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Thoughts from our President on the State of the Economy and Staffing In the Medical Industry

Categories: Blog,Medical Staffing,Medical Training,Practice Management

For Doctors throughout the USA, the Economy is Backinvest picture

Let’s begin with 3 percentages.  In May of 2007, according to the Bureau of Labor Statistics, the unemployment rate was an impressively low 4.4%.  By October of 2009, that number grew to 10%. As of June, 2015, 8 years later, our current unemployment rate is at 5.3%, on par with 2005 averages.

Next let’s talk about feelings versus facts. I regularly speak to doctors who feel the economy is still terrible and feel
they cannot raise prices or grow.  The facts show, however, that if you are an elective specialist (plastic surgeon, refractive or cataract surgeon, orthodontist, or similar) or for that matter an ENT or dermatologist, that the economy is back, and at a minimum, if you take the right actions you can be growing in the current environment.

I have heard myriad anecdotal thoughts on why this may not be true:

–          Many people simply gave up and didn’t re-enter the work force (but these are not typically our patients and look at our client results)

–          There are many cities still struggling (true, but not as badly as 6 years ago so we should still be up over that time period. Also, look at our client results in depressed markets – they are way up)

–          People are shell-shocked and afraid to spend fearing another bubble (and yet our average YellowTelescope Long-Term Oversight client is on pace for $515,000 in annual growth and over 95% of the months across all of our clientele are growth months over the same time a year prior.)

So I cannot say that everybody is growing, nor that growth is easy. I’d also concede that things are not as great now as they were just prior to the stock market crash.  What I can say is that “these are the good ‘ol days,” and “the sun shines so let’s make hay.”

For physicians, staffing is tougher the more money you are making

Let me tell you a true story that would not have happened 1, or 3, or 5 years ago.  We have a client in the northeast. They needed a new manager. We collected around 75 resumes, narrowed the field to 8 finalists, performing initial interviews and narrowed the field to 3 last candidates for the position.  One was absolutely an A+ candidate. We scheduled her for an interview a couple of weeks later and I told the doctor “you are going to hire her – she is the winner. You will see. I just hope she is on the market in 2 weeks.” Within a few days she emailed us and stated:

“I wanted to let you know that I received a job offer from another company, but I am still very interested in the opportunity…I need to get back to the other company by early next week with my decision. You had mentioned that in-person interviews would be scheduled for August 3, but I was wondering if perhaps I could meet sooner given my time restrictions. With my experience and skill set, I feel that the job would be a great fit for me and I don’t want to miss the chance to meet him.”

Our position was paying around $60k plus bonus and her offer was as she stated:Practice Growth - The Many Misdemeanors of Management

–           “Salary: $90K

–          Bonus: 10%+ more if exceeding goals”

I contacted the individual, confirmed she was willing to take less for our opportunity as it was closer to home, matched her ultimate goals, and enjoyed the idea of working with the doctor and our team.  If I do say so myself, I “recruited her” using my experience of placing thousands of people and interviewing tens of thousands over nearly 20 years. I was honest, didn’t sugar coat, but painted the picture of why we were the best option – from YellowTelescope training which so few doctors have the luxury to afford, to a great team, to exciting and varied work, why do the grind at a billion dollar company to make 20 grand more when you can thrive and grow here?  This was all on a Sunday while I was on vacation (thanks, honey, for putting up with getting in the pool with the baby later than I wanted). By Monday morning at 8am we had the candidate in front of the doctor. He loved her as did his wife and the rest of the management team. Everybody was impressed. By that night we had an offer put together. By Thursday night, references were checked, the offer was accepted and the doctor got his winning candidate, and the winning candidate got her dream job for around 25% more than we hoped to pay but accepted less money than her other offer for the right fit. It was a busy week.

Healthcare Staffing Solutions are Constantly Changing, and Currently are Becoming more Challenging

Our team at YellowTelescope had a multitude of takeaways as this is no longer the exception to the rule but the new normal in medical and healthcare staffing.   Here are a few of those with real life examples:

1.       Most good people have excellent jobs already. This means quality resumes are out there, but much tougher to find. While YellowTelescope is the industry’s only true staffing agency providing training, if you do choose to fill a higher-level position on your own, make sure you truly understand where and how to find exceptional resumes. As what the kids are calling a “humble brag” these days, we don’t mean to sound arrogant, but surgeons train for 33 years to be able to cut a body open, similarly, our team was spending a combined 70 years staring at resumes, conducting tens of thousands of interviews, working at multi-billion dollars staffing agencies and growing some of the largest medical practices in the country while finding fits for healthcare and practice management positions most doctors could often only dream of.

2.       If you do receive a truly impressive resume, expect to pay more. What we have seen on our last dozen staffing projects is that we are able to fill the job at rates similar to a few years ago about a quarter of the time, at rates 10-25% more than a few years ago about a quarter of the time, and around half the time candidates are demanding 30-100% more than in the past and are receiving it due to a dearth of qualified people on the market.  We do our best to ensure our clients pay fairly – underpaying leads to early exits as employees find better jobs, and overpaying is bad business. With that said, what “fair pay” means today is different than even 3 months ago. We used to be able to place patient coordinators for 35k plus commission (Say 2-3% sales). That is rare today – most demand 40-70k base pay with immediate commission and upside. If you are not paying your management and patient coordination team well, do not be surprised when they give you notice after 10 years as earning 20-100% more for the same job is very much possible in this economy. I once had a prominent doctor email me that he was concerned his own team might find out what others earn in the industry.  My answer was that I do think it is important to realize that what a person in NYC or Beverly Hills earns in sales for a plastic surgeon is going to be more than in Boise which will be more than in Tijuana, Mexico. If he is that worried, he likely should give them a raise or at least institute an incentive so when he grows so do they.

3.       If you want excellence, you’ll pay more or wait a long time.  In one of our west coast markets we have been working on filling a practice manager position for the better part of a year (we average filling a job in about 6-8 weeks). There is no end in sight.  The doctor has stuck to budgets, will not cut corners, and so has waited to find the “nearly perfect fit.” This is not a mistake nor a good idea – it is a choice and we respect a doctor’s decision, so long as they respect what they lose by taking a long time or not settling. In our estimation having nobody in the practice manager role costs the doctor between $100,000 and $500,000 per year. Turnover has been rampant, 2000 hours of work per year are lost, and there is a lack of true leadership in the practice. We’d recommend picking somebody.  In another Midwestern market, we have spent around 10 months filling a practice manager job. In that case, we have found 4 superb people, made offers to all 4 and lost each one for different reasons ranging from two getting other, better offers, to a 3rd disappearing at the background check, and the 4th having a potential problem on her record as well. That’s right, 2 out of 4 senior level practice manager candidates in a job that may offer six figures a year have a police record that may jeopardize their employment!!! This might give you an idea of how few good people are out there. Yes, in many cases, we fill jobs fast. As noted above, we filled the position we outlined in just a couple of weeks and we always save the doctor time and energy, but if you want excellent get ready for the “new normal” of our current economy.

Keep Your Best People While You Still Can – Top Medical Staffing Companies are Coming for Them

job search keyboard

This year our clients have seen an existing manager leave to make $30,000/year more at a new job, patient coordinators leave on maternity leave, teams grow necessitating new staff. And in one case, we let a client know we believed his office manager and his patient coordinator would disappear in under 6 weeks. The doctor did not act as we didn’t quite know why we “just had a feeling” based on our experience. By 4 weeks later both had left for bigger and better opportunities in their eyes.  Five years ago it didn’t matter how you treated your people as there was nowhere to go. It didn’t matter if your pay was competitive as there were no jobs, if you had a pre-existing condition you could never leave your insurance, and the general fear was palpable in America.  And just as doctors hang on to the feeling that the Great Recession is still upon us, when it has been gone for the better part of a decade, they also hang on to the idea that they can pay whatever they want and treat people how they wish and still grow.  The future of independent medical practice growth, and for that matter hospital and university growth, will depend on creating exciting and high-quality opportunities that offer better than average pay with superb management. Healthcare staffing will only get tougher in the near future and will eventually get easier as economies cycle. Now is the time to make money as people are spending which may mean paying a little more to retain or grow your team, or settling for a “diamond in the rough” who needs a little more training instead of a “full cup” who looks ok on paper but has no capacity for growth or learning.

YellowTelescope is currently booked fully with staffing projects until late October (another side effect of the economy growing and staffing being more difficult is that doctors admit they need help, though we also hope it is because of the quality of our work  – in company history, nobody we have placed has ever quit). If you’d like to use our services, please contact us immediately and get on our docket for late year or early 2016 whether you seek overall training, or training with staffing services.  We can be reached through our yellowtelescope.com website or at info@yellowtelescope.com.