Incentivizing retention

Staff retention is key to the success and sustainability of veterinary practices. It directly influences team morale and workplace culture, the quality and continuity of patient care, client satisfaction, and more. Indeed, engaged and loyal team members could be considered a practice’s greatest assets.

It makes sense for practice leaders to incentivize valued team members to stay. After all, a team member’s departure carries a cost in the form of lost revenue and time spent finding and training a replacement.¹

These incentives can take many forms. Nonfinancial offerings—like support, recognition, psychological safety, and empowerment— can foster job satisfaction and a sense of being valued, encouraging team members to stay.^2,3 But compensation also plays a critical role and, for many team members, matters a lot.^4,5

Are salaries keeping up?

Figure 1. Average Anticipated Income of New Graduates Entering Full-Time Work⁶

So, how is the profession doing regarding pay? Recent American Veterinary Medical Association (AVMA) surveys offer mixed news. Data from the 2024 AVMA Report on the Economic State of the Veterinary Profession⁶ suggest that the current job market is rewarding to new graduates in compensation, but those rewards have not translated to longer-term employees.

Anticipated incomes for new veterinary school graduates (Figure 1) have been rising steadily for the past several years after declining slightly on the heels of the Great Recession of 2008.⁶ The rise is seen even after adjusting for inflation (real income in 2022 dollars), meaning potential gains in new graduates’ standard of living and the ability to pay off educational debt.

On the other hand, we cannot say the same for veterinarians across the board. Although nominal incomes for the average veterinarian have recently made good gains, inflation adjusted incomes have been stagnant since at least 1999 (Figure 2).⁶ This means that, overall, the purchasing power of veterinarians has essentially remained unchanged for more than 2 decades.

Figure 2. Average Professional Income of Veterinarians⁶

What are the potential implications?

If you think your team members are unaware of or unfazed by the situation, think again. Compensation can be the elephant in the room, and perceptions of insufficiency or unfairness in pay can erode relationships among staff, damage morale, and encourage longer-term team members to seek work elsewhere to capitalize on what new veterinarians are experiencing.

Time for a compensation checkup

Finding the sweet spot between what you can offer regarding wages and other means to help team members thrive inside and outside the workplace is important. A good first step would be to give your team’s compensation a checkup as follows:

Consider the last time each team member received a raise and the amount of that raise. From 2021 to 2023, the average annual inflation rate in the US ranged from 7% to 4.1%.⁷ Has your team’s pay kept up with inflation?

Benchmark compensation for your team members. Historical summary data, such as in the State of the Profession Report⁶ or on the US Bureau of Labor Statistics website,⁸ show what has been rather than what is or should be, but still can be a valuable source of information. It also can be helpful to assess the competitiveness of your compensation packages against those offered by employers looking to attract new team members. Explore job postings on the AVMA’s Veterinary Career Center.

Factor in the cost of living in your area. The costs of housing, transportation, groceries, and other necessities impact purchasing power. Use the AVMA’s new JobFIT tool to discover how your location compares with others.

Review the various roles on your team and the responsibilities, qualifications, and experience required for each. Use this information to help you develop wage ranges for the different roles.

Think about what other financial benefits or perks you might offer, such as paid licenses, continuing education expenses, health or liability insurance, retirement plans, and paid time off. See the State of the Profession Report for a snapshot of common benefits.

Consider retention bonuses for longtime staff to demonstrate your appreciation of them.

The bottom line

The financial investment you make in your team can pay dividends now and into the future. When team members feel valued and fairly compensated, it can promote a supportive and collaborative environment. That can benefit individual and team morale, patient care, client relations, and the profession.

You likely will need to find ways to increase revenue or reduce expenses to cover the costs of any changes you decide to make, but losing team members could cost you more. A few strategies to free up funds include expanding services or retail sales, optimizing the use of physical space, and streamlining operations to boost productivity.⁹

References

1. Neill CL, Hansen CR, Salois M. The economic cost of burnout in veterinary medicine. Front Vet Sci. 2022;9:814104. doi:10.3389/fvets.2022.814104
2. Brakke Consulting and Merck Animal Health. Creating a positive, more energized veterinary team. Merck Animal Health. 2024. Accessed June 12, 2024. https://www.merck-animal-health-usa.com/offload-downloads/2023-vet-team-wellbeing-presentation
3. Lederhouse C. Study: fair pay, appreciation for work top factors in employee retention. American Veterinary Medical Association. Updated May 2, 2024.Accessed June 12, 2024. https://www.avma.org/news/study-fair-pay-appreciation-work-top-factors-employee-retention
4. AVMA Veterinary Economics Division staff. How to attract and keep staff in a job seeker’s market.dvm360. 2023;54(7):68. 
5. McKay CH, Vaisman JM. Psychological safety, purpose, path, and partnership reduce associate veterinarian desire to leave current employment. J Am Vet Med Assoc. 2023;261(10):1518-1524.doi:10.2460/javma.23.03.0158
6. Doherty C, McKay C, Ouedraogo FB. 2024 AVMA Report on the Economic State of the Veterinary Profession. 2024. Accessed June 12, 2024.https://ebusiness.avma.org/ProductCatalog/product.aspx?ID=2157
7. US Inflation Calculator. Accessed May 3, 2024. https://www.usinflationcalculator.com/inflation/current-inflation-rates
8. Occupation employment and wage statistics. US Bureau of Labor Statistics. Accessed June 13, 2024. https://www.bls.gov/oes/
9. Nolen RS. Increasing efficiency, salaries can help practices retain employees. American Veterinary Medical Association. November 8, 2023. Accessed May 3, 2024. https://www.avma.org/news/increasing-efficiency-salaries-can-help-practices-retain-employees