Don't let veterinary team member raises raise your blood pressure

Dr. Florence Flowers sat down at her desk. She looked at the stack of bills and mail and grimaced. She had owned Waynesville Pet Hospital for two years, and it was growing despite the recession.

She had noticed a few less clients this year, but she had continued to hire staff members to help her and her new associate. She loved her staff and they affectionately called her "Flo-Flo" when clients were not around. She didn't mind. Her new associate, Dr. Ann Beasley, was hard-working and worked well with staff and clients. Life was good.

Just then, Marilyn Johnson peeked into the office: "Dr. Flowers, can I talk to you for a minute?" She waved Marilyn in.

"Thanks." Marilyn lowered her eyes a bit and began talking.

"I need to give you some warning, Dr. Flowers. I really have enjoyed working for you, but I need to make more money."

Marilyn coughed and went on, " ... I have an opportunity to work at the local community college. I interview tomorrow and my friend who works there heard they really need people and that I was likely to get the job. "

Dr. Flowers tried not to show her shock. Marilyn was only a "fair to middling" worker, and Dr. Flowers mostly overlooked her slow and often haphazard approach to reception duties.

Dr. Flowers wanted everyone to love her, and she very seldom pushed her staff. The staff was either self-trained or took direction from others. Dr. Flowers just hoped that everything would work out if "we all got along."

She took a moment then replied: "We'd like to retain you if we can. How much of a raise would you need?"

Marilyn thought about it a moment.

"The college is offering about $4 more per hour, and they have a gazillion benefits."

Dr. Flowers knitted her brow. She had little training in staffing issues from vet school, and the practice where she had previously worked gave her inadequate training in this area. She had found out that it was much harder than she had imagined.

Dr. Flowers hated the prospect of hiring a new receptionist—especially because Marilyn had agreed to work most Saturdays.

"I can give you $3 per hour more."

Marilyn thought to herself, "That was easy."

Marilyn thought for a moment but did not hesitate: "OK, Flo-Flo, I think I would like to stay too—can I work one less Saturday per month?"

Dr. Flowers squirmed in her chair—she could feel her back starting to hurt.

"All right, if you can get Jenny and Claire to work in your place occasionally."

"Thanks, Flo-Flo. You won't regret it."

As Marilyn left, Dr. Flowers turned back to her desk and the painful process of opening bills. Mixed in with the pile of drug bills was a statement from her insurance company. It seemed she owed more to the company because of the increase in her staff payroll.

The letter also explained that someone from the company was coming to do an internal audit in the next 30 days.

I wonder what that means," she thought.

The costs of having staff seemed to be increasing faster than her client base and her bottom line. And for the first time Dr. Flowers had to forgo her own paycheck for a week to keep up with expenses.

She scratched her head.

"I wonder what it really costs me to hire an employee," she said.

That thought had seldom crossed her mind. She liked having a lot of staff around, and the clients seemed to love all the attention shown to their pets and the oversight even after closing time that the doctors and staff showered on the pets.

Dr. Flowers had noticed that Dr. Beasley seemed to need a lot of staff to help her. Dr. Flowers sometimes had to wait for a staff member to help because Dr. Beasley had two or three veterinary technicians "occupied" at a time. Dr. Flowers usually didn't say anything—it might rock the boat and that was the last thing she wanted.

She opened another bill. This one was thick. It came from her medical insurance company.

She carefully flattened out the heavily creased stack of papers. The cover letter informed her that the enclosed papers indicated a substantial increase in premiums for the coming year for those in her insurance pool. The gobbledygook within was hard to decipher and Dr. Flowers finally determined that a lawyer in some concrete tower somewhere was holding her hostage. She threw the papers down.

"I'll deal with that later," she said as she waded through the pile of envelopes.

A few minutes later, the office door creaked open. Dr. Beasley slowly made her way toward the desk. Dr. Flowers had papers and envelopes scattered in every direction. "Flo-Flo" was in deep thought.

"Florence," Ann said.

No answer. Flo-Flo could have been robbed without reaction.

"Flo-Flo," Ann finally belted somewhat loudly.

Florence looked up as if in a trance.

"Florence, I need to tell you something."

"What is it?"

"It's the staff. They've all heard about the big raise you gave Marilyn. I think they all want to talk to you."

The art of management

Managing people is not for faint of heart. Veterinary medicine may involve animals but it's a people business. Hiring and maintaining staff and your sanity is a tricky and ongoing process. Here are some rules of thumb to keep you out of the hot water Dr. Florence Flowers has found herself in:

Rule of thumb No. 1: You need to treat your staff with respect and in a professional manner at all times. A close professional relationship is in order. Trying to "be a friend" all the time can get you in trouble.

Rule of thumb No. 2: Employees will never understand your expenses relative to their employment—until they're employers themselves. A corollary is that you as owner had better understand these expenses before hiring and retaining employees. (See sidebar)

Rule of thumb No. 3: Payroll expenses for an employee are to be kept private between employer and employee.

Rule of thumb No. 4: It is better to let someone go than to live with economic consequences that you cannot afford.

Rule of thumb No. 5: No management is worse than mismanagement—but not by much.

The cost of employing

All businesses, including veterinary practices, are grappling with hiring. Can you afford employees or, conversely, can you afford not to have them?

Hiring and training is a big expense. Ongoing expenses of payroll continue to climb. A lot of businesses, including veterinary businesses, are biding their time. Of course, it all depends on the quality and number of the applicants and the needs of your practice.

The long-term trend in veterinary medicine has been to hire more staff and delegate downstream as many technical and administrative duties as possible. This is the old management mantra based on division of labor. It works wonderfully, but only when the practice owner or manager has a nose for management and a keen ear for staff problems.

The financial impact on the practices nationwide of all this hiring has been enormous. This model "works" economically in the human medical field, where insurance and government obscure the real costs to the consumer.

In most other industries (other than medical fields), however, companies are trying to work with fewer employees and letting computerization takes over people functions. For example, in banking—where online services have almost replaced walking up to a bank teller—the hiring of tellers has dropped like a rock.

This has been a major factor in our current unemployment problem in the United States in that information technology has replaced many jobs. Who wants to hire someone when a computer will do the same job without complaining 24 hours per day?

In veterinary medicine, computers will never replace the need for "hands controlling animals." It takes two people plus the veterinarian to handle certain pets adequately without chemical immobilization. Therein lies the rub—we need people to help us.

The long-term question is, can technology help us create efficiencies in our staff that allow us to hire the "right" number of people for our practices? Part of the problem is, our profession is seasonal. An employee needs a paycheck year-round, but cash flow cycles with fluctuating animal hormones, daylight and parasite prevalence.

Many consultants recommend somewhere between three to five team members per veterinarian in the practice. For the time being we need to err on the low side until we get our management and financial act together.

Dr. Lane is a graduate of the University of Illinois. He owns and manages two practices in southern Illinois. Dr. Lane completed a master's degree in agricultural economics in 1996. He is a speaker and author of numerous practice-management articles. He also offers a broad range of consulting services. Dr. Lane can be reached at davidlane1948@yahoo.com.