Optimizing Millennial Success

Millennials are on track to be the most educated group of people entering the workforce in history. They have been defined as “ambitious high-achievers” and, as such, it was speculated that employers would appreciate these hard workers entering the workforce. However, the Millennials’ transition into the workforce has not been as smooth as it was predicted, and misunderstandings between groups from different generations have allowed for the untapped potential from Millennials to be wasted. There are various characteristics of Millennials that when understood and properly managed by employers, can create a happy working environment for all generations.

Millennials are commonly defined as people born between 1981 and 2000, although no absolute chronological endpoint has been established for this generation. Currently, they are young adults, falling between the ages of 17-37. They will soon become the largest living generation in America with nearly 75 million constituents.

The Millennial generation has been described as confident, ambitious, independent, innovative, optimistic, adaptable and technologically advanced. Those are potentially positive traits for an employee. However, as it happens with every generation, there has been some friction as the Millennials have entered the workforce. Criticisms are arising, perhaps to the largest inter-generational degree to date, as new perspectives clash with old ones. This is happening, in large part, because Millennial perspectives on information, job security, and leadership tend to be diametrically opposed to those of older, existing workers.

As Baby Boomers and Generation Xers are retiring, Millennials have been entering the workforce at increasing rates, with Millennials recently surpassing Generation Xers and Baby Boomers to become the largest component of the U.S. labor force, comprising 34.6% in 2015. By 2020, they are projected to comprise 46% of the labor force. Competitive employers will therefore be trying to attract and retain Millennial workers to create an edge for their business to succeed, and the best way to attract any demographic group is to understand what they want and then provide it. To understand Millennial motivation, one must look to the big influences on their generation to see what has shaped and helped to define them.  

Millennial Influences

Millennials, just like with preceding generations, have been shaped by the events of the world as they grew up. Events that occur during formative years tend to have a significant impact on people as they mature, with some sociologists saying that people are disproportionately influenced by events that occur between their late teens and mid-twenties. Others believe that the range of influencing years is broader. Most agree that by their late twenties and early thirties, people become more set in their beliefs. By this definition, the big influencers for the Millennial generation would include helicopter parents, digital media, terrorist attacks, and economic recessions, including the burst of the dot-com bubble and the subprime mortgage crisis.

Helicopter Parents

Millennials were often raised by parents who scheduled everything for them. Their schedules outside of school were frequently packed with everything from sports practice to music lessons. Many parents of Millennials had no trouble petitioning a coach for more playing time or a teacher for a better grade for their child, making Millennials a more micromanaged generation. Notably, this packed schedule often involved group activities, frequently making Millennials great team players. Plus, Millennials are often very close with their parents and rely upon them as a source of advice and wisdom.

On top of their highly involved parents praising them, Millennials often received trophies for participation in their activities. This has fostered expectations that they deserve an award simply for showing up. On the plus side, Millennials want to continue receiving these awards, which can help them to focus on developing the talents and skills that will help them win coveted awards. This means they are often setting new challenges for themselves, which could be very useful in the workplace if properly harnessed. However, this has also led many Millennials to believe they are unduly special; 54% of them believe the workplace should adapt to them and it is therefore unnecessary for them to conform to company culture.

In summary, the helicopter parent influence on Millennials shaped them to be team oriented, externally motivated and confident, and has also led many of them to believe they are “special.”

Digital Media

Millennials were the first generation to grow up surrounded by the instant gratification technology of digital media. Because technology was integrated into so many aspects of their lives, from cell phones to IMs to personal computers, they are technologically savvy. They are therefore also experts at multitasking and have become accustomed to getting what they want, such as answers to questions, when they want it. Millennials also witnessed the birth of social media, which has allowed the world to shrink exponentially; through improved access, Millennials are exposed to more ideas, cultures and opinions. This has made them more open-minded and more networked than past generations. Having access to many opinions with the click of a button has also helped to shape this generation into a collaborative group.

The digital media influence has shaped Millennials to be team oriented as well as technologically savvy, open-minded, globally conscious, multitaskers and networked.

Terrorist Attacks

A bulk of this generation was still in school at the time of the 9/11 attacks, and they experienced an increase in helicopter parenting following this event. This fostered the generations’ dependence on technology, with personal cell phones being given to children so parents could contact them at any time.  Due to close ties with their parents, Millennials also experienced a reinforcement in the value of a sense of community.

During this character-forming time in the Millennials’ youth, they witnessed a senseless act of violence that demonstrated the fragility of human life. Thus, a sense of urgency seems to permeate this generation. They live their lives with borderline-delusional courage, unconventional work ethics and a ferocious need to customize their futures because they watched as other futures were cut short. They are therefore driven by their passions more than past generations and live more in the moment because of these events. This influence also helped to mold Millennials to be family oriented and passionate about making a difference.

Recessions

The 1990s were a time of steady economic growth and expansion; the mid-to-late 1990s saw optimistic entrepreneurs pursing new internet ventures, influenced by successes such as eBay and Amazon. Many internet companies called “dot-coms” were launched, and investors financed these start-ups. However, these ventures were not as profitable as originally assumed and many of the companies crashed, leading to a stock market crash. During the final decades of the 20th century, 30 million U.S. workers were laid off. For the Millennials, this meant seeing their parents lose their jobs. They were imprinted as children by a period of diminished job security and weakening ties between the employer and the employee. Company loyalty did not mean as much as it once had.

After seeing their parents bear the brunt of the dot-coms, Millennials experienced a recession themselves just as they were entering the workforce. This “Great Recession” lasted from 2007 to 2010, in large part because of mortgage credit being offered to subprime borrowers. When these borrowers defaulted on their loans, the housing market crashed, which affected the overall economy. It decreased wealth and consumer spending, lowered construction, limited the ability of firms to lend money, and limited the funds firms could raise.

The group of people who were affected most by this crisis were the Millennials who were just entering the workforce, particularly the graduating class of 2008. They had trouble finding jobs, much less jobs with high enough wages to offset their massive student debt. This caused many young adults to postpone major adult milestones such as marriage, or the purchase of their own car or home.

Even several years after the recession, Millennials are still having some difficulty finding jobs. Statistics from Pew Research indicate that 25-34-year-olds made up 48% of the unemployed population in 2015. Additionally, it has been harder for Millennials to access credit, which has caused some of them to settle for jobs they don’t want, with people from this generation frequently looking for new potential employment opportunities. They have seen layoffs or been in a position where they themselves could not find a job. Thus, many have responded with the mindset that they will not let the same things happen to them or are determined not to have them happen again; they are therefore constantly looking ahead.

These economic recessions made Millennials ambitious and stressed, and they have contributed to this generation’s external motivation.

Tips for Optimizing Success Based on Millennial Traits

Based on the major influences of the times, certain traits within Millennials arose that shape their motivation. These traits give insight as to what is important to Millennials, and thus, how they can be managed and fostered in the workplace to optimize success. Millennials are team oriented, family oriented, externally motivated, “special,” confident, ambitious, technologically savvy, open-minded, globally conscious, networked, multitaskers, passionate about making a difference, and stressed. Here are a few ways you can harness these traits to optimize workplace success.

Millennials are all about work and life. Nearly six in 10 (57%) of them say work-life balance and personal well-being in a job are “very important” to them.  Not surprisingly, then, lack of flexibility was cited among the top reasons Millennials quit jobs. And nearly 40 percent of young workers, male or female, in the United States are so unhappy with the lack of paid parental-leave policies that they say they would be willing to move to another country.

So, what options can you offer Millennials? Can you offer flexible scheduling, including but not limited to telecommuting elements? What is your parental leave policy? Should you take a second look at what you offer? When you talk to the Millennials at your practice, what options do they say are important to them?

Millennials prefer to work in teams, in part because they perceive group-based work to be more fun, but also because they like to avoid risk. Millennials also report that working and interacting with other members of a team makes work more pleasurable. Millennial workers like to be actively involved and fully committed to whatever projects they take on, and they contribute their best efforts to the organization when their work is performed in a collaborative workgroup or team.

What team structures do you have in place at your practice? Have you sat down with your employees to find out ways in which they would like more teamwork to exist? What changes can you make now? In the future?

Because they fear risk, knowing that health insurance is available and affordable is important to this generation. What are you able to provide them? Are there voluntary benefits you can offer them? Because this is a generation with significant student debt, increasing numbers of companies are offering loan repayment assistance. Have you investigated that option?

Millennials appreciate the opportunity to learn and grow. Have you sat down with them to talk about promotion possibilities and the best way to get the education and training needed for a desired promotion?

These are just some of the ways in which you can optimize Millennial performance at work and retain your best employees. It’s important, too, to avoid pigeon-holing any employee, assuming you know what someone wants because of the year of his or her birth. For employees of any age or generation, the way you can learn the most about their desires, fears, needs and wants is open and honest communication. Set aside time to learn more about your employees as individuals and help them with their unique career paths – and you will all benefit.

Key Factors to Consider in Appraisals and Assessing Practice Value

Written By:David McCormick, MS  Simmons Mid-Atlantic & Great Lakes
Stephanie McGinness, DVM Candidate, 2012

What are the key factors you should consider when assessing practice value?  Profitability and appraisals are both important parts of the process and the following is a list of guidelines and topics to help guide your future research.

 

Practice Value:

  • Profits drive the value of a practice. They are the return on owning the practice and it is the return that is being purchased.  The greater the return, the greater the value. Practices have appraised for anywhere from 110% to 15% of gross revenue.
  • “Profits” are what you would get if you owned the practice only – meaning you don’t work there and you don’t own the real estate (i.e., fair market compensation for your veterinary work, fair market rent and clean financials).
  • If a practice is financially healthy, it will have profitability in the range of 14-18% of revenues.
  • If a practice is financially healthy (14-18% profitability) then it will probably have a value that will end up being between 55% to 80% of revenue.
  • Asking what a practice will go for is like asking what the cost of surgery is; it is such a broad range that it’s tough to be accurate. The recent average of a practice sold by Simmons has a value of roughly 72%, however, they’ve been sold in a range from 30% to 95% and there’s even one on the market now at 110% that will close this month (June 2011).
  • The average practice these days has a profitability in the 8-11% range and thus is likely has a value that will end up being between 30% and 50% of gross revenues (if that).
  • Practice values in general have been decreasing. There’s greater pressure on profitability: increased support staff costs, increasing benefit costs, higher-end pharmaceuticals that can’t be marked up as much, etc.
  • The economy has also impacted values. If the practice was managing for revenues instead of profitability then typically the revenues *and* the profitability took a hit. Profits go down – so does the practice value.

Assessing Profitability & Practice Appraisals

  • It is best to have your practice appraised every 3-5 years for management and planning purposes. If the value is low, the profits were low.  If the profits are low it has to be a revenue and/or expense issue and we can help identify the problem(s).  Fixing the profitability improves the practice’s cash flow, increases the practice profitability and its financial health, and increases the overall practice value.
  • An appraisal is an opinion of value – and anyone can give you “an opinion”. These are big decisions.  If you want a good opinion you need to know where it’s coming from and select a qualified veterinary appraiser.
  • To assess a potential appraiser, request veterinary references and inquire about their experience level (particularly in the veterinary industry), accreditation and credentials (i.e. ASA, CBA, CVA, AVA, AIBA) with the understanding that they don’t guarantee competency, and compare their report to those prepared for you by previous appraisers to assess their report writing competence.
  • Any decision on value should be defendable and is based on the appraiser’s judgment, the financial analysis, and the conditions in the market for that area (assuming here that the goal is fair market value).
  • Free resources for estimating your practice profitability are available on the NCVEI.org website. Find the Profitability Estimator under the Benchmarking tools.  It was developed by the Veterinary Valuation Resource Council (VVRC) and is free.  It helps you go from the practice tax return to an estimate of your true practice profitability.  This is a similar practice to what we do in the No Lo Workshops hosted by VVRC at the major conferences.
  • If you’d like more in depth information, please visit the VetPartners website at www.avpmca.org

Veterinary Nurse Versus Technician: the Pros and the Cons

The Veterinary technician profession has been subjected to variability since birth. Today, it faces a new, and hopefully positive, change with discussions about modifying the profession’s title to “veterinary nurse”. A movement lead by the National Association for Veterinary Technicians in America (NAVTA) has illuminated differing opinions between those in and outside of the profession.

Veterinary Technician History

The profession began in 1908 when the Canine Nurses Institute made its first organized effort to train English “Veterinary Assistants”. Over the next eighty years, the profession grew. First, the American Association of Laboratory Animal Science created three different levels of “animal technician” certifications at research institutions. Next, the US Army, Purina, and State University of New York (SUNY) established “animal technician” training programs in the 1960’s, which the AVMA then began regulating in 1967. The AVMA waited until 1989 to adopt the term “veterinary technician”, feeling until then that people would be confused with the “veterinary” modifier.

Michigan State University and Nebraska Technical Colleges were the first animal technical educational programs accredited by the AVMA. There are now 230 AVMA accredited veterinary technician education programs. Of these, 21 offer four-year degrees and nine offer distance-learning (online) options. Even before the AVMA adopted the term, the North American Veterinary Technician Association (now called the National Association of Veterinary Technicians in America) was formed in 1981. It works alongside the AVMA to protect the profession and encourages veterinary technician specialty developments. However, the profession has not grown uniformly across the United States.

In the United States, 37 states have established “veterinary technician” licensure, 10 states have non-profit organizations that implement voluntary credentialing, and 5 states/territories do not have any credentialing systems. This means that being a veterinary technician today could mean that either the state government regulates your credentialing, you are privately credentialed, or someone gave you the title “veterinary technician” when you started working at a veterinary practice and there is no credentialing system in your state.

Pros of “Veterinary Nurse”

The profession is fragmented by more than their state’s accreditations. Depending on their location, Veterinary technicians currently have varying titles. There are 19 states that use “certified veterinary technician”, 15 states that use “registered veterinary technician”, 14 states that use “licensed veterinary technician”, and Tennessee uses “licensed veterinary medical technician”. With this amount of fragmentation within the profession, how do we as veterinary professionals expect the general public to understand or trust a veterinary technician’s job description? As such a close-knit profession, we forget the foreignness of our commonly-used terms. Most clients underestimate the value of their veterinary technician simply by not knowing the education process. In fact, in a NAVTA survey to human nurses, 71% did not know the difference between veterinary assistants and technicians. Yet, we are baffled when we find that credentialed veterinary technicians are repeatedly unhappy and facing low income, compassion fatigue, lack of recognition and career advancement, underutilization of skills, and competition with individuals trained on-the-job. Due to this culture, the profession has incredibly high turnover rates despite its increased demand by the growing veterinary industry; veterinary technicians are projected to grow 30% by 2022.

How can we, without spending incredible amounts on advertising, uplift our veterinary technicians in the public (and practice’s) eye? Many have suggested using the familiar and applicable “nurse” title. The word “technician” implies an individual who has mastered veterinary science and technology, while “nurse” incorporates caring for animal patients into the description. Heather Predergast, RVT, CVPM, SPHR, a specialist with Patterson Veterinary Supply, Inc., discussed the need to abolish the profession’s fragmentation. She noted that “there has long been a need for common credentialing in this area. The responsibilities and job tasks of a veterinary technician have evolved over time and are inaccurately described by the term ‘technician’, implying a definition of their identify based on technical tasks. The term ‘veterinary nurse’ will incorporate the art of caring for patients from a patient-centered perspective, in addition to the science and technology.”

For these reasons, NAVTA has launched the Veterinary Nurse Initiative in an action to unite a single title, set of credential requirements, and scope of practice. This movement would hopefully provide recognition to the profession and elevate its credibility by requiring further education. Like human nurses, differing titles would recognize individual’s efforts for further education. To distinguish associate and bachelor’s degrees, NAVTA has proposed designating Registered Veterinary Nurse for associate degrees and Bachelor of Sciences in Veterinary Nursing for bachelor’s degrees.

Australia and the United Kingdom have already changed the name to “veterinary nurse” with large success. As the movement poses potential in the States, many academic institutions and corporations, such as Purdue, Midmark Corporation, and Patterson Veterinary Supply Inc. have published endorsements for its change; however, the initiative does face fair opposition.

Cons of “Veterinary Nurse”

Many veterinary technicians still opt to keep their current title. When questioned in a 2016 NAVTA survey, the majority of veterinary technicians (54%) favored the term “veterinary nurse”, over a third (37%) wanted to keep the title “veterinary technician”, and the remaining surveyed were undecided. Most of the pro-technician responders attributed their answer to disbelief that it will be possible to change the title. Some current veterinary technicians have voiced unease at their unsure futures after working their entire careers in a state that does not require licensure. Another similar situation arises for those that have passed the veterinary technician national examination but have not graduated from a school accredited by the AVMA committee.

While, ideally, this veterinary nurse initiative works to unify the profession and ensure quality standards, we must realize that we may be alienating a population of technicians at the end of their careers that would be offended if required to pay for an accredited teaching program and learn alongside new, inexperienced future technicians. Another important consequence to consider is liability. Currently, liability for veterinary technicians falls to the veterinarian on all cases; however, human nurses have their own liability to practice under their license governed by a separate board. This is a consideration essential to address as we raise the accountability of veterinary nurses.

The Veterinary Nurse Initiative has faced opposition outside of the profession as well. In fact, the veterinary technicians initially opposed to changing the name also noted conflict with human nurses in any past attempted title changes. The Veterinary Nurse Initiative investigated this further by sending a survey to three nursing groups. Two of the three declined to even acknowledge the survey, potentially indicating apathy for veterinary-related topics. Of the one group that did complete the survey, 66% did not object to “veterinary nurse”; however, regardless of whether or not they were opposed to the title change, almost all of the responders incorrectly assumed a veterinary technician’s educational requirements. An analysis of the opposed responses to the nurse title found that the objectors believed technician education was subpar to human nursing and the title was not deserved by veterinary technicians. It suggests that the human nursing profession worries about maintaining the quality of its own title and hopes to avoid misrepresentations.

In the past, other professions, not similar in scope to human nurses, have attempted to claim a “nursing” title. For example, a Christian medical community attempted to title their “spiritual healers” as “nurses”; however, they did not share nearly the same amount of education rigor. When confronted with a potential title change in the veterinary profession, human nurses mistakenly worry that the term “veterinary nurse” will also encompass veterinary assistants. This confusion highlights the need for public awareness of technicians – if the closest human counter-part profession does not understand a technician’s role or certification, how can we expect the general public to know any differently? The veterinary profession must raise awareness to the public about the differences between its assistants and technicians.

Currently, as the veterinary nurse initiative gains a foothold in Ohio, the Ohio Nurses Association and its 170,000 members have fought its new legislation, arguing that the state legally defines the term “nurse” as caring for humans and that no other person or profession may insinuate that they practice as a nurse. With similar nurse title protection in about 24 other states, the veterinary nurse initiative is likely in for its fair share of conflict as it continues to grow.

The debate over the title of veterinary technicians remains controversial both in and outside of the veterinary community. As with any impending change, it is important to recognize its potential benefits and shortcomings in order to formulate the best strategy to improve the profession. If the Veterinary Nurse Initiative ends up being successful, the change will likely empower today’s veterinary technicians and reduce the profession’s current high turnover rates.

 

Modern Mentoring: How Mentoring Has Evolved and 7 Keys to a Good Program

Originally Published in Today’s Veterinary Business October 2018

Although mentoring is not a new concept in the workplace, modern partnerships are not necessarily like those in the past. According to HR Magazine, formal mentoring relationships in previous eras would have typically lasted at least a year. Informal ones? They could last a decade. In today’s workforce, though, these relationships are often shorter and more specialty-oriented than before.

Because of this shortened timeframe and accelerated pace, lines between mentoring and coaching can be blurred. Increasingly, mentors are no longer necessarily higher on a company’s organizational chart. In fact, reverse-mentoring now exists. In reverse-mentoring situations, newer staff members are teaching older, more experienced ones about new technology, as just one example. As one scenario, a Millennial employee may be teaching her Baby Boomer supervisor about how to effectively use social media and crowdsourcing, while also sharing insights into new ways of thinking about business.

According to a survey taken by the Association for Talent Development in 2017, 29 percent of organizations have a formal program in place for mentoring, with 37 percent of them having an informal one. Mentoring opportunities are also available through professional organizations, either online or in person.

A skilled mentor can help the mentee become his or her best possible self. This happens when a mentor takes the time to really understand the person he or she is mentoring, including where the person is in a career path – and where he or she wants to go, career-wise. Once this is discerned, then each of the actions by the mentors should help the mentees participate in the types of behaviors that allow them to become aligned with their own best selves.

Now, here are seven keys to creating the best possible mentor/mentee relationship.

Key #1 Be very clear about the goals established for the mentoring program.

Are there specific job-related skills that the mentee needs to gain? If so, what are they? Is the mentor guiding someone to an understanding of a practice’s culture? Perhaps the mentee worked for a private practice that was recently bought out by a corporate one, and the mentor is serving as a guide and sounding board to an employee during a transition period. Whatever the goals are, make sure they are clearly defined and understood by all involved parties.

Key #2 Make sure the two participants are well matched.

Synergy and mutual commitment fuel mentoring relationships, so it’s crucial to put the right pairs together. As mentioned above, mentoring is no longer limited to an older and/or more experienced person at the practice mentoring someone younger and/or newer. The goal of this evolving process is to have one member of the team fill in gaps of the skills and/or experiences of another employee, so form your pairings for that purpose. It can be tempting to put together people because they’re so much alike that they’re sure to get along. They probably will get along, but that alone doesn’t fulfill the purpose of mentoring. Remember: fill in experience and skillsets through mentoring opportunities at your practice.

Key #3 Mentoring usually takes significant time and energy, so don’t expect quick results.

There are exceptions to this rule, of course. If a Millennial is paired up with a Baby Boomer to teach the use of Instagram, this can all come together rapidly. If, though, that same Millennial is paired up with that same Baby Boomer to help transition the mentee to a telecommuting role at the practice, this can take time and energy for mindsets to evolve.

Key #4 Multiple mentors sometimes make sense.

Some companies pair up a mentee with a primary mentor and are then open to people having numerous more informal mentors to boost the diversity of the learning experience. It can be very helpful, even enlightening, to have mentors from different demographics – whether that’s age, gender or something else. Being exposed to different points of view from thoughtful members of the practice can be quite beneficial.

Key #5 Mentors should provide guidance rather than setting strict requirements.

Your practice will create an overall structure for its mentorship program and, yes, participants should follow the structure you set. But, a mentor is not there to enforce rules or to lecture. Rather, a quality mentor may spend more time asking questions and listening to answers than speaking, offering advice rather than rock-solid answers. Mentees should be encouraged to listen closely to what a mentor has to say and then carefully evaluate how it fits into his or her life and career path.

Key #6 Mentees should prepare and ask questions.

The best mentoring relationships are two-way streets, with the mentee being an active partner in the relationship. Passive listening will only go so far in helping a mentee develop skills and gain knowledge. Instead, engaged mentees should share what has been helpful, what gaps exist in his or her knowledge base and skill sets, and so forth. In a sense, being mentored should also empower the mentee to pass on knowledge to the next person in the practice who needs assistance.

Key #7 Effective mentoring focuses on relationship development.

Near the beginning of this article, we shared how modern mentoring resembles coaching, at least more so than in the past. But, at its core, mentoring has been and should remain relationship-oriented. The mentee should feel safe and nurtured as he or she learns professional skills through mentoring. Although this knowledge will likely enhance the mentee’s ability to perform tasks, mentoring is not as task-oriented as coaching.

Mentoring should help employees at your practice become more self-confident and able to juggle his or her work/life balance. While coaching can be performance-driven, mentoring focuses on developing the employee, both to improve his or her skills and knowledge today and to prepare him or her better for the future.

Starting a Mentoring Program at Your Practice

Be very clear about what you want to achieve through this program and have a plan in place to measure its effectiveness. Determine who can participate, both as mentors and as mentees. Can someone, for example, volunteer or will you select them? Decide how formal or informal the program will be, how often you expect partners to meet and so forth. Explain the program to your team, adding specifics to the employee manual, and strategically pair up mentors and mentees. Invest enough resources to allow the program to be successful, be available to mentors if they need guidance, and use this program to develop your team in a way that dovetails with practice goals and dreams.

Link to the article on Today’s Veterinary Business: https://todaysveterinarybusiness.com/modern-mentoring/

Residency Retention Agreements

Finding the right resident for your practice is a lot of time and work.  Protect your investment and keep your resident from straying to other practices by including proper retention provisions in your residency agreements.

The basic bargain you make with your resident is simple: you agree to pay all or part of your resident’s training and residency living expenses; and your resident agrees to work at your practice for a minimum period—the “retention period”– after  she is board certified.

To implement this bargain, residency provisions typically use a stick and/or carrot approach.  The stick requires your resident to pay back the residency expenses you fronted if she fails to timely pass her residency or if she leaves your practice before the agreed upon retention period expires.  The carrot, which is optional, pays your resident a bonus at the end of the retention period.

Here’s a list of the principal issues your residency provisions should address, bearing in mind that the main variable affecting their structure and content is whether or not the residency will be in-house.

  1. Residency Rules.  If you are sponsoring the residency, both you and the resident should agree to respectively follow the residency rules and guidelines set by the applicable veterinary college (“Residency Rules”).  Accordingly, you would be prudent to ensure that compliance with Residency Rules will not unduly burden your practice before you commit to sponsoring the residency.  The residency provisions should also: (a) require the resident to keep track and inform you of any rule changes; and (b) allow you to terminate the residency without penalty in the unlikely event a rule change makes compliance too burdensome for your practice.
  2. In-House Residencies.  With  in-house residencies, your resident will invariably be your employee during the residency period, so all the usual employee issues relating to compensation and benefits apply.  However, you will need to adjust your standard employment agreement to give your resident time to: (a) complete whatever externships are required by the Residency Rules; and (b) study for her boards.  (In this regard, you may consider reducing her compensation accordingly.)  Do not forget to check that your insurance and benefit plans will cover your resident during this period.
  3. Off-Site Residencies.  If a veterinary school or other hospital is going to sponsor the residency, you need to consider whether you want your resident to be your employee during this time.   If the resident will be attending a veterinary school or other hospital far from your practice, you may not want her to be your employee, since an employer is generally liable for their employees while they are acting within the scope of their employment.  Since you have deeper pockets than your (normally) impecunious resident, plaintiffs will be motivated to sue you if your resident gets into trouble.

If this liability worries you, then you will need to loan your resident the amounts she needs, with the understanding that you will employ her as soon as she is permitted to take the boards (and then forgive the loan at the end of the retention period).

Loaning residency expenses to your resident with an employment agreement to follow will be more complicated to structure, negotiate and document, than simply employing your resident from the outset.  This will take more time and cost more in legal fees.  You will need to balance this increased cost against the risk of incurring liability for your employee’s acts and omissions while a resident.  Such balancing will require weighing various factors, including the extent to which the veterinary school or other institution is liable for their residents and to which  your resident employee will be deemed to be acting within the scope of her employment.  Common sense would indicate that the school or institution should be primarily liable for all resident activities and that the risk of your incurring such liability is remote.  But all bets are off in our sue-happy society.  It may also be possible to cost-effectively insure against any residual liability.  As a precaution, your resident should agree to seek your permission before engaging in any remunerative activity while a resident, (e.g., working at a shelter or temping at an emergency clinic), so that you can evaluate the risk thereof.

Finally, depending upon the residency program’s schedule and how far away it is from your practice, consider whether you want your resident to work for you during week-ends, holidays and/or residency program breaks.

  1. Ensuring Diligence.  Whether or not your resident will be completing her residency at your practice, she should agree to diligently pursue her residency to completion, which will include studying and sitting for the boards as soon as she is permitted to do so. Your resident should commit to become board-certified by a certain deadline (which can be extended for a limited time if your resident becomes disabled).  If the residency program is held off-site, your resident should agree to provide you with adequate documentation to monitor her progress.
  2. Residency Expense Tracking. Your residency provisions will also need to specify the residency expenses for which you will be responsible and how they will be documented and paid.  Consult with your tax advisor to ensure that this is done in a tax efficient manner.
  3. Residency Expense Repayment.  Now for the stick. The residency provisions typically will provide that the resident will repay the residency expenses you have advanced, unless she works at the practice through the end of the agreed upon retention period.  In essence, your resident is “working off” her “debt” to you.  (The “debt” being your advance of residency expenses to her.)  Thus, during the retention period, your former resident’s compensation should be less than market to reflect this “repayment.”

This loan analogy cuts both ways however, because a savvy resident will demand that the repayment obligation be suitably pro-rated, so that if she leaves, say, in the middle of the retention period, she need reimburse only half of the residency expenses.

The provisions should provide for a repayment schedule and an interest rate (or specify that the resident will owe no interest).  In attempting to reduce interest as much as possible or eliminate it all together, a savvy resident will argue that the practice is benefiting from the services of a “captive” specialist, who cannot leave without incurring a substantial reimbursement obligation.   This benefit is above and beyond what an un-affiliated lender would receive, and in consideration for this benefit your practice should not charge interest.  (Be advised, however, that charging below market interest or no interest may subject you to tax liability.)

  1. Disability and Early Termination.  Proper residency provisions must also cover life’s more foreseeable contingencies. The two principal intervening events that should be addressed are disability, and employee termination before the expiration of the retention period.

7.1.  Resident disability generally will extend the deadline for obtaining board certification and also length of the retention period.  If your resident’s disability lasts longer than this extension, she normally would be terminated, just like any other employee subject to long-term disability.  But what about her repayment obligation?  Should she still owe you for the residency expenses you advanced?  If you’re tough you might say yes.  If you’re nicer you might want to forgive your disabled resident’s repayment obligation in whole or in part.  (Note that you might be able to insure against this risk.)

7.2.  What happens if you terminate your resident before the end of the retention period?  If you terminate for the usual “for good cause” reasons, then the resident should still repay you for the residency expenses you advanced.  In this regard, the residency provisions should allow you to terminate your resident “for good cause” if she fails to become board-certified by a specified date.

But if you terminate your resident at your discretion, i.e., for any reason other than “for good cause”, then the provisions should extinguish your resident’s obligation to repay you for the residency expenses.

If your resident leaves before the end of the retention period she will owe you the residency expenses you advanced. That is after all the whole point of having retention provisions in the first place.  But heads up: a savvy resident will require the provisions to address what happens if she terminates her residency agreement because of your breach of that agreement.

  1. Retention Bonus.  If you wish to motivate your resident with a carrot in addition to the stick, the residency provisions can provide that you will pay your resident a specified bonus if she stays through a specified date (which need not coincide with the end of the retention period, and could even be paid periodically in installments).  As with your resident’s obligation to repay residency expenses, the bonus provisions will need to deal with disability and early termination (either implicitly or explicitly).
  2.   Residencies as CLE.  Residency programs at veterinary schools or other institutions can constitute a valuable educational resource for your practice.  Accordingly, do not forget to require your resident to provide copies of all interesting residency documents and give your practice periodic presentations of residency activities.

Like many things in life, residency provisions are simple in concept but complex in implementation.  You will need to invest some time and effort, and incur some expense in preparing a proper residency agreement.  Accordingly, it makes sense to temporarily employ your future resident at your practice before committing to any residency obligation—just to make sure that she is worth the investment.