During the past ten years, total support staff costs have fluctuated between 30% and 33% of medical revenue in multispecialty groups, according to the Medical Group Management Association (MGMA). The U.S. Bureau of Labor Statistics reports that wages and salaries totaled approximately 70% of private employers’ staffing expenses in 2014, with benefits accounting for the remaining 30%.
The cost of your support staff includes salaries, and one option for retaining high-performing employees is simply to pay higher wages.
That’s a costly proposition, however. Not only does it mean shelling out more money, but it could also put “golden handcuffs” on employees who may become unmotivated and unproductive—and unwilling ever to leave your employ.
Paying a competitive wage is vital, but don‘t overlook the benefits package you offer to your employees. You may find ways to save money, not by cutting benefits, but by more appropriately targeting benefits to the needs of your staff.
Although it may be tempting to reduce staffing costs by cutting a staff position or two, research by the MGMA reveals the value of adequate staffing. The ratio of staff to full-time-equivalent (FTE) physician tends to be higher in practices that performed better than comparable practices in profitability and cost management, according to the MGMA. The lesson? These practices make better use of their employees than other practices, significantly raising the level of the practice’s productivity and bringing a positive return on their investment.
Are benefits optional?
Most items in an employee benefits package are optional. But consider that whatever you might save by eliminating or severely reducing benefits will come back eventually in the form of an expense to your practice if you can’t retain employees or morale declines, or you can’t effectively compete for the best candidates when new openings occur.
Once your benefit plan is in place, consider framing it for employees. Brochures and forms are nice, but take the time to document all of your benefits on one page and put a dollar value to them. Divide the value by 2,080—the standard hours worked per year by a full-time hourly employee, and you’ll have the per-hour rate of your benefits.
Present a benefits statement that delineates the benefits and the associated costs to potential candidates alongside the hourly rate you’re offering. They’ll see the proposed hourly wage ($16.75, for example) but also the value of the benefits (let’s say $5.12.) Potential and existing employees will be pleasantly surprised by the investment you are making in them. An accounting of benefits can be very influential in attracting and retaining employees.
A comprehensive benefits plan is critical to attracting and keeping highly-qualified employees. Even in the largest urban markets, the healthcare community is like a small town. Word will get around quickly if you have built a reputation as a progressive organization. And you will need the flexibility that qualified and motived employees provide in order to meet the many challenges of today’s medical practices The benefits package, in addition to salary, is a key tool to help retain those valued workers.
Take the time to review your benefits package to ensure that it complements, rather than sabotages, your staffing strategy. Below are a number of key benefit options to provide your employees.