The Physio Clinic Dilemma

10 Minute Read

Here's a common scenario. A new physiotherapist starts working for a busy clinic. They’re offered a certain percentage commission from the start plus superannuation. It doesn’t take long for this new grad to fill up their appointments and within a few years they may be running at full capacity. Most clinics charge a standard rate for each of their physiotherapists, with no price distinction for experience.

This physiotherapist is earning a decent amount but it’s time to ask for a pay rise. The therapist knows that their skills have improved immensely and patients are receiving superior service. They can also treat more efficiently and are easily managing a full caseload. The problem is that, even as their skills improve, once a caseload is full there is no room to grow. From the perspective of the physiotherapist they know their value is higher and they bring more to the value of the business, however from the perspective of the business owner, increasing the commission of the physiotherapist will just bring them less money. The business owner also doesn’t necessarily make enough money from their clinic to feel as though they can lose money and may feel as though their hands are tied.

It’s a complex but common issue. A clinic’s best asset is going to grow the value to the business, yet reduce the profitability. So what happens next? The clinic owner, unable to afford higher commissions declines to give a pay rise. The physiotherapist, being aware of their superior value feels unappreciated and leaves to start their own clinic. The clinic employs another physiotherapist and the cycle begins again. The physiotherapist becomes jaded about what they perceive as their bosses single-mindedness about money and the clinic owner becomes frustrated at putting in time and effort to train staff who are inevitably going to leave anyway.

So what is the solution to this kind of situation? It depends a lot on how your clinic works and how much room you have to grow but here are a few ideas that could help both parties with negotiating an outcome that is mutually beneficial.

1. Ask staff what they want.

Some staff leave not because of money, but for other reasons such as lack of flexibility, poor lifestyle, commute time, creative control or inadequate holidays. It is common for employers and their staff to never have a frank discussion about priorities and lifestyle aspirations. Some people just want the peace of mind that comes with being an employee who doesn't have to worry about commissions, budgeting for holidays and sick pay. Others want to be in control, and become bored having no input in how a business is operated.

Find out exactly what it is that your staff member wants from their career and take steps to provide them with a mutually beneficial solution.

2. Plan for this situation.

From the first interview, make it your business to know what your staff want from their career. They may not tell you, you may not ask and they might assume that they won’t be able to achieve their goals if they continue to work for you, even if they can. If this line of communication is open from the beginning of their employment you may be able to reach a solution that neither of you would have considered independently.

If they do decide to pursue career goals in another elsewhere it will be obvious very early on and you wont be taken by surprise.

3. Have a different pay scale for different experience levels. Let the public know that experience is important and value it monetarily. Separate clinicians into junior and senior physiotherapists, charge more for experience and give patients the choice of who to see. Clinicians automatically earn more as they move into a senior experience and they also bring the clinic more income.

Alternatively, you could have senior therapists performing all initial assessments with junior therapists following up care. This would also help to improve consistency within the clinic and prevent any potential mismanagement of cases.

4. Offer the physiotherapist the opportunity to create a position for junior

physiotherapists. They build up a caseload with the junior therapist, providing real professional support and mentorship to the junior therapist. As they are creating more income for the clinic they can take a commission from the money brought in from the junior clinician. Some clinics unintentionally operate as if each of their clinicians were a separate business with one sitting idly while the other is too busy to see new patients. Many experienced therapists often have no interest in ensuring the junior therapists are busy or developing their skills. This system could encourage them to train and support the other therapists working with them, increase the size of the business and increase their own income.

5. Offer Business Partnerships.

Either take on your therapist as a partner in your business or join them in the journey of setting up a new clinic. If your clinic doesn't have room to grow embrace the inevitable departure of your staff and set up a new clinic with them. This is a higher risk option and if it suits you will depend on your individual circumstances.

6. Offer tax-deductible perks and bonuses rather than a straight pay rise.

A company car, holiday paid for, superannuation payments, training courses, computers, tablets, phones or even payment for post graduate courses. This can work out better for both parties than simply paying out a higher commission. Check with your financial adviser or accountant to see which options are available to you and suit your clinicians.

7. Pay an extra hourly bonus for managing other staff and performing marketing duties.

Give some of your work to your senior, allowing you to either have more time off or spend more time working clinically. The effectiveness of this approach will depend on the size of your clinic and how involved you already are in clinic. If your clinic has room to grow and not all of your clinicians are filling their books all the time then a marketing manager can be worth their weight in gold. Set clear expectations and goals that must be met for this arrangement to stay in place.

Tips for the therapist who wants a pay rise.

It helps to recognise, that despite what you may think, physiotherapy clinics often run at quite small margins of profit. As an employee it is easy to underestimate the number of overheads involved in running a business. You may feel like your boss is being stingy, however they may feel like they have no room to move.

As with any industry, if you want to get more from the business you need to show your principal how giving you a pay rise would be beneficial for them and not simply a loss in profit. While on one hand it may feel as though it is a fair and reasonable thing to do, business owners don't always find that to be a convincing argument, particularly when they deal with the stress of managing a clinic on a day to day basis.

Think about how you can add value to the business, or even what exactly it is that you want. Have a plan from the outset of how you want to continue at this work place and what it would take for you to stay. If your boss isn’t interested in having this conversation then you will save your self the frustration of working for someone for years before realising your career is going nowhere.