Payroll can be a large expense for your practice, possibly up to 70% of your overhead. So it’s important to understand what your ideal salary levels should be for your team members in order to maintain your practice’s profitability.
That being said, you want to make sure your salary levels are still competitive. Competitive salaries and pay rates are crucial for developing a productive, successful and happy team. In addition to the right salary or hourly pay, this can also include high-value benefits such as comprehensive health insurance or regular bonuses. Factors like location, economic conditions and the number of applicants for a position can all influence the exact value of competitive pay.
The right competitive pay level can have several short-term and long-term benefits for your practice. If top candidates have several job options, offering a premium level of pay can help you stand out and grab their attention. The right pay will help you set the right culture as well. Team members will see that you value their contributions, which will strengthen their commitment. This will also limit team member turnover.
Competitive pay can mean different hourly rates or yearly salaries depending on the role. Consider these tips when deciding on a fair competitive rate for a position in your practice:
Research Your Local Area
The demand for certain positions and skills can be different depending on your location, so investigate what pay rates are being given to similar roles in your area by viewing job boards and other employment sites. As mentioned, factors like cost of living and other economic factors in your specific area can impact this average number. If you want to attract the best candidates, you will have to at least match what competitors are offering.
Determine What Your Priorities Are
What are your main financial goals with your practice? If staying within a set budget is a goal, factor that into the pay rate or salary you’re willing to offer. Or if you have the budget to offer more flexible pay levels, decide the range you want to stay in. Calculate how much you can afford to spend to help set a rate that makes sense for your practice growth.
Consider the Candidate’s Experience
If a candidate has a higher level of experience and expertise, they are likely going to expect a higher level of salary or pay. If you are hiring for an entry-level position, competitive pay may be a relatively standard hourly rate across the industry, but senior positions can have a much wider range for what a competitive salary could be. Many job postings use the phrase DOE, meaning “depending on experience” when discussing the salary range.
Think About Benefits
In addition to the pay or salary, your competitive compensation package will also need to include benefits, insurance, bonuses, etc. These can all make your position sound more appealing to candidates. Look at what types of compensation are popular in the industry and choose benefits that add the greatest value to your team while also fitting into your financial priorities.
If you want to learn more about the human resource and payroll resources we offer, we’re always a phone call or click away. Schedule a consultation with one of our practice management experts today!