Tanja Yardley, B.Sc.P.T
If you own a physiotherapy clinic, you’ve probably spent a fair amount of time thinking what would happen if your physiotherapists were to leave you and start up their own practice across the street.
Or your sleepless nights thinking about your upcoming contract renewal with your superstar physiotherapist.
The contract negotiation phase is often the most discomforting part of the hiring process for a variety of reasons.
Figuring out what we want and need as employers is hard enough; seeing into the mind and heart of the person sitting across from you to determine what is meaningful to them is even more daunting. Today I wanted to share with you 3 easy tips on how to negotiate your next contract renewal with your physiotherapist your practice.
I like to think about the process in the same way that I think about a dinner party with friends.
Employee vs Contractor
Self serve at the counter versus sit down waiter-style.
Though many private practice PT’s are working as contractors or associates, it is important to know that there are certain criteria that must be met to legally qualify for this option. To familiarize yourself with the criteria, visit the CPA and PPD websites to look at the discussion documents relating to this topic. The CPA also has an excellent contract template for this purpose. Many private practice PT’s choose to work instead as employees.
In a nutshell, self employed contractors often take home more of their income, but have to deal with other hassles such as business licenses and registration, calculating income taxes and navigating the CCRA rules while missing out on some of the “perks” that employees are eligible for.
The process of incorporation helps to minimize some of the challenges, but results in another layer of complexity and an additional tax return. The ability to pay lower corporate versus personal income taxes and more control over holidays often offsets the additional work required and the ability to write off some of your self-employment expenses is also beneficial.
Employees often sacrifice a bit of the “take-home pay” due to various payroll deductions, but they get a solid Canadian Pension Plan contribution, access to paid stat holidays, vacation pay, EI and maternity benefits as well as other perks that the employers may choose to offer (education, sick days, etc.)
Remuneration Type
What do I serve on the plate and how much?
Consider the pros and cons of an hourly wage, a salary, a commission (essentially a fee split) or a flat fee for service model. It depends on the nature of the work, the predictability of referrals and the financial needs of both parties.
Hourly wages can be restricting if referral volumes fluctuate significantly; they work well for group program work.
Salaries work well if you want to have predictable costs over the course of a year; they are less advantageous if business fluctuates considerably as you may be stuck with a high salary during extended low volume/low revenue periods.
Commission or fee split models help you to adjust your manpower costs in relation to revenues, but ensure raises for individuals who may or may not be performing according to your expectations. Fee for service models work well if you want the flexibility to reward performance and simultaneously have your costs adjust to marketplace fluctuations.
Additional Perks & Benefits
What condiments and spices would make it even better?
When you have come this far, the goal is not merely to employ the individual; there must also be a focus on having a successful long-term relationship.
The hidden costs of turnover are far greater than you think.
This juncture in the negotiations should call upon the information that you gathered in the interview process. Consider what phase of life the applicant is in. New grads often appreciate mentorship or educational opportunities in the form of an assigned mentor, an education allowance, graduated payments or a signing bonus to help with their student loans. Individuals who are relocating often appreciate some help with moving expenses or finding accommodation. Parents often appreciate flexibility around scheduling or additional time off coinciding with the school calendar. Senior PT’s often appreciate acknowledgment for their teaching abilities or the opportunity to participate in research or advanced training.
There is no “recipe” for success, merely ingredients that you can mix and match to create something that simultaneously appeals to the senses and satisfies a hunger. Bon appétit!
I hope you’re able to use these techniques to take your practice to the next level. If you liked this post and want to hear more about ways to grow your practices, go ahead and subscribe to our Private Practice Division Blog. Don’t worry: we hate spam just as much as you do. Nothing but useful, interesting information that we know you’re going to love.
