It’s a catch 22. You need to expand your staff to increase income, but additional labor costs have the potential to cut into profits and cash flow.

There is an option: complement your recruiting plan with a proactive business plan to manage the impact of potential labor cost increases.

Let’s start with what you need to consider when developing your recruiting plan. We’re all familiar with the data. There are more veterinary jobs than candidates and according to the 2023 AVMA State of the Profession report new graduates are experiencing the highest rates of job offers ever.

Competitive pay and meaningful benefits are table stakes for Millennials and Gen Zers. In fact, pay and benefits are the number one reason Gen Zers left a job in 2022, and many indicate they won’t apply to a company that doesn’t include pay information right in a job posting.

While a number of factors impact pay, according to the American Veterinary Medical Association (AVMA), veterinarians who graduated in 2022 received an average salary of  $111,242 ($124,686 at corporate practices and $105,637 at private practices). In addition, 81% of corporate practices offered a sign on bonus (averaging $27,181) while 42% of private practices offered one (averaging $10,678).

As for benefits, medical and 401(k) plans top the list, but they are only the start. Considering the amount of student loan debt many new vets carry, student loan repayment and financial advisory services are also of interest. (The AVMA reports, “Among new veterinarians, 38% had $200,000 or more in debt from earning their veterinary degree, inclusive of 13% who had $300,000 or more in debt. Another 18% had no such debt, while 10% had debt of less than $100,000, and 34% had debt of $100,000 to less than $200,000.”)

In general, new generations of workers put more value on working to live rather than the other way around. So, work-life balance via time-off benefits and flexible schedules are priorities. According to the American Animal Hospital Association (AAHA), paid time off is one of the biggest negotiation points of recruits resulting in demands for weekends off, four-day/ 32-hour work weeks, and three to four weeks of time off.

As for the actual job, new workers want stability and are looking for an employer that offers learning and development (especially mentoring), a career path, and a sense of purpose/opportunity to make a difference. In fact, Peoplekeep.com reported, “A Linkedin Learning report found that 94% of employees say they would stay at a company longer if their employer invested in their personal and professional development.”

Beyond the work, new employees are looking for fit and how a potential employer treats employees. Many are defining their own professional brand and values and using that criteria to see how a potential workplace aligns. (Remember, these digital natives grew up with social media and smart phones and will no doubt go online to check out your reputation as an employer and a place to work.)

With these factors top of mind, how can you design an employment offer that enables you to compete for talent without putting profits and cash flow at risk? Consider your options and potential financial impact before ever making an offer. For example, can you negotiate lower pay for more time off or flexibility? How can you work differently to fulfill a new hire’s mentoring, learning and development needs? Do you really need that non-compete agreement or can it be a negotiation point?

Once you’ve developed an offer, calculate its potential impact on profits and consider whether operational changes can help offset cost increases.

• Financial management: Do you regularly track and update your budget, expenses, and revenue? Are there ways to reduce expenses (i.e., group purchasing for supplies)?
• Fee structure: Is it competitive? Do you review it regularly?
• Operational efficiencies: Have you used process mapping to identify potential process efficiencies (i.e., scheduling, billing, inventory management, etc.)?
• Billing and collections: Review procedures to promote accuracy and timeliness; promptly follow-up on outstanding payments; and institute a process for overdue account collections. Consider whether payment plans or an online payment channel can help.
• Inventory management: Track inventory levels and reordering; review usage patterns; and negotiate with suppliers.
• Expand/diversify revenue streams: Consider offering additional services (i.e., telehealth or pet grooming/boarding).
• Tax strategy: Consider conducting a cost segregation study to determine the impact of increasing depreciation of facility components on new construction.

If you need support to create a winning employment deal or more insights into business changes that can help pay for higher salaries, more benefits and other new hire demands, RBT CPAs and our affiliates are here to help. Give us a call to find out how we can help you with financial planning, cash flow management, accounting, taxes, audits, pricing, recruiting, retention, and more.

RBT CPAs is proud to say all of our work is prepared in the U.S.A. – we never offshore. As a result, you get peace of mind that your operation’s financial and confidential information is handled by full-time, local staff who have met our high standards for quality, ethics, and professionalism.

While working hard to keep your animal clients healthy and their owners happy, remember, there’s one more contingent you need to take care of – you and your team.

The toll the veterinary industry is taking on providers is shocking. Suicide, mental health issues, established practitioners walking away from the field, not to mention a talent gap that’s going to keep growing over the next decade. While veterinary school enrollment increased 4.7% between 2021 and 2022, it’s still down down over 9% when compared to pre-Covid enrollments (Boatright, Kate. “The Next Generation of Veterinarians.” October 10, 2022. Todaysveterinarypractice.com.). There is one good thing to come out of all of this – a growing recognition that things have to change.

As reported on Veterinary Integration Solutions.com, “Veterinary organizations must prioritize a healthy workplace culture now more than ever. With so many industry professionals succumbing to burnout and exhaustion, clinics and hospitals that fail to focus on the wellbeing of their workforce will quickly collapse. Defining and implementing a positive workplace culture must take precedence in every veterinary group.” (Zak, Ivan. “Defining and Implementing Workplace Culture in Veterinary Groups.” July 6, 2021. Veterinary Integration Solutions.)

Here are some considerations to help get you started on defining, creating, and maintaining a workplace that promotes the health of everyone – from clients and their owners to you and your staff:

Examine your practice’s culture.

With so many competing demands each day, it can be hard to fathom taking time to define something abstract like workplace culture, but this investment can mean the difference between running a practice that goes through the motions just to keep up and creating a work environment that energizes, engages, and rewards all your constituents. Taking time to define why your practice exists (mission), what it strives to achieve (purpose), your long-term goal (vision), and how work gets done (values) helps guide day to day operations, decision-making, prioritizing, and more. Perhaps most important, these culture drivers help set boundaries and define where to put energy, giving focus and instilling calm to what can otherwise be an overwhelming and chaotic environment.

Find the right people for your team.

While the workforce shortage can easily lead to rash hiring decisions, having the right people who align with the culture you are trying to create and maintain is critical. Just one person who doesn’t fit can turn what could be a healthy, professional environment on its head. So even though it may be tempting to rush through the hiring process once the decision is made to grow your team, take the time you need to ensure a good fit for your practice, team, and future.

Be thoughtful about compensation and benefits.

With so much competition for talent, your total rewards package should show the value you place on staff, incentivize key behaviors to success, satisfy employee priorities, and align with your company’s values. While fair pay and sign-on bonuses are table stakes (that should be based on competitive practices for your geography), up and coming generations of workers give equal weighting to work life balance – one of the biggest keys to promote a healthy work environment. Practices are exploring and offering three- and four-day work weeks; flex hours; adopting no weekend work policies; offering generous time off packages; and more. If you’re concerned about how new policies may impact your practice, conduct pilot programs so you can understand implications before making something permanent. Perhaps most important: be sure to lead by example. When employees see you taking the time to unplug and recharge, they’ll know it’s okay for them to do the same.

Communicate, communicate, communicate.

While putting a lot of time and energy into marketing and customer communications, remember to do the same with your team. Weekly group meetings keep everyone moving in the same direction with a clear understanding of expectations and priorities. One-on-one discussions show each person on your team that they matter and help you understand their priorities and needs (i.e., learning, development, growth opportunities, etc.) so you can make adjustments accordingly. When done consistently, communication helps build trust, shows you care, and reinforces that your employees matter and their input makes a difference.

Evaluate and update how work gets done and who does it.

Are there opportunities to lighten workloads with new technologies? Can responsibilities be shifted to foster better teamwork and more equitably share the work? Is it time to add more staff or new roles to your practice? Should work processes be evaluated to eliminate non-value-added activities while boosting productivity? Do you need to add time and opportunities for staff to recharge throughout the day?

Seek feedback.

Taking a pulse every once and a while to make sure you’re on track to create the type of workplace you always imagined can provide you with valuable insights on what’s working and should continue, and opportunities for improvement. Embed regular temperature checks into your ongoing communication processes. This includes exit interviews, where departing employees may feel more comfortable sharing opportunities to improve.

Perhaps most importantly – ask for help when you need it.

For example, did you know RBT CPAs can be a trusted partner to help with many aspects of your business – from bookkeeping and acting as a virtual CFO to providing business advisory services, Human Resources support (via our Visions HR affiliate), and, of course, by providing accounting, tax, and audit services? We invest a lot of time in getting to know and understand the veterinary industry, so we’re in the best position to add value and promote success.

Watch for more thought leadership articles in the months ahead for deeper insights into building a happy and healthy veterinary business. If you’re ready to get started on doing more today, give us a call today – we’d love to have the opportunity to discuss what we can do to help you run a happier, healthier, and more successful practice.

All work performed at RBT CPAs is made in America by local, full-time staff and team members. We never outsource or offshore, so you always know who is handling your confidential data.

As an owner and/or manager of a veterinary practice(s), the last thing you need is to add a growing list of IT responsibilities to an already full workload balancing the talent shortage, ever-changing customer demands, and a wonky financial environment – not to mention taking care of animals, their caretakers, and your business. While changing your IT environment may be the last thing on your mind, perhaps you should consider making it the first, as cloud computing solutions help manage and/or address many of the challenges facing veterinary practices today.

Say goodbye to IT responsibilities.

When you move to a cloud (a.k.a. Internet) solution, your web-based solution provider takes on responsibility for keeping the system updated, working at its peak, and secure. You’ll no longer be required to buy, install, and monitor equipment like a server or manually install patches (or pay someone to do it). You won’t have to worry about backing up data, a system going down, or protecting data – that’s all on your provider, too. Rather than keeping an IT person on call, most cloud-based service providers include customer service and IT assistance as part of their fees.

Increase productivity and decrease stress.

Help yourself (and your team, if applicable) cut down on administrative work so you’re free to focus on what you do best – whether that’s boarding animals, providing same day care, and/or running a pet hospital for longer-term needs. Cloud-based software can help you communicate with animal owners; send reminders about visits, care, or prescriptions; bill for services (or follow up on bills); and more. Self-scheduling tools save time for both you and your customers. You can even operate more efficiently by accessing and updating health records and treatment plans within seconds from any examination room with just a few keystrokes.

Better manage finances, inventory, and staff.

Cloud-based services are usually by subscription, so you know how much it costs each month and can budget accordingly. Some solutions include tools that will allow you to perform back-office responsibilities (like billing, payment processing, and collections) while gathering data that can help you analyze different aspects of business (i.e., inventory). What’s more, you don’t have to be tethered to a desk, as cloud-based solutions can be accessed from anywhere there’s an Internet connection and from any Internet-enabled device (i.e., phone, tablet, or laptop).

Prepare to grow.

Cloud-based solutions are oftentimes scalable, so you can add to them, add users, or make changes as your business needs change. Plus, even if you have multiple locations now or add locations in the future, data stored in the cloud can be viewed and updated in real-time from any location.

Making the transition to a cloud-based solution may mean some short-term issues you may want to be prepared for, just in case.

1. Shop around. There are a wide variety of vet-focused cloud-based solutions available. Consider exploring several options so you can understand the full breadth of opportunities available, evaluate pricing and contracts, and make the best choice for your business.
2. With the implementation of new software comes new training needs. Support your staff leading up to and through the transition by hosting training to promote their comfort with new software. Also, make sure you have a point of contact at the software provider’s who can be available to answer technical questions, especially during the transition.
3. Check data for accuracy. Upon transitioning to a cloud-based software, make sure client information and other data transferred correctly (i.e., Did your clients’ open accounts receivable balances transfer correctly?). Data accuracy will be vital to making the most of financial reporting tools. It’s easiest to identify and fix any issues identified early.

While you’re busy considering cloud-based solutions, remember, RBT CPAs is here to help free you up to concentrate on your business. We have been providing accounting, tax, audit, and business advisory services in the Hudson Valley and beyond for over 50 years, and we believe we succeed when we help you succeed. Interested in learning more? Give us a call today!

Did you happen to notice People Magazine’s recent article entitled: “New Studies Find Veterinarian Shortage Could Leave 75 Million Pets without Medical Care in 2030”? (Bender, Kelli. March 2, 2022.) There’s something ironic about People Magazine profiling the vet shortage; still, it shows just how dire the situation is and why the veterinarian industry needs to change.

The article reports that 2,700 people enter the veterinary field each year and about 2,000 retire. With pet healthcare spending predicted to increase 33% between 2019 and 2029, there will be an estimated shortage of 15,000 vets by 2030. The American Animal Hospital Association (AAHA) reports that number may even be higher, potentially coming in at 18,000 by 2031. What can a veterinary practice do?

I’m a CPA. No one would ever expect me to be able to perform a medical exam or procedure on my 17-year-old Maltipoo (named Angel). So, why are veterinarians expected to take on the dual role of managing a business and practicing medicine? There is another option.

About 25 years ago, I was hired by an animal hospital to do its taxes. Little did I know that engagement would put me on a path to build my career providing bookkeeping, accounting, and advisory services to numerous veterinarian practices in the Hudson Valley and, later, in other locations along the East Coast and across the U.S.

None of the doctors I would come to work with had taken business and/or finance classes while earning their medical degree. Eventually, this put them at a disadvantage. They immediately recognized that by engaging me, they were freed up to do what they were passionate about – taking care of small animals or, in certain cases, equines.

At the same time, I found an industry and clients who really appreciate the value I deliver, which evolved from bookkeeping, account payables and receivables, tax payments, payroll, and budgeting to include financial analysis, forecasting, and strategic business planning. In essence, I became a part-time Chief Financial Officer for many of my veterinary clients. It was a natural fit that benefited everyone. Fast forward to today…

I’m a partner in an accounting firm and most of my clients are veterinarian hospitals and practices. I love their passion for what they do and how much they value what my team and I bring to the table. More than just number crunchers, in the majority of cases, we have become part of our veterinarian clients’ strategic management and planning teams.

We know the right questions to ask and when to ask them. Do you know your numbers? Are you profitable monthly? What is your patient volume going to look like in a recessionary period? Are you getting monthly financial statements and understanding what they mean? Do you know how your business is trending to last year and benchmarking against competitors in the area? Do you need to increase rates to reflect the price of prescriptions and payroll? Given the economic environment, can pet owners afford wellness visits? Are your margins shrinking? Who is monitoring all of this? Where do you want your business to be in five years and how will you get there? Are you thinking about selling? What is your business valuation and how does it impact what you decide to do next?

We also help practice managers and doctors understand how different courses of action will impact business so they can make informed decisions. This type of support is even more meaningful given today’s economic uncertainties; supply chain challenges; changing tax, accounting, and legal requirements; cybersecurity issues; and more.

Plus having knowledge of both the veterinary industry and accounting, tax, and advisory services positions my team and I to bring solutions for a variety of challenges. For example, do you know how the Secure 2.0 Act will allow your employees to pay off student loans while you put matching funds aside for their retirement? Have you explored how the Inflation Reduction Act can help you reduce certain monthly expenses and your carbon footprint?

So, enough about me. What about you? How can RBT CPAs help lighten your workload, respond to current challenges, and set the stage for greater success in the future? We would love to have a chance to speak with you and show how we can deliver value, while freeing you up to do what you do best: take care of animals and their people. Give us a call today.