The Employee Balance Sheet

Do you view employees as assets, expenses or liabilities?
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"Your employees are your greatest asset” has been a management mantra for years. But mantras only work if you embrace them. Do you genuinely consider employees to be assets? Or is there a niggling feeling in the back of your mind that at least some of your staff members are more of a burden than a benefit? If you identify more with the second statement, you don’t need a spiritual transformation, just a shift in thinking.

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Consider this: Doctors and staff create the wealth in your practice. They generate revenue, manage client relations, interact and negotiate with vendors, and represent the practice in your community. They are the cheerful voice on the phone, the skilled clinician and the calm presence in a late-night emergency. Regardless of who owns the business, to the outside world, the employees ARE the practice.

Employees as Assets

If you genuinely believe employees are assets, you value each one as an individual. You’re more likely to put them through a thorough vetting process before hiring to ensure they are a good fit with the practice and the current staff. By adding their unique skills and aspirations to your practice, everyone moves forward another step—so individuals benefit the practice as a whole. You are excited about the prospect of what employees can do for you, as well as how you and your co-workers can help them develop.

After they are on board, you invest time and money to maintain their skills. You work with each person to choose training and growth opportunities that not only benefit the practice, but build the person as a whole. Practices that embrace this philosophy encourage continual learning, both on the job and in non-job-related areas, because well-rounded individuals who are allowed to pursue their passions make better employees.

Treating employees as assets means doing what you can to challenge them and acknowledge their efforts. People want to work for businesses that value them, where they are part of something important and where their efforts make a difference. When your staff raves about working for you, you may have people waiting in line for an opening at the practice. And if your staff loves working for you and with you, open positions may be few and far between. And because hiring is an expensive proposition, both from a time and money standpoint, treating employees as assets is a smart business move.

Employees as Expenses

Perhaps you view your employees from a less altruistic sensibility. Indeed, employee expenses such as salaries/wages, payroll taxes and benefits represent the largest expense on almost every practice’s financial statements. I frequently encourage my clients to reduce staff expenses as a percent of gross fees in order to achieve or maintain practice profitability, but through growing the practice, not by cutting back on staff.

Right now we’re not focusing on the cost to your business but your attitude toward the people you work with. If you take the approach that employees are expenses, you probably do everything you can to reduce that cost. This means keeping wages as low as possible through bottom-end starting salaries, minimal or non-existent raises, leaving empty positions open even if it increases workload and decreases service, and offering minimum training when you do hire. You may consider staff members to be somewhat interchangeable and relatively easy to replace. Some practices insist that they only have to pay a bit more than the local fast food chain to find a new receptionist. But most of us have worked in a job where we were not valued and where we were only biding our time until we could move on.

Seeing employees only as expenses on the balance sheet rather than individuals who have something to offer your practice in terms of skills and energy might work in the short term to improve profits. But over time, expect an unhappy staff and high turnover, which are major expenses in themselves.

Employees as Liabilities

Employees may be liabilities if they act as barriers to progress or lack the necessary training (or willingness) to perform their jobs or maintain your practice’s standard of care. They can be liabilities if they are unhappy with their work and their attitude spreads poor morale both to other employees and to clients.

If you consider someone to be a true liability, or if you don’t trust him or her to do the job professionally, appropriately or with the best interests of the practice, the client and the horse in mind, this person has no place in your practice. I am amazed when I hear that an employee has been causing problems for years, has been counseled and/or retrained, but still comes to work and causes problems. If that’s true in your practice, cut your losses and let that person go. Keeping such an individual on the payroll sends a message to everyone else on your staff that poor performance is tolerated—not really the standards you want to set for your staff.

The simplest of these situations to address is training. If an employee doesn’t have the skills to work in your practice, identify a mentor (possibly yourself), send him or her to a class, or provide in-house training. Also establish a deadline by which the training must be completed. It’s easy to postpone training when the practice is busy, so follow up periodically to verify progress. If your practice trains employees by throwing them into the mix and hoping they catch on quickly, you may be creating a future liability. What they don’t know could hurt the patient, another team member or the practice itself somewhere down the road. If that’s ever happened in your practice, you’ll then view training as being very inexpensive.

Shift the Paradigm

The opportunity to build a great staff is a deliberate, thoughtful process that has plenty of payoff in terms of job satisfaction, lower turnover and practice growth. But simply declaring that employees are assets does nothing to change underlying attitudes. A great staff isn’t built with platitudes; it begins with a commitment to the people with whom you work and a genuine desire to help people grow.

So how are employees viewed in your practice, not only by the owner but by other employees? Are they assets, expenses or liabilities? At the end of the day, each employee walks out the door to go home. What are you doing to ensure they look forward to coming back tomorrow?

Leslie A. Mamalis leads Summit Veterinary Advisors’ equine business consulting services. She is based in Littleton, Colorado.