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Mysteries of Fair Compensation
It would be so simple if practice owners could open a fortune cookie for each one of their employees and find the method by which to fairly compensate them. While there are commonly accepted methods of compensation, their implementation in veterinary practices varies because different entrepreneurs have different business goals. Also, "fairness" is a relative term that introduces variability into an equation that might otherwise be consistent from practice to practice. This article describes the factors that practice owners should consider when determining compensation for veterinarians and paraprofessional staff. Part I of this article discusses the use of financial benchmarks while Part II explores how motivational theory can inform compensation decisions.
Veterinary Compensation
Many periodicals and books discuss the factors one should consider in establishing a compensation policy for veterinarians. Of particular importance is the question of whether compensation should consist of a fixed salary, a percentage of the revenue generated by the veterinarian and collected by the practice (i.e., commission-based), or a combination of the two. If a commission-based component is present, it is also important to consider how the revenue figure will be calculated. Will it be limited to revenues generated from professional services, or will it include revenues generated from items like over-the-counter medications and foods? Percentages can also vary in relation to the magnitude of the revenue number that is generated. Implementing compensation systems in practice requires attention to the details of production calculation and timing of payment. The key to remember is there is NO one size fits all when determining the appropriate compensation for veterinary and non-veterinary staff. There are numerous factors that go into assessing the actual method used for compensation, which often requires the assistance of an advisor.
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Veterinary Innovation Council Seeks
Nominations
The Veterinary Innovation Council's Innovation Awards (VIC Awards) is positioned to be an annual program that is designed to take a look back and recognize those people and organizations who have dedicated themselves to the betterment of the animal health industry through innovations that make a difference in the lives of animals everywhere.
The Veterinary Innovation Council (VIC) believes that this recognition is best positioned from a grassroots level and fosters the spirit of Community that is so prevalent within the profession. With that in mind, the nominees will be crowdsourced with all members of the veterinary healthcare profession being able to nominate the people, organizations, product, practices and services that have made a difference in how they practice veterinary medicine. Nominations will include how these innovations helped animals thrive as well as the overall business impact including how the business of animal health has become more efficient, accessible or viable as a result of the innovation.
Nominations open in February 2017 and close on May 1, 2017. Final voting begins on July 1, 2017 and will close on September 30, 2017. The winners will receive their awards at the NAVC Conference 2018.
There is no cost to nominate an individual or organization.
You must be a member of the animal health profession to nominate an individual or organization.
You can nominate as many individuals or organizations as you feel are deserving of an award.
Individual award recipients must be alive at the time of nomination.
Comprehensive award nominations will be viewed favorably. Supporting documentation and video files uploaded to demonstrate both the innovation and its impact are encouraged.
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The State of Student Debt
The student debt load has been a longstanding and progressive problem within the veterinary field. Total student loan debt from veterinary school for graduates from the class of 2015 was $427,502,116.00, while the average debt accrued per student was $142,394.
6 Research conducted at the University of Minnesota found a 67% increase, adjusted for inflation using the Consumer Price Index, in veterinary student debt from 2003 to 2013.
14 Although there has been an increase in new graduate salaries over this same time period, the increase in salaries has been far slower than increases in student loan debt. As a matter of fact, when adjusting for inflation, the mean starting salaries have actually decreased over this 10-year span.
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While the crude numbers of student debt can be somewhat alarming, they do not accurately depict the true state of debt unless they are interpreted in relation to other economic factors. The state of student debt is best assessed when comparing the debt to its pay-offs, i.e. income. This growing difference between mean educational debt at graduation and mean starting salary started to noticeably accelerate by 2005.18 The mean starting salary for veterinarians in 2015 was $72,229.7 The American Veterinary Medical Association, AVMA, measures this trend using the debt to income ratio ("DIR"). The DIR is a marker for economic performance of the market for veterinary education and for economics of the entire profession as a whole by tracking trends in student debt and average starting salaries. The average DIR for new veterinarians across all sectors of practice in 2015 was 1.99 to 1. This almost 2 to 1 ratio means that students, on average, have two times the amount of debt compared to what they are making, which is both unhealthy and unsustainable.
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AVMA Seeks Your Opinion on Telemedicine
The Practice AP's final report on telemedicine has been
posted online
, and that AVMA seeks opinions on it, especially the recommendation involving the Model Veterinary Practice Act and the policy on Remote Consulting. A summary for the recommendations impacting both of these policies starts on page 37 of the report. For more detail, including a link to the report and how to submit comments, visit the AVMA@Work blog,
AVMA seeks your opinions on telemedicine recommendations. Comments are due before March 16
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