Insights From Our Editors

When Are Employee Demands for More Money Worth Meeting?

By Mark Wright, OD, FCOVD,
and Carole Burns, OD, FCOVD

Feb. 16, 2022

In the midst of the Great Resignation, it’s an employee’s market. That makes it more likely employees will ask you for more money. What do you do when an employee, who is not offering to provide additional value, asks for more money? Do you accommodate them to avoid having an open position you fear you won’t be able to quickly fill? Here is what to do when this challenging situation arises.

Employers are having a problem finding qualified employees. As a result, what we are seeing across the country is employees making increased demands for more money and more benefits just to stay in their current positions.

If the employer does not acquiesce to the demands, then the employee threatens to leave the practice. This problem is occurring with not just “professional employees” (e.g.: opticians, optometric technicians), but also with front office staff, people in the finance department, and, well, everyone.

The push to raise the minimum wage to $15 per hour combined with the pandemic contributed to this current situation. People’s attitude about work changed during the pandemic, especially when people were paid more for not going to work than what they would receive going to work. We predict this situation will continue for a few more years. Eventually, the pendulum will swing back and it will become an employer’s market, but until then we need to come up with effective strategies to deal with the current situation.

There are several approaches that have proved effective when you decide the employee is worth keeping. They all involve redefining the job. Examples would be to add cross-training as a requirement, moving the employee into management, adding to their job responsibilities areas that no one is currently in charge of (e.g.: inventory) and/or adding a quality control component. Word gets around. If you give the employee what they are asking for without redefining the job, expect a line outside your door of others who also want a raise.

Simultaneous with redefining the job, you should be working on ways to increase gross revenue collected to bring your numbers back under control. Your payroll as a percentage of gross revenue collected should be no higher than 22 percent (if you are a general, non-specialty practice).

So, if after figuring in the new pay raises given to employees, your gross revenue collected projects out to be 25 percent, then you need to increase your gross revenue collected by at least 3 percent. Your potential action options are price increases on fees not covered by third parties, increasing the number of new patients and/or increasing your per patient income.

Since excellent practice managers actually manage, you need to create a plan and then work the plan to get the results you want. Here’s the key question: Who is going to be in charge of making this happen in your practice?

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