Three Guidelines for Optimizing Healthcare Compensation
March 23, 2018
The challenge for most healthcare organizations is that they are dealing with highly competitive talent markets while simultaneously trying to fill highly specialized and complex positions. It is not uncommon for an employee of a healthcare provider to have multiple positions and pay rates all within the same building!
The opportunity here is to create a compensation strategy that is a step ahead. Knowing what you need to pay, what not to pay, and how to pay can save healthcare organizations huge amounts of time and money. Let’s look at each of these a little closer.
We’ve all heard stories of healthcare employees literally leaving jobs for a dollar here or a dollar there. While market compensation data is somewhat of an inexact science and a quickly moving needle in healthcare, it is still helpful information to have. In fast-moving, competitive markets like healthcare it is easy to assume you know the market pay rates, but these could vary greatly based on the region, specialty, or even size of the organization. Check with folks in your recruiting department, industry associations such as ASHHRA , or check with any of the various compensation survey vendors to get the best data.
As much as we don’t want to lose good talent because of compensation, we also don’t want to overpay. A good compensation planning strategy will allow you to avoid overpaying by having done the research, established benchmarks, and collectively decided upon your pay structures and pay-for-performance modeling. Employees may have a very different idea on what competitive market pay should be (more or less) based on previous jobs, locations, etc. Ask the right questions, and don’t be afraid to be creative and leverage your compensation budget so it’s put to use keeping the best talent. The takeaway here is not just to lower base compensation or blindly hand out bonuses—it’s to recognize there are more factors at work, many of which are in your control. Keeping your finger on the pulse of some key data points can go a long way in helping you pay more appropriately.
This may seem more like a requirement than a strategy, but it’s important to healthcare employees. Have you ever had an employee confused about his/her paycheck or annual statement? Of course, we all have! As we mentioned previously, it’s not uncommon for healthcare employees to hold several positions with varying pay rates depending on what type of work they are doing on that shift. Having a consistent, transparent compensation payment process will provide peace of mind for your high performers. It may not add financial value for their employment, but knowing they are being paid accurately can be a great retention tool.
This blog post excerpts an article in our recent eBook, Using Goal Setting and Performance Management to Improve Outcomes. Download the complimentary eBook here.