Just Checking In - Episode 24: About Those "Cheap Employees"

Episode 24:
About Those “Cheap Employees”

Urgent care is considered a “people business” because it entails people performing services upon other people. Thus, urgent care is successful to the extent patients have sufficiently good experiences and medical outcomes to want to use the center again in the future and tell others to do likewise. Because expenses are much easier for urgent care operators to control than revenue, there is a tendency to increase profits by cutting or controlling labor costs. In reality, converting “patients” into “fans” requires treating employees as long-term investments in the business with competitive wages, benefits, and working conditions. urgent care consultant Alan Ayers has more!

Just Checking In: Episode 24 - About Those 'Cheap Employees'
Video Transcript

Good Evening! This is Alan Ayers and I am Just Checking In. Recently I had an experience where I went to an urgent care center with a director of operations who asked the center manager…”Were you able to give an offer to that radiology technician we had spoken about?” And the center manager enthusiastically responded, “Yes, I gave her the offer and she accepted and you’ll be really happy I got her for ‘cheap’!” So, when I heard that, I actually got a little bit of a knot in my stomach. “A ‘cheap’ employee”?

You know, if you think about, one of two things had happened. One, either she gave the radiology technician an offer that was below the market rate, and if that’s what in fact occurred, the expectation would be, over time, that the radiology technician would continue to look for employment elsewhere, once the RT is able to find a better paying job, or a job with better benefits, or a job with better working conditions, they’ll leave the urgent care center, returning the urgent care center back to its staff situation that it had dealt with before. The other alternative would have been that if the low wage, if the “cheap” was what the employee was actually worth, then the center actually ended up with a “cheap” employee and in that case, they may have actually gotten their money’s worth.

So, the issue is paying employees what they’re worth to keep them in your organization and to keep them performing at a level that will provide good patient experiences, repeat visits, good medical outcomes, and so on. So when you look at the areas of responsibilities of an urgent care operator, they can control the expenses. It’s very difficult to control top-line revenue. Top-line revenue is basically the volume of patients in the center times the rate. Well, volume can be dependent on the things you can control, like marketing. But, by and large, an urgent care operator can’t control whether there’s a flu epidemic, they can’t control competition, they can’t necessarily control insurance contracts. So top-line revenue is very difficult to manage. Expenses, on the other hand, are somewhat easy to manage. So if you look at the span of control for an Urgent Care Operator or an Urgent Care Manager, their focus is going to be on expenses with labor being the #1 expense to the center. So if an Urgent Care Operator wants to make an immediate impact to the center, if they can cut labor cost, there will be an immediate impact to the profit and loss statement, even if that impact undermines the long-term success of the urgent care center.

So, if we look at the retail industry, urgent care has many similarities with retail in terms of the business model, the types of employees that we’re hiring, and the whole customer service orientation. Well, the focus in retail should be customer service, but because retail historically pays low wages and offers few or sub-standard benefits, instead, in retail, we tend to see very high turnover. Some retail stores have turnover rates of 100-300% or more. We tend to see poor morale and inadequate training, or inadequate investment in retail employees results in poor execution. So, as an example, I recently had an experience where I went into a store and I was looking for a specific size. Well, I asked the store employee, who was very nice, she was very friendly, I said, “Well, you know, this is what I’m looking for. Do you have it in this size?” And she said, “Yeah, if we have it, it will be back on that shelf.” And she kind of sent me back there on my own. She didn’t walk back with me. She didn’t help me find it. She really didn’t seem to care whether I bought the item or not. Well, certainly she was polite and she was nice enough, but she wasn’t vested in my satisfaction. She wasn’t vested in creating revenue for the center. She was there for a paycheck and, therefore, doing the minimum that she could do. So we frequently see these behaviors in retail, but there are some exceptions. If you look at retailers like Costco, Trader Joe’s, and others, QuikTrip is another example, then you see these retailers tend to pay above market wages and offer above market benefits, and, as a result, they have lower turnover. They have better customer satisfaction. They have higher employee satisfaction. They have better customer service. So there are examples in the retail industry where offering above market or highly competitive wages and benefits will attract better quality employees, will retain those employees, and the end result will be better customer service. And in urgent care, of course, good patient experiences lead to repeat business and positive word-of-mouth which drive volume in the future. So when we talk about you can’t control top-line revenue, you can control expenses, well long-term, you can control top-line revenue to a certain extent if you make investments in employees and a salary, wages, benefits should be considered investments in people, investments in the business, not just expenses that are intended to be cover control. It is possible to create a model in urgent care that is beneficial for both employees and patients.

So if you’re looking for additional ideas or questions on how to staff an urgent care center, how to develop a positive patient-focused culture in your urgent care center, if you’re looking for bench-marking data, on salaries and benefits, that’s all information that we can provide. Feel free to contact Practice Velocity at the website you see on your screen. Once again, this is Alan Ayers. Thanks again, Just Checking In.