Service fees and staff compensation: Is your veterinary practice on par with others?
With economic fluctuations across the country, veterinarians are keeping an eye on their practice's profitability-and their team's performance on the job.
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Businesses need to make a profit to stay afloat. And for veterinary practices, making a profit means adjusting service fees periodically to cover operating costs and take care of team members, says Karyn Gavzer, MBA, CVPM, a veterinary business consultant, writer and speaker. “Raising fees is a normal and routine part of running a business,” she says.
Based on the results of the 2013 Veterinary Economics Business Issues Survey, many practices are following that rule, with nearly one third raising their veterinary service fees 4 percent to 5 percent this year—an amount that surprised Gavzer. While she recognizes that certain parts of the country, especially large metropolitan areas, might sustain that kind of fee hike, a 1 to 3 percent increase is probably more doable for most practices—and necessary to offset increases in equipment, facility and staff costs and still make a profit.
Gavzer points out that while you’re not required to make a special announcement to clients when you’re raising your fees (most consumers expect this periodically), it’s absolutely critical to convey your fee adjustments to your staff—and make sure that in turn, they’re providing the kind of service that’s proportionate to the fees charged.
“The quiet confidence of the team in the value provided helps clients understand they received a good value for the price they paid,” says Gavzer.
What about staff compensation?
According to survey results, the majority of veterinary practices are allocating staff raises based on merit and performance, a trend Gavzer is happy to see.
“In the past, the most common system for pay increases was to give everyone the same percentage,” she says. “That’s so unfair to hard-working, dedicated employees—and it sends the wrong message to the slackers.”
When considering performance evaluations, Gavzer reminds practice owners and managers to be clear and fair when stating expectations for the team. Use job descriptions as a guide, but don’t make them the only standard by which employees are reviewed. Go beyond basic task expectations and inform your staff how you want those tasks to be performed. Incorporate terms like “be a good team player” and “show respect to others” when discussing job duties.
“A clear and fair system creates a healthy environment and fosters teamwork for practice success,” says Gavzer.
