The first-year contract you sign post-residency or fellowship sets the base for your entire career. Not only do future salaries, benefits and bonuses all build on what you earn today, but having the right safety net now can protect you in the event of a termination or malpractice claim which can threaten your family’s financial security.
Before you jot your signature on the dotted line, it’s important to have both an attorney and financial consultant on your side to help you negotiate for the compensation and protection you deserve.
Assembling Your Negotiation Team
Many first-year physicians consult with a contract lawyer or employment attorney in order to understand the fine print of their agreements. An attorney will focus on a number of issues, including termination, malpractice, moonlighting, liquidated damages, and restricted covenants.
When determining if an attractive offer is truly the best for you financially, it is time to turn to a Larson Financial Group expert who is experienced in the financial aspect of contract negotiations. With the right national comparative data in hand and an understanding of your current and future career goals, your personal Jerry Maguire can determine if the salary, benefits and bonuses offered are competitive. And if they’re not, we can empower you with the information you need to make your case for greater compensation.
Working With Your Financial Planner Through the Negotiation Process
For example, let’s say a neurologist who comes to our office for a consultation is offered a base salary of $225,000. The hospital is willing to pay $25 per RVU for anything over 5,000 RVUs and expects the physician to get to 6,000 RVUs. That extra $25,000 on top of the base salary puts the neurologist at 40-45% of the national average for compensation.
Because the hospital wants the neurologist to hit 6,000 RVUs, from a work standpoint, the physician sits at 60-65% of the national average for productivity. In other words, the neurologist is getting paid at the 40-percentile mark according to the national data, but asked to work at the 60-percentile mark.
The question for the neurologist and the financial planner is – “How can we get those numbers closer together so that the physician is more fairly compensated for the extra work?” The key is to determine which levers to pull in negotiations with the employer, which could mean asking for a higher base salary, suggesting $50 per RVU as opposed to $25, or requesting a bonus over 5,000 RVUs.
While you can come back to the table with a counter offer, there are many control factors to consider. For example, hospitals don’t always have to pay the national market rate, especially those in rural communities or for specialties in oversaturated markets. But if you bring a realistic approach to renegotiation, you and your employer can often find a middle ground.
Four Key Points to Remember During Negotiation
After almost a decade of preparing for your career, you deserve to be treated and compensated fairly. As you head into contract negotiations with your employer-to-be, be sure to have a plan of action in place to put you in the driver’s seat of your financial future:
- Reference the data. If there’s anything medical professionals understand, it’s research data. Keep emotions out of negotiation and instead present the national compensation comparison data you and your financial planner worked on together.
- Avoid anecdotes. Sharing examples of the salaries your fellow residents received will do little to help your case. Every situation is different – one’s professional experience, where they choose to practice, and what they specialize in all play a role in how they’re compensated. Stick to the numbers and skip the stories.
- Good cop versus bad cop. If negotiation comes to a stalemate, pull in your financial planner. If we determine your employer is undervaluing your worth, we can write a detailed letter on your behalf that outlines how their offer stacks up to current market trends.
- Retain legal and financial counsel. The recent COVID-19 outbreak has put the legality of many contracts into question as elective surgeries are put on hold and hospitals lay off or reduce hours for physicians. Having your legal and financial team at the ready can help you react quickly to unexpected complications now and to contract negotiations down the road.
If your residency is about to come to a close and you’re ready to take the next step on your career path, contact the financial planners at Larson Financial Group before signing any contract. We can connect you to a reputable contract lawyer, review your offer, and offer aspects of financial strategies to consider as you negotiate your future. To schedule your consultation, contact us today at 314-787-7399.
Advisory services offered through Larson Financial Group, LLC, a Registered Investment Advisor. Securities offered through Larson Financial Securities, LLC, member FINRA/SIPC. Insurance services offered through Larson Financial Group, LLC, an insurance agency.
Larson Financial Group, LLC, utilizes MGMA software to gather national compensation comparison data and other relevant data to assist physicians in contract negotiation.