As co-president of a large orthopaedic private practice, our shareholders are quick to remind me about the importance of decreasing our company’s overhead expenses. One of the largest overhead expenses that a private orthopaedic practice encounters are personnel costs, and ours is no exception. Our personnel costs make up 56% of our total expenses exclusive of the physician shareholders—a serious amount of money that must be managed wisely.
How can orthopaedic private practices limit personnel expenses? Hire the right people, get them engaged in the mission, and give them a reason to stay. Although this answer might fit on a bumper sticker, I can attest that those three tasks are incredibly difficult to accomplish. Beyond the hassle and stress involved, the cost of losing an entry-level employee can equal one-quarter of his or her annual salary . This cost can increase up to five times the annual salary for management personnel . Our practice has more than 1000 employees; we’ve inevitably made some bad hires, and we’ve seen some quick exits. But practices that are serious about lowering their overhead costs embrace employee retention and engagement practices and, more importantly, learn from their mistakes.
Here are six best practices that can help reduce employee turnover and potentially decrease the personnel expenses of the practice.
Establish a Positive Culture Through Effective Onboarding
Ensuring that employees’ initial introduction to the practice is a quality experience is a critical step often ignored by private practices. The practice should be prepared to establish a positive office culture on each employee’s first day. We have adopted a thorough onboarding process that explains the practice’s culture and expectations of high-quality, compassionate care. The onboarding process takes two full work weeks—10 days—and includes an extensive deep dive into our practice’s culture, computer system training, compliance, and shadowing, which we found to be an effective part of the onboarding process as it shows the new employee how his or her job impacts everyone else’s tasks. An additional benefit to shadowing is that the new employee starts to interact with other colleagues that he or she would not necessarily meet, increasing camaraderie and a sense of community.
Invest in Your Next Crop of Leaders
The physician leadership of our company realized that our practice would languish regardless of executive effort if we did not develop middle-level leaders. You can only develop these individuals if you keep them around. That’s why despite our shareholders’ requests to lower our overhead, we recently increased the compensation packages for our front-line employees to remain competitive against other private practices in our area. Practices that do not invest in the development of leadership are incapable of transformation since effective improvement requires engagement through the entire spectrum of the organization. Beyond simply offering better compensation, we developed quarterly meetings focusing on practical skills that we deem critical to the success of our nonphysician leaders including interaction with employees, effective budgeting, and risk management/avoidance. The fruits of this effort are not only evident in the satisfaction of the managers, but the benefits are clearly seen in the personnel that they lead. We also measure employee satisfaction through the Workplace Dynamics survey, and we receive feedback from employees regarding the increasing effectiveness of their managers.
Take Survey Data Seriously
Online, anonymous surveys of employees can assist office managers in understanding subtle issues that lead to poor employee retention and decreased engagement. In the book, Good to Great: Why Some Companies Make the Leap...and Others Don't , author Jim C. Collins notes that leaders must confront the brutal facts in their environment. Brutal facts come in many flavors such as the threat of hospital employment on the practice, shrinking revenue, and recognizing that the demographic of a site location may be changing in such a way that makes practice more challenging. Effective leaders will embrace this information regardless of how hurtful the truth may be. I have had employees say that we paid far too little and thus took advantage of our staff or that we were insensitive to their safety when we should have closed the office due to weather. Instead of lashing out or disregarding the feedback as foolish, good leaders will seek out the truth in these statements and allow staff to realize that they will not be punished for being truthful. Leaders should act on this information appropriately, and it is paramount to communicate the understanding of these truths back to the employees. Employees must know that management is listening to their concerns and working to make improvements where necessary. This communication occurs through one-on-one interactions, Town Hall Meetings, or emails describing corporate change to concerns. Staying in constant communication with our employees has worked well for us as we are a Top-Workplace according to the Atlanta Journal-Constitution for 8 years in a row.
Clearly Communicate Strategic Goals
Strategic plans can be dull and esoteric. Leaders must find methods to effectively communicate the company’s strategies so that everyone is engaged in the process. Specifically, I conduct semiannual Town Hall sessions at 16 of our 24 sites, and anyone can call in to listen to the Town Hall if (s)he can’t be present in person. To sharpen my message, I sometimes bounce ideas off my employees as a small focus group and they are free to offer their honest opinions. For example, I was recently having trouble explaining the importance of Net Operating Income to the staff. The focus group helped me hone the message with a specific emphasis on explaining why Net Operating Income is important to everyone; not just our shareholders.
Diversity and Inclusion: Understand Your Blind Spots
Here’s a hard truth—effectively deploying a successful diversity and inclusion program is a difficult endeavor. Why? Honest attempts at improving diversity can lead to perceptions of cultural insensitivity. Encouraging open dialogue about our differences can inflame certain attitudes by different people. And too often diversity programs are led by people who don’t know what they don’t know, and they become token programs that merely “check a box”. Our diversity program, which is represented by persons in underrepresented groups, is directed by various people who are represented by the efforts of the committee, and they are empowered to determine what needs to be changed and how we should do it. Decisions are better if there is input from many diverse viewpoints. My job is to ensure that their efforts are not hindered. The leader must be aware that he or she will have many “blind spots”, and you will need trusted colleagues to serve as confidants and sounding boards to ensure your message is clear and inoffensive.
Highlight Your Company’s Charitable Efforts and then Highlight Your Employees
I believe that most people care about their communities, and so if they perceive that their employer does, too, that will engender loyalty. Our group is involved in local community events like charity runs/walks, we lead a local coat drive to provide necessary clothes for the underprivileged, and our foundation has constructed handicap accessible playgrounds across the city as well.
Several years ago, we started an award program that recognizes employees who demonstrate the qualities of servant leadership specifically quality, compassion, fidelity, professionalism, and humility. We selected these qualities since we believe that these people care deeply about patients and advancing the efforts of the practice. Employees nominate individuals they believe embody these traits, and the finalists and overall winners are an inspiration to the rest of the practice.
The author thanks Sue Dunlap, PHR, SHRM-CP for her guidance on this topic.
1. Ballou-Nelson P. Employee turnover — how do you compare? Available at: https://www.mgma.com/resources/resources/human-resources/employee-turnover-how-do-you-compare
. Accessed November 19, 2018.
2. Collins JC. Good to Great: Why Some Companies Make the Leap...and Others Don't. New York, NY. Harper Business; 2001.