger practices and corporate networks.
No matter your hospital’s size, you must determine what you can afford in sign-on bonuses and weigh it against the ease of finding a quality candidate within the desired timeframe. Then, offer your candidate the most appealing bonus you can manage.
To help with the calculation, check job websites to see what practices like yours offer. When crafting a proposal to a veterinarian, don’t hesitate to mention the non-monetary advantages of choosing your practice. Maybe they include your wonderful community and flex-time scheduling.
Also, consider paying referral bonuses to people at your practice and in your professional network who recommend a qualified candidate. For example, you might pay half of the referral bonus when you hire the veterinarian and the balance in increments if the doctor remains at your practice.
Here’s a third type of incentive: a relocation bonus if someone moves a certain distance to work for you. Again, if the person doesn’t stay for an agreed-upon period, the contract might require reimbursement. Relocation bonuses can be flat rates, which are taxable as income, or you can cover specific moving expenses.
But What About Me?
Veterinary practices can’t solve a shortage if the enticements to potential hires cause staff doctors to become disgruntled. When a new hire gets a nice bonus, your loyal tenured employees might feel insulted, devalued and ignored.
Adding to their dissatisfaction is that new veterinarians sometimes receive higher salaries as an enticement to take a job. As a result, the pay can be close to or exceed what long-term employees earn after years of service. Experts call the phenomenon “salary compression,” which can cause staff veterinarians to feel frustrated and undervalued.
If a tenured veterinarian shares such frustration with you, it’s time for an open and honest conversation. Listen carefully to the concerns and, when it’s your time to speak, explain why your practice offers sign-on bonuses and how they can benefit current doctors. For example, employing more veterinarians might reduce the hours each one works or the days they need to be on call, improving everyone’s quality of life. Ask what you can do to alleviate the concerns, and express your appreciation in tangible ways. If what the veterinarian suggests is doable, consider adding the incentives to your practice’s compensation policies.
If parity exists except with a particular doctor or two, focus on a quality solution for those veterinarians. If the situation affects multiple members of the professional team, evaluate whether retention bonuses are appropriate.
Retention bonuses encourage veterinarians to stay for longer periods, which can ease the hiring crunch now and in future years. However, if a veterinarian quits within a specified period, a signed agreement can require reimbursement.
How to Negotiate a Retention Bonus
If you’re a tenured veterinarian at a practice offering sign-on bonuses but not retention bonuses, you might be tempted to ask for one. First, however, consider a different request. For example, if you desire a better work-life balance, could Saturdays off help you achieve that goal and be more satisfying than a bonus?
If you decide a bonus is the goal, research job ads and calculate a reasonable amount. Prepare to negotiate like you would when requesting a raise (and consider whether a pay hike would be better and more easily granted).
Be prepared to discuss what the practice will want in return for a retention bonus. For example, are you willing to remain employed for a set period at the practice? Also, consider whether the bonus should be paid in a lump sum or a series of payments. Be ready to negotiate that as well.
A retention bonus is taxable as supplemental wages, so explore how it would affect your taxes. Once you successfully negotiate a bonus, review the contract language carefully, and make sure you understand and agree with the terms and conditions.
Don’t wait until your practice is in a Catch-22. During team meetings, allow your professionals to talk about parity, and brainstorm solutions together. Also, ask your practice managers about ways to reward and retain tenured veterinarians.
A BROADER LOOK AT EMPLOYEE RETENTION
If your veterinary practice is experiencing salary compression or hearing complaints from tenured veterinarians when new doctors receive sign-on bonuses, consider the following:
- Does your practice need to reevaluate pay levels? When was the last time you compared yours to the market averages and what top practices offer? What adjustments can you make to mitigate adverse reactions to financial enticements for new hires?
- Can you offer wellness benefits or gym memberships to veterinarians on their first anniversary?
- Could you help employees enroll in leadership-focused continuing education courses that would allow them to take on additional responsibilities and earn attractive compensation?
- If you give two weeks of vacation to a new hire, can tenured doctors get four weeks?
- Can you offer tenured veterinarians more desirable hours, such as no Saturday work?