By Ken Krivacic, OD, MBA
August 11, 2021
The labor market has significantly opened up–for job seekers. The post-pandemic world means many more job opportunities and choices for your staff members. Here are key ways to keep your highest-performing employees.
We have been looking for an optician and a front desk person in our office for the past two months, and our office manager tells me few people are applying for the position and the few who do are not up to our standards. I know other businesses have been in the same boat over the past few years. This hit home, when driving back from lunch last week, I saw a sign in front of a casual dining restaurant that had the usual “Hiring Now” message along with an extra note that promised a $250 signing bonus. Two Hundred and Fifty dollars! – at a restaurant! That was a new one for me.
What is going on with our economy and the job market right now, and what can we as practice leaders do to protect the revenues of the practice?
The Current Job Market
Let’s begin our discussion with the job market. If you are currently an employer, trying to find qualified employees is difficult. The August 9, 2021, Job Openings and Labor Turnover Summary (JOLTS) from the U.S. Labor Department is revealing: “The number of job openings increased to a series high of 10.1 million on the last business day of June, the U.S. Bureau of Labor Statistics reported today. Hires rose to 6.7 million and total separations edged up to 5.6 million. Within separations, the quits rate increased to 2.7 percent. The layoffs and discharges rate was unchanged at 0.9 percent, matching the series low reached last month.”
The JOLTS report shows how many options your employees have now: “On the last business day ofJune, the job openings level increased to a series high of 10.1 million (+590,000). The job openings rate rose to 6.5 percent. Job openings increased in several industries, with the largest increases in professional and business services (+227,000); retail trade (+133,000); and accommodation and food services (+121,000). The number of job openings increased in the South region.”
The easy answer is to blame the stimulus dollars that employees are getting. Three hundred dollars a week on top of unemployment benefits is nothing to sneeze at, and some people looking for a job can afford to be much pickier than they were previously. Yet there is contradictory data. If it was strictly the government payments resulting in a lack of people looking for work, would that not have affected the lowest-wage individuals?
“In fact, the industries that accounted for the bulk of the slowdown in payroll gains were within the middle of the wage spectrum: $18.50 to $31.50,” The New York Times reports. If that is correct then that would affect a majority of optometry’s workers.
Other reasons workers may be opting to stay home is fear of infection in an environment where they are around numerous people daily, or if they have preexisting conditions that put them at higher risk of infection. Parents also may be deciding by necessity to stay home due to the lack, and the high cost, of child care.
What is the answer to keeping employees and attracting new ones?
Whatever the cause, and it’s probably due to a combination of many factors, the fact remains it’s more difficult to fill job positions than it has been in years. So, what can you, as owner of your practice, do to survive in this new business environment?
One place to start is to listen to employees. “A quarter of workers are looking to make a change, according to a recent Prudential Pulse of the American Worker Survey. Those workers say they want more pay, more work-life balance and opportunities to grow and learn,” according to a Dallas Morning News article about the employment challenge.
To keep your current employees from looking for employment elsewhere you may need to consider pay raises. This strategy may also apply to applicants for your job openings. You may have to pay more to hire the right person than you have in the past. For an owner that is usually a hard pill to swallow, but so is a drop in revenue when patients walk out of your optical because there was no one to help them. In making these hard choices consider revenue over expenses.
Let’s do a rough example of how the math adds up. The average employee generates approximately $150,000 of yearly revenue for the average optometric practice.
Let’s assume our hypothetical practice has five employees and the practice yearly revenue is $750,000. One employee has found a job somewhere else making $1.50 more per hour, and you don’t want to match that. What happens to your practice net if you decide not to replace that employee and instead save the cost of another employee?
5 employees x 150K = 750K revenue
practice net = $225K (assume net 30%)
4 employees x 150K = 600K revenue
practice net = $180,000K (assume net 30%)
In this example you saved the $30,000 per year the employee made, but lost $45,000 in annual net – is it worth it?
Let’s assume to keep the employee you have to give a 5 percent raise, and to keep everyone else happy, you give the other four employees that same 5 percent raise (you truly are generous).
The net stays the same $225,000 (apparently, they didn’t work any harder after the raise)
What happens to your net with the increase in pay?
At $30,000 per employee in the original pay the net is $225,000
At $31.5K (5% raise) the net drops to $217,500K
The question then becomes: are you willing to reduce your yearly net by $7,500 and keep all five employees?
As practice leaders we have difficult decisions to make, but if it’s me, I’d rather concentrate on keeping revenue high even if it means sacrificing slightly on the net of the practice.
To address the work-life balance need, consider allowing some of your staff to work from home. With technology, not every position needs to be in the office. Could an insurance clerk work from home? Our business manager, who handles payables and payroll, works from home and only comes in 1-2 times per week to collect data.
Could you fill one position by job sharing? Two part-timers could function as a full-time tech for instance.
What about farming out some of the functions in the office? These could be some of the duties listed above such as payroll or insurance filing.
Again, with technology could some duties be automated? These could be sending recall notices to patients, verifying insurance or informing patients that their glasses are ready. There are some good products available that perform these tasks.
Other Articles to Explore
Opportunities to Grow and Learn
The final way to try to keep employees is by making your work environment more appealing. Constantly train your employees. It is better for the employee and keeps them interested, especially if they are leaning a new skill. This additional training almost always benefits the practice as a whole, since a better-trained employee makes a better impression on patients. Don’t be afraid to delegate more and let employees take more responsibility.
None of the options above are easy, and you may see your staff costs rise through this current employment challenge. Keep in mind that many of these challenges are cyclical and things are likely to change. The problem is no one can predict how long this will last, so you need to be proactive through these challenging times. Finally, attitude can make a difference. View your employees as an asset and not a cost, and watch them help you grow your practice.
*Photo credit, top of page: Getty Images