Guide to reducing team turnover in your clinic: how to incentivise employees for long term stability and growth

Keeping your team members engaged in your medical or allied health practice can be a real challenge, and when key people resign, it’s not just the time, effort and money invested in recruitment and training that hurts, there is a genuine connection with your key personnel and the disappointment that you were not able to offer them what they needed to stay. Employee turnover is a growing issue for medical practices and allied health clinics, so in this article, we discuss what you can do to engage, motivate and retain your staff.

The most common methods we consider in this article involve financial incentives, but the most effective incentive plans use a number of different models to cater for a wide range of individual needs and career stages.  Interns or graduates for example, are not as likely to be interested in share schemes or profit sharing as more experienced professionals, but in the interests of attracting and keeping excellent talent, your incentive plan should include programs such as professional or personal development training and career development that will appeal to different career stages.

FINANCIAL INCENTIVE PROGRAMS 

You can financially incentivise your team in various ways. What you consider will work best for your business can depend on a lot of factors. We will explain the pros and cons of the options explained below.

Bonus Payments

The most obvious and simple financial incentive that comes to mind is a ‘bonus’ structure, which can help boost employees pay packets. Depending on how it’s designed, this is not necessarily the most effective, as it can motivate employees to act in their own interests (instead of the practice’s best interests). It’s also not always an effective retention tool because the team member might walk away when the going gets tough or may take a better offer (i.e. a better salary, or higher bonus payments).

Profit Sharing

A profit share scheme is one of the most popular incentive programs, particularly for key employees. Profit share is usually set up using the business financials to track how the business is going transparently with the key employees, and then you can set a percentage of profit from the practice which is then distributed to the employee on pre-agreed dates. 

Employee Share Scheme

Depending on the structure of the clinic, you may wish to implement an employee share scheme. This is an effective way of providing clear, shared targets and compounding return on investments of time, effort and commitment to the successes of the practice, and can be structured to not dilute your equity or decision-making ability. If it is done correctly, this can also have beneficial tax consequences.

An employee share scheme is an effective tool to engage, motivate and retain. Depending on the size and nature of your practice, the structure of a share scheme may vary. The simplest share scheme is employee share options, which enables you to offer key employees the option to purchase shares for nominal consideration, with the option vesting upon completion of desired benchmarks. Benchmarks might be years of service or any other significant benchmark or measurable KPI relevant to your practice. 

Ownership

A ‘level up’ from the above incentives, is partnership or an equity offer. This is not strictly an ‘incentive’ but can be valuable to keep in the back of your mind, especially if you have not thought too deeply about succession planning. This structure is best when you have an individual you have worked with for a substantial period of time and cannot imagine your practice without them.

Some employees are not interested in clinic ownership and do prefer to clock in and out – so don’t be disappointed if you canvas this option and it’s rejected outright. As mentioned above, its not strictly an incentive, but it can be a useful conversation to have in any event.

INTRINSIC INCENTIVE PROGRAMS 

Depending on the size of your practice, it may not always be practical, or affordable, to offer financial incentives to every worker.  It may surprise you, but it is definitely not always what employees want or need.

Culture, culture, culture

It might be surprising to see culture as an incentive but research indicates most employees prefer a good workplace culture over a comparably higher salary. A bad culture can foster negativity, lack of engagement and ultimately, can impact patient care. We have seen this many time, as some practices may attempt to implement a very generous share scheme, however they will see little to no uptake or improvement in staff turnover rates.

“Culture” doesn’t necessarily mean installing a ping pong table or organising a team dinner. It might be, but the only way to find out is to ask them. It may not be at all what you expect!  Having a clear purpose for the clinic, a vision and visible, and enforced values will help drive a positive culture.  

Celebrating wins together with your employees is also a way to engage them in the performance of the clinic. It invites them to participate in what is also their success and provides an opportunity for them to feel valued for their contribution.  

(Hot tip: A cultural assessment of your practice is also a good way to identify risks or pain points within your clinic that you are perhaps not aware of).  

We believe this topic is so important we have previously written an article on it, which you can read here: https://youlegal.com.au/you-legal-blogs/getting-a-handle-on-your-medical-practice-culture

Education, Training and Advancement  

Education and Training is an incentive tool that should never be underestimated. Excellent employees, achievers and drivers more often than not strive to improve - no matter what their role within the practice is.

The most obvious form of career progression is a promotion in terms of role, responsibility and/or salary. However, the opportunities for such defined career progression may be limited in some smaller medical practices for supporting staff. There are other ways though, aside from promotions, that practices can motivate employees in this respect. For example, offering to pay for or provide additional resources, training, education, extra paid (or even additional unpaid) leave and support systems to enable your staff to continue to upskill benefits them personally, professionally will ultimately benefit your practice.

Warning

It is important to be mindful that implementing some of the above incentives could expose your practice to risk in certain circumstances. For example, if you have engaged doctors under a Services & Licence Agreement, or a Services Agreement or a Room Rental Agreement but treat them as an employee in certain respects, such as providing paid leave and support systems for training and education, then it may put your practice at risk. We recommend being selective as to which programs you implement, and for which people in your practice, which is why this article is focused specifically on employees.

What’s Next?

In addressing the challenge of staff engagement and retention in medical and allied health practices, a multi-dimensional strategy can give you more value than financial incentives alone. Effective incentive plans are those that recognise and cater to the varied aspirations and stages in each team member's career. By integrating professional development opportunities, career advancement paths, and recognising individual contributions, practices can foster a workplace environment that values growth, open communication, and a sense of belonging. This approach not only motivates staff but also cultivates loyalty.

Creating a supportive and inclusive culture where every employee feels valued is important. Implementing programs for professional and personal development, alongside fostering a workplace that celebrates achievements and facilitates teamwork, can improve job satisfaction and retention. Ultimately, the key to reducing turnover and enhancing engagement lies in recognising the diverse needs of your team and committing to their long-term development and well-being within the practice.

You Legal can help to document your current, or proposed, practice incentives for team members, and provide legal advice on implementing them.

For specific legal advice tailored to your medical practice, please don’t hesitate to contact us here.