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The Costs of Hiring and Firing


Recruiting a new doc and bringing him/her up to full speed costs tens of thousands of dollars and much more in potential production loss. This reality underscores the importance of employee retention to the health of your practice.

In my on-going series on docs' financial affairs, one area we need to look at is the surprisingly high costs of hiring and firing people who work with us. And as always, I rebuke our training programs for their ostrich-like attitudes, ignoring how important managerial and organizational competence is to the quality of medicine that we practice.

We know that recruiting a new doc and getting him/her to full speed takes 1-2 years and costs tens of thousands in recruiting fees, travel, signing bonus, moving expenses, etc., and much more than that in potential production loss.

So employee retention is a key issue that underscores the importance of hiring carefully and properly. Fortunately you don't have to reinvent the wheel in the Internet Age because there are a lot of ideas you can quickly pick up with a bit of homework. In my own, pre-net, school of hard knocks manual, the number one lesson is that you can train a doc or medical assistant to do almost anything. What you can't do is change character and attitude. And that's what is critical to focus on.

After getting burned a few times, I have come to value maturity and natural cheerfulness as two keys to staffing an employee who not only does good, professional work but also has the ability to engage in the teamwork that has come to define the best practice of medicine in 21st century America. It also really helps to come to work with people who are good to work with, not just who are competent and show up.

And although retention is economically important, it is paradoxical that when asked, most people do not define money as the main reason for liking and staying in a job. Sure, everybody likes more money, but they always indicate that respect and appreciation rank first. Unfortunately, one more neglected area of physician training is formal preparation in managing people. Now, some docs are just nice folks to be around, but there are far too many who aren't. If we don't get too defensive about it in a private moment, we know who we are and when we do or don't go the extra mile to support our staff. If you don't believe me, ask around. You will be impressed with how observant other people are.

A few disclaimers are appropriate. Yes, we are under time and economic pressure which bears considerable responsibility for our patients' well-being. Daily we are called upon to make important decisions with inadequate data. Many of us are working with too little sleep and too little physical and spiritual nourishment, and innately we don't often suffer fools easily. But aside from all that being counterproductive and unhealthy, it costs us money - a lot of money - in team inefficiency and preventable turnover. And, unfortunately, under stress we have no training on which to fall back in these areas. We can handle CPR but not personnel PR.

If you look ahead to the unpleasant obverse of hiring, you will come to firing. My point here is that if you hire well, aside from all the benefits I have described, you will be able to minimize the (expensive) need to fire. But dealing with a difficult employee is an area fraught with legal landmines. Any doc who has even one employee is mandated to know the laws that apply in their locale. Being in denial ("too busy" comes to mind) can be a very painful and expensive exercise.

And don't "leave it to my office manager" to know the basics of labor law. It's your business, your reputation and your nickel.

A recent survey in the Wall Street Journal identified Mike’s Car Wash, Inc. as one of the best small places to work. The owner said that he interviews 100 (!) people to hire just one because he intends to keep that person. This is probably overkill when dealing with healthcare professionals, but you get the point. And who knows, you might even get to a place where you enjoy the process of hiring smart and managing smartly. If you do, I can promise that you, your patients and your bottom line will be the better for it.

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Victor J. Dzau, MD, gives expert advice
Victor J. Dzau, MD, gives expert advice