Pay Raise Requests: How to Make Them and How to Respond

Sep 28, 2021 | Business & Contractual Issues, employee, Practice Management, veterinary practice

Pay Raise Requests: How to Make Them and How to Respond

Kellie G. Olah, SPHR, CVPM

Veterinary practices, like many other businesses, often award pay raises in connection with an annual employee review. It’s a logical time to do so since that’s when employers provide performance-related feedback to their employees.

As an employee, you may feel that you deserve a raise, even though it’s outside of the normal timeframe for your practice to award one—perhaps, for example, you’ve taken on extra duties during the pandemic. If so, how should you approach your supervisor? As a manager, how should you respond to such a request? This article takes a look at both sides of the equation.

Employees: Preparing to Ask

If you’ve decided to ask for a raise at a time when one typically isn’t awarded, then it’s important to be prepared. Make a list of accomplishments you’ve achieved, quantifying them whenever possible, and writing down how these accomplishments have benefited the practice. In other words, what is the business value of what you’ve done? If you’ve won any awards, received a letter of praise from a manager or customer, or otherwise gotten concrete evidence of your performance, gather that information together for when you ask for a raise.

It can help to have data on hand about the average wages of a person who is doing your job in your geographical area. Where does your paycheck fit in? If yours is less than the average amount, it may be easier to build your case for a raise than if yours already matches or exceeds that figure—but you can still share information about why you feel you’re worth the dollar figure you’re requesting if you feel your case is strong enough.

Ask to privately meet with the appropriate manager and practice how you’ll present your request. During the meeting, make it clear that you’re asking for a raise that goes beyond the one you’d typically receive during your annual performance review.

Be prepared for a range of responses from your manager and know how you would respond to each of them. If, as one example, your manager says that they would love to give you a raise, but it just isn’t financially feasible right now, ask what you would need to do to earn that raise and a date when this topic can be revisited.

Employers: How to Respond

As a manager, you may be taken aback when an employee asks for a raise during a time when your practice doesn’t typically give them. Perhaps you have the authority to make the decision or maybe you need to discuss it with a human resources manager. Whether you are surprised or not—and whether you have the authority to decide or not—the savvy response is typically the same. Ask for more information and avoid reacting immediately. Listen carefully and take down notes. Once you feel that you have enough information, it’s perfectly fine to ask to schedule a follow up conversion. In either case, thank the employee for bringing this information to your attention and remain pleasantly professional and neutral.

Then it’s time to evaluate the case that the employee has built for this request, as well as to talk to other people in the practice who would have input into this decision-making process. What is your practice’s policy, in general, on giving raises? If you don’t have a policy already created, how have such requests been handled in the past? Is your practice’s philosophy that you only give raises during a certain time of year or do you consider each request on its own merits?

Compare that person’s wages both internally and externally, and doublecheck data they’ve given you. This involves looking at where this employee falls on the practice’s payroll. Do they receive a wage that’s comparable with other people performing the same work and who have been at the practice for a similar amount of time?

It also involves verifying what this employee might receive at other practices in the same geographic area. Also consider how important it would be to retain this person at your practice.

In some instances, the answer may be clear. The person may not have demonstrated a good case to get a raise or their job position may not warrant a higher pay rate. Or it may be that the employee asking for the raise successfully took on a big special project but doesn’t necessarily perform at a higher rate, overall. In that case, a one-time bonus or extra time off could be a good compromise.

If, though, this employee has made a good case for a raise, it can make sense to pitch the idea to others in the practice who would need to approve the pay increase. In a sense, you’d be preparing for the ask in the same way that the employee did with you. During this conversation, you can also focus on the high costs of recruiting and training new employees, with a focus on not being penny wise but pound foolish.

Sticky Situations

Sometimes, the situation can get more complex. These can include the following:

1. An employee threatens to quit if not given a raise
2. You do give one employee an off cycle raise; other employees hear about it and they want one, too
3. A star employee gets an offer from another practice

In the first scenario, an employee might literally threaten to quit (“If I don’t get this raise, I’ll need to leave”) or it may be implied (“The new practice in town pays more and they’re hiring”). If this happens, the process—at least at first—can be the same. Listen carefully to your employee’s request and then set up a follow up conversation, which gives you time to think about how to respond. Consider the merits of the employee’s request, as before.

This time, though, you may also want to consider whether this employee uses the “I’ll quit” card in general, as leverage, or if this may be a genuine statement from the employee—meaning that, if they don’t get a raise, they’ll financially need to find a job elsewhere. Does that change your decision?

Will this situation trigger a revision of your policies about raises, perhaps limiting them to a certain time annually? No matter what you decide, assume that other employees will hear about it, regardless of any company policies that require salaries to remain confidential. How will you handle the situation when other employees ask to also get a raise? There is no one size fits all solution. The idea, here, is to look beyond the specific request being made by a specific employee. Instead, place this employee’s request into an overall context of the practice and make decisions that make sense for all employees.

In the third scenario—one where an employee gets another job offer—was that employee job hunting or did the offer come, unsolicited? If your employees are being recruited, it may confirm to you that you have a great team without necessarily indicating that those employees are unhappy. In other cases, employees may be putting out feelers to see what they’re worth in the job market—and, in other situations, those employees may be dissatisfied in their current position.

If an employee asks if you would match an offer from another practice, it can help to determine if they really want to stay. If they are unhappy with aspects of your practice, they may well leave the next time they get a job offer. If they do want to stay, how valuable are they to your practice? How difficult would they be to replace? If you do give that particular employee a raise, what impact would that have on other employees? Again, no one right answer exists.

Sidebar: How to Deny a Raise Request

Sometimes, you’ll need to turn down a raise request from an employee. If so, set up a private meeting and then tactfully yet honestly get to the point. If there is a performance issue, share some specifics about how this employee could work towards getting the desired raise. If it’s a financial issue, say that. This isn’t a time to get into exhaustive detail. It is, however, an opportunity to encourage the employee, if possible, and let them know what you appreciate about them.

Through this process, you may discover holes in your practice’s policies about giving raises. If so, now is the time to fix them so that more clarity exists for everyone, going forward. If this process uncovers disparities (such as pay differences based on gender), then this is crucial to prioritize and address. Update your employee manual and share specifics.

Read the article originally posted in Today’s Veterinary Business HERE.

Associate Contracts for Corporate Consolidators

Jun 3, 2021 | Business & Contractual Issues, employee, Practice Management, veterinary practice

Associate Contracts for Corporate Consolidators

Veterinary Business Advisors, Inc.

www.veterinarybusinessadvisors.com

As the presence of corporate consolidators in the veterinary field increases, it has become even more important to understand what to look for when negotiating an associate contract with a corporate practice. Generally speaking, corporations can have a significant edge in negotiations because they can cause you to believe that their contracts are non-negotiable. They may, for example, say the following: “This is our contract for everyone.” In reality, everything is negotiable, and it’s your value that allows you to negotiate your own contract.

While it’s true you may have less negotiating power with a corporation than with a private practice, you will have more legal protection under the employment laws with a corporation. Ideally, all contracts should be reviewed by an attorney or translator experienced in reviewing veterinary employment agreements, because contracts are intended to prevent miscommunications in the future. Below are some key points to consider when negotiating a contract with a corporate consolidator (“CC”).

1. Term and Termination: How long will it be until your contract expires? Does the term automatically renew at this time? Note that, if a contract has a one-year term, that does not guarantee you a one-year employment. The employer may in fact have the ability to terminate you sooner. CCs like to use the term “at will,” meaning they can fire you at any time for any reason. Other ways of termination would be “without cause” with both parties agreeing to give “X” number of days’ notice before termination. Many CCs, though, will not want to give you advance notice, especially if they are taking over a new practice.

2. Schedule: How many scheduled hours per week are you required to work? Beyond that, how many additional hours must be spent calling owners, overseeing patient care, and more? Are there any required emergency hours? What about holidays, weekends, and nights? CCs tend not to give exact number of hours to be worked. They tend to use language such as “minimum of 40 hours” as opposed to “from 35-45 hours.” Specificity is against the interests of the CC.

3. Duties: What, as an associate, are you required to do? Review this, because some CCs may require you to do additional work that you didn’t need to do for old management. Do you, for example, have to organize staff meetings? Participate in marketing? Handle emergencies during work hours? Being specific in the contract almost always benefits the employee. Note that private practices tend to be more willing to mentor you in these duties than CCs.

4. Compensation: Typically, compensation is paid by salary, commission (production), or a combination of both. How is your production calculated? Do you get production reports? Are there any deductions from your salary and, if so, what are they? Is there negative accrual during slow production months? CCs can change how they calculate their production pay. If you’re not aware of how you get paid, you may not realize why your production pay has changed.

5. Benefits: Most practices offer some sort of benefits package, and CCs typically offer larger and better packages than private practices. However, these benefits can be subject to change and are not guaranteed by the employer. CCs tend to comply with state and federal employment laws that govern how benefits are given, while private practices may not, due to lack of knowledge. These benefits are tax deductible and are not calculated as employee income. Therefore, there is a large savings to be gained with a larger benefits package. This usually includes but is not limited to health insurance, professional liability insurance, and retirement benefits. Note that, if a CC offers malpractice insurance, it often does not cover license defense.

6. Exclusivity: Employers will usually require you to perform services for their hospital alone. This would prohibit you from doing any shelter or relief work on the side. This may even prohibit any other type of job, even if not related to veterinary medicine. CCs are no exception here, and you must negotiate specific exceptions if you wish to work outside of the CC.

7. Performance Evaluation: Will you be provided written or oral evaluations? When? Does this correlate to compensation?

8. Signing/Relocation Bonus: In today’s market, veterinarians are valuable and most places will offer some kind of sign-on bonus. CCs can usually offer a significantly higher bonus and, depending on where you are coming from, often offer a significant relocation allowance as well. Most of these bonuses are tied to retention, meaning you must work there for a predetermined amount of time—perhaps one year—to keep the bonus. If not, the money must be repaid. Also, in your contract, it’s important to find out if the bonus can be kept if you are fired without cause. One perk of working for CCs is that, if you are moving, they can often help you to relocate to another one of their locations, which can make the process significantly easier.

9. Non-Competition: The agreement states that the employee will not directly compete with the employer after termination of employment. The provision must state a specific distance and time (e.g., two years, ten air miles). This area should cover where 85% of the practice’s clientele comes from (trade area). When does your non-compete kick in? When does the non-compete become enforceable? CCs often have a much stricter policy than private practices. For example, some do not allow you to work in proximity to any of their hospitals. This could easily double or triple the area you could be prohibited from working in and can change if new hospitals open up. Also, the scope of restricted activity may be broader with CCs. In addition to small animal medicine, they may include intellectual property, research, practice management, and so forth.

10. Non-Solicitation: This agreement states that the employee will not try to poach other employees away from the business to work elsewhere. This would apply even if you are outside your non-compete area. It is important to also know that some CCs will not allow you to solicit employees from any location of theirs, even if you don’t personally know them.

11. Assignment: There is currently a very active market for the sale of veterinary practices. Many employers include provisions that allow your original contract to be signed over to the new owner. This means the buyer would not need to negotiate a new contract with you. It is important to check for this provision, whether you currently work for a private practice or already work for a CC.

It is important to understand all aspects of your contract while negotiating your associate contract to decrease any confusion during and after your contract period, whether a private or corporate practice. With the rise of corporations in the Veterinary industry, it is also important to note the differences between what a private practice and corporation could look like relating to an associate contract.

Try to make the contract as specific as possible so there is no ambiguity if an issue arises. Ask as many questions as you need prior to signing to clarify what exactly your job will entail. Always have the contract reviewed by a lawyer familiar with the field and do not feel pressured to sign prior to this. Corporations may be pushy and imply they do not negotiate, but this is your well-being and livelihood, not theirs. Know your value and pursue it in any contract.