Optometric Management Tip # 215   -   Wednesday, March 01, 2006
Odds Are Good That You’re Understaffed

I think most eye care practices are understaffed if the goal is to produce optimum net income for the owners. That is a bold generalization, but go with me for a moment.

Reasons many doctors remain understaffed

There are three major factors that lull doctors, practice owners and managers into believing they are making the right decision about their number of staff.
  1. The payroll expense category in the practice already seems too high, and hiring another employee will only drive it higher. We read and hear that the norm for staff compensation in optometry is about 17 to 19% of gross revenue and it is increasingly difficult to stay in that range.

  2. It seems like the practice can’t find qualified employees.

  3. The practice is not that busy, so hiring another employee will only take away from the bottom line.
I find that all three of these lines of reason have major flaws, which will get into later in this article.

Another employee can jump-start productivity

It’s ironic, but hiring an additional staff person before it is apparent that one is needed can actually jump-start a slow practice. It seems like that would be the opposite of what one should do in that situation, but the opposite of what you think often works! After all, how well has “what you think” been working (semi-kidding)?

Here is why hiring another employee is often a good idea for business: Reviewing the three factors

Here is why the hiring concerns I mentioned above are often not valid:
  1. A payroll expense category of 17 to 19% is the typical average when we survey optometric practices; it doesn’t make it right or desirable. More importantly than that, the percentage very likely will not increase if you hire another staff member! The reason is that gross revenue will very likely increase much more than the wages of the employee. Calculate how much a typical employee earns in eight hours. It’s pretty easy to make that up in gross revenue.

  2. Finding great staff people can be challenging, but I often find doctors give up much too easily. If finding another employee is good for your practice and good for your net income, then we just have to work at it. Quite often, a doctor will tell me she would like to hire another employee, but can’t find anyone. At that point I’ll ask the doc if she is running a help wanted ad in the local paper right now. The answer is almost always no. I don’t get that. If I decide that my practice needs another employee, I run an ad until the position is filled. There are many other ways to find staff also – but an ad is basic! That brings up a good side point. I just ran an ad for an ophthalmic technician and the cost of the ad was $650 per week. That is a lot more than a classified ad would cost if you wanted to sell something – but that is the marketplace. I would not avoid an employment ad just because it seems expensive. I say bite the bullet and run the ad and find the employee! I found a great new tech with excellent training and experience. One more point: if you really can’t find any good staff and you have really tried, it means you need to pay more.

  3. The final concern was about the payroll expense taking away from the profit because the practice is not busy enough. The section above about jump-starting covered that pretty well. The increased productivity and service more than covers the additional cost. Remember that the payroll expense of one additional employee is really not that large and it is spread out over time. You’ll have time to overcome the cost.

Best wishes for continued success,

Neil B. Gailmard, OD, MBA, FAAO
Chief Optometric Editor, Optometric Management