Article Date: 6/1/2013

Utilize Staffing Ratios
financial foundations

Utilize Staffing Ratios

These numbers can guide your practice’s hiring decisions.

DAVID MILLS, O.D., M.B.A.

images

Most business organizations, including optometric practices, have difficulty determining the amount of staff necessary to deliver efficient, cost-effective service to its customers. Two metrics can be used to help guide the business owner in making proper staffing decisions.

Here, I discuss these metrics.

Annual adjusted gross revenue

Perhaps the simplest method of determining proper staffing ratios is to use the annual adjusted gross revenue as a guide. Using this metric, a business owner would consider having one full-time equivalent employee (FTE) for each $200,000 of income. For example, a practice with an adjusted gross income of $850,000 would typically have four to five FTEs.

Regardless of revenue levels, few optometric practices operate efficiently with fewer than three FTEs.

Revenue per staff hour

Evaluate the adjusted gross income as it relates to the total number of staff hours worked. In this example, we make the assumption that each FTE works 2,000 hours per year. Using the example of an $850,000 practice that has five staff members, the total staff hours per year would be 10,000 hours. Therefore, the revenue per staff hour is $85.00. Employing this metric, consider hiring additional staff members once the revenue per staff hour approaches the $90 range. If you find the average is below $70, you are most likely overstaffed.

Beyond the metrics

The concern with the above methods is that they do not account for differences in staff responsibilities. In most optometric offices, staff members have different job titles and descriptions. Every business owner must be cognizant of how levels of staffing directly affect the ability to deliver efficient, patient-centric care.

Evaluate your practice from the patient’s view. Is there a consistently long wait time for patient check in? Do you hear the phone ring numerous times before a staff person responds? Are you losing potential sales in the optical because your staff feel too overwhelmed by the number of patients waiting? Each patient contact area must be evaluated separately to determine whether the staffing ratio is adequate. Oftentimes, the total number of staff is correct, but the distribution within the office needs reallocation. In this case, you have the option of either changing a staff member’s job description, or replacing the staff member with one better suited for the neglected tasks.

Examine trends

When applying any of these methods in determining staffing levels, it is important to look at trends in your business and not react hastily to any one calculation. Spend the necessary amount of time and effort hiring the “right” person for the job as well as providing proper training. Not only will the practice run more efficiently, but you will find that revenues may increase. It is well worth the added training expense if you realize an increase in revenues.

If you find you have hired the “wrong” person, make a change before your office culture becomes toxic. The ultimate goal is to create a staff that works efficiently and productively and creates the office culture you wish to project to your patients. OM

DR. MILLS, SENIOR PARTNER AT OCEAN STATE EYE CARE IN WARWICK, R.I., HOLDS A M.B.A. FROM PROVIDENCE COLLEGE. E-MAIL HIM AT MILLSD@NECO.EDU, OR SEND COMMENTS TO OPTOMETRICMANAGEMENT@GMAIL.COM.



Optometric Management, Volume: 48 , Issue: June 2013, page(s): 76