It’s remarkable how the Pandemic Era has impacted workforce and workplace thinking, and likely nowhere more considerably than how workers are valuing employee benefits. In my decades of colleague and practice team interactions, I don’t know that I’ve witnessed a more pronounced and more rapid evolution in thinking.
It’s no surprise to any practice owner anywhere in the country (or world) that landing and keeping great team members is more challenging today than ever. And I mean literally EVER. We’ve talked about and strategized on these challenges a great deal these past three years in the podlectures and blog posts and have tried always to bring the real-time narrative to light in these conversations as we work individually and collectively to rise-up accordingly. That said, it seems a right time to reveal and discuss a couple of specifically recognizable developing trends within the broader benefits conversation as we talk with colleagues in recent weeks and months.
First, health care benefits. It’s a decades-long trend that Americans view health-care coverage as a at least a partial responsibility of their employer, but this is showing itself more and more as a make-or-break consideration for workers in the post-pandemic world.
There are a number of identifiable contributing factors here, the most impactful being employers who have for years (plural) now since the start of the Pandemic given full chase to wage inflation that started with and has perpetuated during the Pandemic. With fewer people having to work or go somewhere to work to get the bills paid, bricks and mortar employers simply had to pay more and do so abruptly to an extent we’ve rarely if ever seen before. People willing to remain in our workforce were able to command more compensation, and it became harder and harder to outbid the barrage of suitors of our employees.
Relative to wage increase history, this all happened fast and ratcheted quickly, and in the aftermath, employers are turning more and more to “other than cash” strategies to recruit employees. A major emphasis of this trend is increased coverage by employers of the expense of healthcare, and many colleagues reading this are experiencing this as a deal maker or breaker as we speak.
Another factor we’re seeing with this one is single-parent households. In short, where many workers in the past had dual-income families and could look to the “big employer spouse” for health benefits, many households in our day-and-age are single-parent households relying on that single parent for health coverage. This of course often includes our employees.
It’s often helpful as we consider applications in our practices to consider close-to-home examples of things we discuss in the blog posts. Glad to share one such in these excerpts from a recent HELP DESK conversation with a partner colleague.
Colleague: We’d really appreciate your input on whether or not we need to consider changing our benefits policy and covering full health benefits for employees.
We have two employee situations here. One is now responsible for paying for her family’s health coverage and would now have to cover being on our practice insurance plan. She is unable to afford her share of the payment, and we expect that she’ll be giving her notice shortly.
Another just informed us today she’s leaving for a job that offers full health coverage, as well as an increase in compensation.
It is increasingly difficult to retain employees, and it may be time for us to revisit our benefits program and make some changes. All the work and expense that goes into recruiting, hiring and training employees goes up in smoke every time this happens.
THRIVE: This is exactly the time to revisit our benefits. If we’re going to retain team members, we’re going to need to be as innovative and competitive as possible with not only paid compensation, but our full array and extent of benefits as well. A few months back, we conducted a full team survey for a client with a really big staff regarding how they value and even had them rank all the practice benefits. It was revealing and helpful, including appreciation by the staff that we would invite their opinions on this and allow that input to impact.
This is important enough to some employees that they’ll not only switch jobs to achieve coverage, but even uproot and more their families to do so. The fact that we’re seeing more and more of this says a lot about the need for certain inclusions in and for people’s lives and therefore the extent to which they actively seek (and these days can achieve) employment that offers what they seek. It’s obviously difficult for us as small businesses to compete with big employers, but it seems more and more that full health coverage is a deal breaker in retaining team members, and in more and more cases, we need to find a way to provide this.
Part of the difficulty, of course, is that if we provide one or both of these employees with full coverage in an effort to keep them, the reality is this eventually becomes an offering to all employees. As we see more of this trend, more small businesses (including colleague practices) are needing to go to this kind of benefit coverage, which of course means a substantial increase in labor cost. This of course in turn means we either settle for lower margins or off-set this added expense by cutting other expenses and/or increasing revenues and the margins from those revenues accordingly. But the reality of the times is it may be, and for some colleagues is, time to shift some paradigms and find a way.
It's the classic darned if we don’t and darned if we do situation, right? And such situations require one thing from leadership above all others – innovative and even FULL-ON PARAGIGM SHIFTING thinking.
Well can you give us an example of that kind of thinking, Tom? You bet, and glad to do so involving a client right here close to home.
Having purchased a retiring colleague’s practices a number of years back, this client’s practice growth plan has specifically involved growing the young adult segment of his practice, even including expansion into not one but TWO additional locations to support the “mother ship,” which he modeled very specifically after the innovative space utilization mentality of Apple Stores. It actually feels like you’re walking into an Apple Store, which doesn’t necessarily do it for me, but it sure does for a lot of younger patients. The strategy has worked beautifully not only to evolve the patient base by design (exactly the topic of the last Podlecture – Patient Base By Design), but also to reduce our cost of space with a much less space-demanding plan for patient care, operations and staffing. It’s been really interesting to see how these less demanded resources have worked together to produce a much more profitable form of operation. Innovative thinking, right?
That all said, and productive as this has been and continues in deliberately morphing this practice and patient base by design, this colleague is one not only to recognize a trend, but to act innovatively and swiftly in response (I just walked the ever-sobering experience of walking the Battlefield at Gettysburg over the weekend while speaking at the Optometry’s Meeting in D.C., and I can’t help thinking this colleague would be very effective leading troops in such a situation). That tendency has kicked in yet again, this time, in recognizing the need to reduce overall costs to increase compensation and benefits per team member.
So what does that look like? Well after years of being in expanding locations mode, which has very well served it’s patient base by design purpose, recognizing a need to reduce overall expenses in some places and increase them in others, we’ve changed (rapidly and decisively, I will add) to consolidation mode. IN Within two months of making a decision, this colleague and his team consolidated the third location (which is crushing it) into the second location (which was doing just fine), and now it’s the Mother Ship office in one location serving an identifiably particular patient base and one other location serving an equally identifiable patient base, while dramatically reducing overall occupancy expense (cutting out a full location of expenses – can you imagine??) AND overall labor expense (reducing in total by one doctor and two employees). And here’s the kicker. …wait for it…wait for it… total production is UP OVER 20 PERCENT!! You read it right! Even if production were down 20 percent, overall margin given the changes in expenses would have been up (as would have been compensation/benefits per team member), but production is actually up 20% in the 2.5 months since moving. Can you imagine what is happening with margin?
And what of the patients, you ask? They’re totally fine with it. A bit more driving for some, but it’s remarkable given where this colleague had targeted growth geographically in the city how most of these young adult patient didn’t bat an eye. They get it. We’ve carefully managed patient perceptions of this this, and it totally makes sense to them. They know what (including RELATIONSHIP as well as services and products) and how they want to be consumers of that, and they simply go about that in the now more efficient than ever one location. It’s been an incredibly eye-opening experience to say the very least, and I admire the innovation and willingness by this colleague turn in a great way on a dime.
Like all THRIVE content, the purpose of BOWEN’S BLOG and SUMMIT TALK Podlecture conversations is to keep us driving together toward IMPACT. If something here has struck a chord, shoot us an email or give us a call and let’s talk it out! Tbowen@mythrivecoaches.com or 402-794-4064.