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Keeping Tabs on the Bottom Line

Posted By Christine Shupe, Saturday, February 10, 2018
 

Financial loss in a practice can be attributed to a number of causes and it is not uncommon for 5-10 % or more of total revenue to be lost. Losses take many forms: discounts, missed charges, employee theft and more and they all impact the bottom line. VHMA’s January Insiders Insight survey examined how practices are responding to financial losses and the factors that are considered to identify the cause and extent of the loss.

 

Most practices perform some type of audit to control financial losses. The majority (62%) conduct either regularly scheduled audits and spot checks (43%) or regularly scheduled audits only (19%)  An additional 34% noted that they perform spot checks only. The remaining 4% said that they did not know how financial loss is monitored.

 

Managers can employ a wide array of audit procedures to scrutinize practice finances and respondents were given a list and asked to select all that they use. The most commonly used procedure is the reconciliation of bank and credit card accounts, and close to 90% rely on this simple yet important task.

 

The following were also selected:

88%    Conduct inventory counts

86%    Compare items received to packing lists

86%    Count front door cash and compare to PIMS

83%    reconcile all inventory order paperwork

78%   Count petty cash drawers and compare to what should be there

 

Respondents were least likely to view camera footage (22%).

 

Most have written policies to cover financial loss (67%), but 27% do not.  Those who do not have formal written policies are more likely to rely on spot checks to find financial loss (52%).

 

Financial loss is part of the reality of doing business but ensuring that appropriate systems are in place to prevent loss and regularly reviewing them for effectiveness can help to alleviate the impact of loss on the practice.

 

 

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Building A Healthier Workplace

Posted By Christine Shupe, Wednesday, December 20, 2017

It’s hard to argue against implementing programs that support healthy lifestyles and offer incentives for employees to improve their emotional, social and physical well-being.  After all, employees who are not encumbered with wellness concerns are likely to be happier and more productive.

 

VHMA’s recent monthly management survey asked managers whether their practices offered employee-sponsored wellness programs. Although 171 individuals responded, only 30% indicated that their employers backed workplace wellness programs and 70% reported that wellness initiatives were not available.

 

Being aware that employers, rather than offer full-fledged wellness programs, may be more likely to support occasion wellness activities, the VHMA survey also asked respondents if team activities that promote wellness are available in the practice. The results were similar: 32% sponsored wellness team activities and 68% do not.

 

The good

 

Asked to describe a wellness program, service or activity that was successful, more than half (60%) did not respond to this open-ended question. Forty percent provided details.

 

By far the most prevalent wellness benefits are group events and bonding experiences hosted by the practice and designed to unite staff (38%). Activities ran the gamut from sports to fundraisers and included: fun runs, paint ball games, off-site dinners and more. Nineteen percent said that the employer offered Employee Assistance Programs. Twelve percent reported that employees have access to lectures, workshops and programs that address personal issues employees may be struggling with. Eight percent benefitted from free gym memberships.  The remaining responses were one-off and included: smoking cessation, free flu shots, a wellness bonus and more.

 

The not so good

 

When asked what programs or activities were not successful, only 25 respondents or 15% of the entire survey population provided answers. Of these respondents, 36% reported that team building activities were not successful because employees were reluctant to spend their off hours engaged in “work” related activities. Twenty percent noted that efforts to encourage employees to use free gym membership and other health/exercise initiatives did not meet with the anticipated participation and enthusiasm. Sixteen percent characterized their EAP programs as failures.  Remaining respondents pointed to a smattering of initiatives that did not pan out, including smoking cessation, wellness pay and healthy snacks.

 

Although only 30% said that their employers supported wellness programs, 67% believed that the employer should be offering wellness as an option and 9% said that the employer should not offer wellness initiatives. These responses, however, reflect the opinions of respondents and not the desires of employees. Only 9% of respondents said that the practice had surveyed staff to determine interest in wellness programs and 87% had not raised the issue with staff.

 

Wellness programs have the potential to be an effective resource for employees and a way for employers to create a more supportive and collegial work environment. Although designed with the best intentions, employers must be mindful of some of the impediments to employee participation. The first step toward creating effective programs is to work directly with employees to determine what they need and the conditions under which they will use employer- sponsored programs.

 

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Stay, just a little bit longer (and take our exit interview)

Posted By Christine Shupe, Tuesday, November 28, 2017

The exit interview is a valuable tool both diagnostically and strategically. Diagnostically, it can reveal important information about the factors that influence an employee’s decision to move on. Strategically, the information can be used to actions to improve the work environment.

 

In November, the VHMA surveyed practice managers to determine whether employers, managers and supervisors survey employees when they leave their jobs. Of the 275 individuals who responded to the Insider’s Insight survey, 63% said that they conduct exit interviews and 37% revealed that they do not.

 

Seventy-seven percent of those who interview departing employees report that they survey all employees, regardless of tenure or position. Twelve percent survey long-term employees, although respondents did not define “long-term.” Ten percent selected the “other” response and identified the conditions under which they conduct an exit interview, including: when employees agree to be interviewed, when employees leave voluntarily and  when interested in gaining insights from employees whose opinions are valued. Several respondents added that they only conduct the interview if there is time to fit it in.

 

Face-to-face interviews are the most common way to conduct the exit interview (91%), however, 9% administer electronic surveys and 5% prefer teleconferences. Among the 13% who reported they rely on a technique not listed in the Insider’s Insight survey, the majority say they circulate a hard copy of a survey that former employees can complete and return when convenient.

 

Ninety two percent report that they use the data obtained in the exit interview to make changes in the practice. Five percent report that the information is not used and 3% do not know what becomes of the data obtained in the interview.

 

Of those who use the information, 67% say that they use it to develop out-of-the-box ways to improve the practice. Eight percent say the data is helpful in evaluating staff compensation. Of the 22% who selected “other,” approximately half (10%) report that the information is used to make changes in all of the areas identified in the response categories (compensation, benefits, discounts and out-of-the-box solutions).

 

In general, exit interview data is available to those in upper management and may be shared among owners, managers and supervisors--- the employees most likely to influence practice policies.

 

As for the reasons why employees leave, of those who conduct exit interviews, the top three reasons cited are as follows: to pursue another career (45%), for personal or family reasons (29%) and to land a higher paying job (29%). Among those who do not conduct exit interviews, the top three responses are similar: to pursue another career (34%), to land a more lucrative job (27%) and for personal issues (20%).

 

The most significant difference between those who do and those who do not conduct exit interviews, is that those who do not schedule interviews are more likely to report that employees leave because they do not fit with the practice.

 

When it’s time for staff to move on, before saying farewell, be sure to make time for an exit interview. The practice may gain important information about how it can improve and employees will leave feeling good about their service.

 

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Pet Perks Complement Employee Benefits in Veterinary Industry

Posted By Christine Shupe, Wednesday, October 25, 2017

Landing a job isn’t only about the work. A competitive salary and benefits are important considerations, but other perks can increase employee satisfaction and loyalty. VHMA surveyed veterinary professionals to uncover specific details about discounts and benefits routinely offered to employees. VHMA received 274 responses.

 

Overall, employers in the veterinary industry offer a range of perks to their employees, the most common being discounts on services identified by 96% of respondents and discounts on products, selected by 95%. More than half of the respondents (58%) report that they receive free products and/or services. Respondents were given the opportunity to list additional perks that they did not feel were covered by Discounted and free products and services. A sample of the comments include annual stipends for pet care, pet insurance and products at cost, to name just a few.

 

Only one respondent indicated that products and services are not discounted for employees.

 

Discounts for products, as reported by 53% of respondents, tend to be 41% or more. Specifically, the breakdown is as follows:  28% receive a discount greater than 50% and 25% report a discount that is between 41-50%. Twenty percent report a 16-20 % discount for product.

 

Employees receive a slightly lower discount for services. A significant number of respondents (36%) say they receive a 16-20% discount, 27% have access to a discount of 41-50% and 26% enjoy a discount greater than 50% on services.

 

While discounts are good, free is even better. In general, 77% of respondents receive a free benefit or service from their employer. Twenty-three percent work in offices that do not offer any free products or services.

 

Fifty-three percent report that the office provides free examinations. Trailing far behind are free office call, vaccinations (5%), hospitalization (4%) and dental procedures (3%).

 

A handful of services were identified as free by one or two respondents and include injections, treatments, anesthesia, laser therapy, ultrasounds, euthanasia and cremation, daycare/boarding, lab work, fecal and gland expression, grooming and vendor samples, to name a few.

 

And while they may not be free, in an open ended response, respondents described additional perks of employment like, deep discounts on surgeries and $0.50 per hour worked deposited into a pet savings account for pet care.

 

Pet care perks can help to attract and retain employees. These perks should be reviewed periodically to determine whether they are relevant to employees and competitive with other practices.

 

As most practice managers and owners know, the IRS has regulations governing the tax treatment of employee discounts. These regulations apply to all kinds of businesses, including veterinary practices and they are not a new thing. If the discounts offered by a practice exceed those allowed by the IRS, the amount of the excess discount is to be treated as taxable income to the employee. Each practice should

consult their tax advisor for more information on this topic.

 

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Taking a Strategic View of Practice Success

Posted By Christine Shupe, Thursday, September 21, 2017
 

Growing a business is a lot like treating a patient: A proper diagnosis and a treatment plan can have a positive impact on the patient’s health and well-being. For veterinary practices, the strategic plan can help to diagnose the state of the practice and identify goals and objectives that will ensure future success.

 

To determine whether practices rely on strategic planning, the Veterinary Hospital Managers Association (VHMA) released a survey that was completed by 170 veterinary professionals.

 

The majority of respondents (67%), report that their practice relies on a strategic plan and 32% do not. Respondents whose practices have not adopted strategic plans speculate that it is because supervisors lack interest or follow through in planning activities (50%), owners do not support strategic planning (46%), time constraints make planning difficult (34%) and leadership lacks the skills and/or resources to spearhead the planning process (24%).

 

Of the practices in which a strategic plan is used, 73% of respondents describe the plan as informal, while 27% report that the plan is a formal document.

 

When creating a strategic plan, identifying strengths, weaknesses, opportunities, and threats (SWOT) is an important exercise to develop the strategies that can help a practice improve and grow. The SWOT analysis helps to create the roadmap for success. It is not surprising that 60% of respondents with formal strategic plans have been involved in a SWOT analysis planning session. Sixty percent of respondents whose plans are characterized as informal have participated in a practice-led SWOT planning session.

 

All respondents with formal strategic plans say that the plan is documented or written compared to 30% of those with informal plans.

 

Based on the overall results, the practice owner and manager (45%) and leadership team (41%) are the staff members most often involved with developing the strategic plan. When the responses of respondents with formal plans are analyzed, the results reveal that all staff members (37%) participate in creating the plan. Among this subset, practice owner and manager (35%) and leadership team (30%) are also involved in the planning process.

 

Once the planning document is created, 60% of all respondents share it with the entire staff.

 

Forty-two percent of respondents report that the strategic plan is designed to cover a combination of time periods, including: short-term (2 years or less); mid-term (2-5 years); and long-term (5 plus years). Twenty-six percent indicate that their plan focuses on the mid-term, 25% say the plan emphasizes the short term and 6% have adopted long-term plans.

 

The issues that are addressed in the plans tend to be the same across the board and include facility growth (85%), staffing (78%), equipment and/or technology (75%), and product and service pricing (70%).

 

A critical step in any planning process is monitoring and evaluating progress toward goals. By neglecting this step, the document is relegated to a back shelf to gather dust. How frequently the plan is evaluated is often tied to the rate of change within the organization. Among respondents, 41% evaluate and monitor the plan annually and 39% schedule quarterly reviews. A much smaller percentage monitor monthly (17%) or weekly (4%).

 

Strategic planning, whether formal or informal, is not a one-time event. It is an ongoing process that must be evaluated and adjusted if an organization is committed to effectively confronting and adapting to future challenges.

 

 

 

 

 

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