It has been said that money can’t buy happiness; well, we know it certainly can’t guarantee that you’ll have a great staff. That said, it is probably a safe bet to say that most of us put a desire to pay low staff wages at the top of our list when deciding to hire a new staff member. In our company’s consulting experience, I would say that while not always true, it’s generally true that higher paid staff members perform better than lower paid ones. Again, it’s not always true, but looking at a cross section of practices we’ve worked with—across many geographies and different life cycles—I believe it is accurate to say that higher netting practices (in absolute dollars, not percentages) pay better than lower netting ones.
The Three Possible Scenarios
Let’s examine the root of this observation.
Dr. Conventional needs to hire a new optician to replace one who is leaving. His current optician makes $50,000 per year with 10 years of experience and has been working there for six years. As our practitioner reads through an application, his gaze involuntarily and immediately goes to the “requested salary” box. He sees $55,000 per year and finds that the candidate also has 10 years of experience. With this information in hand, Dr. Conventional starts the interview process. Unconsciously and without directly asking the question, the interview is centered on why Dr. Conventional should justify a pay increase for someone with the same experience.
Now, let’s meet Dr. Smarter. He is in the exact same situation as Dr. Conventional. However, when he first looks over an application, he looks at the applicant’s experience and qualifications. Based on what he sees, he calculates a fair salary of $50,000 in his head. He starts the interview and upon hearing the requested salary of $55,000, he assesses whether the candidate’s experience justifies the dollar amount.
Like her colleagues, Dr. Smartest also sees the same application but decides not to read it before speaking to the candidate. She interviews the candidate from a fresh perspective and independently assesses whether the interviewee is a good fit for her practice, keeping her own philosophy and culture in mind. After deciding that the candidate is indeed a good fit, she readily offers the requested salary.
Understanding the Difference
The key difference between these three approaches to interviewing the same candidate is how their focus changes from input (e.g., Dr. Conventional) to output (e.g., Dr. Smartest). In layman’s terms, we’re changing the conversation from “how much will it cost” to “how will the person fit into my practice.”
Historically, when talking about performance results, hiring based on finding a desired personality is a more effective strategy than strictly looking at the dollars and cents. While there is no guarantee that you will always get what you pay for, you can control the type of staff member you hire; remember to look for a good fit for your office personality, current staff and culture. I recommend putting those attributes above experience and desired salary.
It is helpful to look at your labor costs as an investment as opposed to an expense. While a salary will show up on your profit and loss statement as a line item expense, what you don’t see is how the investment in your staff pays higher dividends than any other practice venture. It certainly trumps physical plant upgrades, technology purchases or inventory expansion.
Keep in mind that when you pay more, you should expect more. Most human resource professionals and psychologists would agree that higher expectations lead to better results. (I suggest you read up on the Pygmalion Effect and self-fulfilling prophecies to learn more about this!)
Finally, remember that on the flip side, a prospective staff member will compare your offer not only financially to what other practitioners might offer, but also to what their skill set might earn in a non-optometric practice position.