We have been asked numerous times about how we go about negotiating contracts. How we have been able to land salaries 13-30% higher than the initial offers. In order to properly address this topic we are going to do a three part series. The reason for this is straight forward. There is no magic to getting paid more!
This 3 part series covers the following topics:
- Become valuable
- Communicating your value
- Get paid for your value
Get paid what you are worth!
Contract Negotiation
Now that you have become an expert clinician and learned how to communicate your skills and the added value you bring to the table it is time to negotiate the terms of the job you have just been offered!
Most people reading this article are going to have skipped steps 1 and 2, and then wonder why the steps described below are not working for them. Simply put, if you are not worth the money you are asking for you will not get it!
Some of the details listed here will be specific to traveling therapy, however the overarching principles can, and should, be applied to all contact negotiations.
As a matter of transparency I want to point out that learning these tactics has been a journey and I, by no means, am an expert in negotiations. Yes, we have had some big wins. But there was also a time when I accepted a position that paid nearly 12% less than I had initially hoped for. 12% is a HUGE loss! At that time I failed to communicate my “Added Value,” and had not pre-determined a walk away number.
Simply, if you are not worth the money you are asking for you will not get it!
Here are the tenets that we rely on for our negotiations:
“He who speaks first looses.”
A former patient and mentor of mine, who was a CEO-for-hire of sorts, once told me this. Never show your hand before you absolutely must.
What does this mean for physical therapy contracts? When asked how much you made prior or how much you would like to make now, do not answer. Remit Sethi has a great article about this here.
The quick and dirty is this: Announcing your prior or preferred salary instantly handicaps your ability to ask for more. Look at it this way. Say you tell a recruiter that you would love to make $1500 a week take home, but there was room in the budget for them to pay $1700, you just left $200/week on the table AFTER TAX. That is $10,400/year, in your pocket, you just lost!
Never ask YES/NO questions
In stressful situations we often opt for the easiest answer possible. Contract negotiations are stressful for everyone involved. Generally for the employee they are more stressful, but even the most seasoned hiring manage feels some degree of tension. Do not put them in a position where their brain can simply land on the default one word (“No”) answer.
For example, if the offered amount is not sufficient to meet your needs, a statement such as:
“You know, I am very excited to join XYZ clinic as you/they continue to grow and expand. My experience in aquatic therapy fits nicely into the niche you/they are creating, and will really add to the diverse specialties XYZ offers. What else can you do to make this arrangement work out?”
By plainly expressing your interest, intent, and value, with this statement, you have placed the success of this deal solely on their shoulders without the safety net of the monosyllabic response.
Pay for performance is the way of the future
Yes, most clinics still go by the seniority model. This is Bogus! As the times change, skills progress, and reimbursement structures evolve. It is clear that senior in age does not always correlate with senior in performance. The orthopedic realm is quickly moving into a pay for performance reimbursement model through Medicare and it is about time that clinicians get paid the same way.
Have a walk away point written down
Don’t get suckered into taking a job that is not the right fit for you and your family. If there is nothing else we can convey in this post (Heck, in this entire blog!) its that YOU are in control of the life you live! Yes, compromise happens in life, but it should always be in the form of a positive constraint and not a negative one. If taking an underpaying stressful job will limit you from achieving your life goals it is better to cut and run early than to limp along miserably.
Never take bonuses from your recruiter!
Bonuses are a SCAM! I recently interviewed a recruiter to get some insight into the inner-workings of the system. Here are the details about bonuses. A bonus is paid for out of the same pot of money that the rest of your pay and the recruiting companies pay comes out of.
Check out this example:
Say they have the budget to pay $1,400/week x 13 weeks = $18,200 total
But they offer a $1,000 completion/sign-on/extension/tuition bonus
That $1,000 comes out of the $18,200 pot.
So now, instead of $1,400/week you take home $1,323/week…and it gets better.
See, bonuses are taxed at a flat 25% by the IRS, so now, instead of getting that full $1K bonus you only get $750, and are paid less each week.
What a headache!
The only time a bonus should be taken is if you get, in writing, that the bonus is to be paid by your clinic and not by the recruiter. From what I understand that means it is truly taken from a different pot and not out of your pocket.
Always take the full housing stipend
The tax free housing stipend in a tremendous benefit for the travel therapist. Sure there is some scrambling involved with securing your own housing, but being able to pocket the left over cash is clutch. Otherwise you simply surrender that money back to the recruiting company.
Leverage is helpful
Absolutely nailing the interview is the most important part! There is tremendous pressure on a recruiter to place you in that job. Once a clinic approves you for hire they expect you to be their employee in short time. The internal pressure to secure you into that job is very real and often weighs heavily on your recruiters head. They are responsible for your happiness, but also that of the clinics, as well as their own bottom line. The more excited a clinic is to hire you the more leverage exists to negotiate for higher pay.
Limitations exist
It is important to keep in mind that while your initial offer should alway be negotiated higher, there is a limit to what your recruiter can do for you. The pot is only so big and it must include your benefits, liability insurance, and all of their companies expenses.
Final notes for travelers
Always attempt to negotiate a 40 hour guarantee – Again, it may not be possible and is largely determined by the clinic you are working with more than your recruiting company, but it does ensure some increased security that you will be paid full time if census dips for a while.
Never agree to any sort of “per diem adjustment” – I have only had this in my contract once and it was a mistake. My wife and I almost walked off of a job because of it. Once we dropped that nuclear bombshell on our recruiter he quickly wrote it out and we signed an amended contract. We were going to have to pay $16.80/hr back to our recruiter because the clinics we worked at were closed on Black Friday. It wasn’t like we were missing work due to illness or laziness. From now on we get these written out from the start.
Predetermine your days off – Just as a way to simplify your life, it makes things super smooth to have all of your trips home or long weekend adventures pre-scheduled and put into the contract on the front end.
BAM! There you have it. Your 3 step plan to make more money! Yes this will work for you. No, you will not get paid more than you are worth. But I guarantee that you will continue to get paid less than you are worth if you do not follow these simple steps.
Call for comments: Let me know how your next negotiation goes! Comment below or shoot us an email!
Written by: Dr. Stephen Stockhausen PT, OCS
You mentioned taking the whole housing stipend. My recruiter suggested that our housing pay comes out of the pay package(even if we find our own housing). Is that not they way other companies handle it? Maybe I misunderstood him? I am just finishing school and have not actually taken any assignments.
David, I think you misunderstood him. Most often recruiters present the pay package as a flat number per week, most often after taxes. This amount reflects ALL monies coming your way. Hope this clarifies things some.
Thanks for reading!
Steve