Friday, July 3, 2015

2015 New Grad Physical Therapy Job Market Outlook

It's called a "Compensation Package."

Say it with me: C-O-M-P-E-N-S-A-T-I-O-N  P-A-C-K-A-G-E.

It's everything. It's your pay grade/rate, your benefits, your perks (fringe benefits), the mentorship program, the CEU reimbursement, the tuition assistance program, the opportunity, the upward mobility, the brand name association, the exposure... everything. It's the whole kit-and-caboodle when it comes to making a judgment call on accepting, rejecting, or counter-offering a job.

But, what's normal? How do I figure out where my baseline is? Well, today you're in luck! Thanks to a #DPTstudent conversation on Facebook, I'm going to share a mid-2015 baseline for the New Grad Physical Therapy Job Market.

Here is..........!!!

The 2015 New Grad Physical Therapy Job Market Outlook

Ahh... fake out! First, there's a LOT I can speak on this topic. In fact, I could probably give a weekend seminar on this. That said, I come at this topic from the perspective of a strategic consultant as well as a former rehab director. To this, I'll highlight the interesting numbers in the top 3 categories of interest. Then, I'll close out by talking about the 6 dimensions of compensation. Enjoy!

1. The Pay
For every business model, there exists a cost of business and acceptable profit margins which they can operate within to hire employees. Those employees must live within the means of their own cost of living and acceptable work-life-balance. Essentially, employees can not cost a business more than they can pay out, and, employees themselves must be willing to work in the conditions given. Thus yields a healthy economic ecosystem.

For Physical Therapy, there are 4 major segments where pay is severely different for operating reasons. They are:
  • Outpatient
    • New grad PT ranges from $27-35 per hour.
    • New grad PTA ranges from $20-25 per hour.
    • On a regional level, the suburbs pay the best followed by urban then rural.
    • On a principles level, outpatient makes 15-25% less than in SNFs.
    • OP makes the lowest revenue per volume, which means scale is severely important. The more capacity and the more patients a business can process in their supply chain, the more money they will make and the more money they are able to pay you.
  • Acute Care Hospital
    • New grad PT ranges from $30-37 per hour.
    • New grad PTA ranges from $22-27 per hour.
    • The same regional & principle variations exist.
    • As hospitals make a lot of money, it's all about the split for them. Which department gets to keep how much of the pie per patient. This becomes a function of departmental leadership clout as well as the general job market. Most places yield a happy medium because of cost of business vs. cost of living. Eventually, no one wants to / can work at a place which pays too little. This means companies end up contracting out very expensive temp staff. After a while, upper management takes the hint and raises the pay grade.
  • Skilled Nursing, Long Term, & Acute Rehab
    • New grad PT ranges from $38-45 per hour.
    • New grad PTA ranges from $27-33 per hour.
    • Again. the same regional & principle variations exist.
    • Generally, PTs make $10/hr more than PTAs.
    • The wiggle room in negotiation has to do with the CFO's operational budget. They have set a profit margin which they basically promised the owners/shareholders which managers must make. The revenue per labor in SNF is the highest and historically (although this is changing) most stable of all the settings. For this reason, this setting pays the best -- along with the fact that this setting is the least "fun" (perk!) to work in... and more frequently than not, has questionable ethical boundaries. (Wait?! Who said that?!)
  • Home Health
    • This is the most variable in pay.
    • Many companies do not pay by the hour; rather, they pay by the service. In essence, you keep a piece of the pie for the work you do. As such, I'll translate out a full time equivalent which again, is highly variable.
    • Example: For a treatment, a PT can earn $60. For an OASIS start of care, they can earn $180. It's not time dependent but completion of service dependent.
    • New grad PT ranges from $40-50 per hour or ~$100,000 if productivity is met.
    • New grad PTA ranges from $30-40 per hour or ~$80,000 if productivity is met.
2. The Benefits

Health Benefits
Health benefits are typically one of three kinds. A classic HMO, a PPO, or a high deductible PPO with an HRA or FSA account. Typically, working for health systems like a hospital base or medical group based company will yield an HMO. The same types of firms will also offer a PPO which means you pay a lot out of pocket until you reach a magic number.

A lot of companies are going lean and are headed towards the High Deductible Health Plan (HDHP). This is excellent for very healthy individuals with no history (including family) who have a low risk lifestyle. The HRA and FSA accounts also offer some tax benefits but may require more calculation... sometimes this means you end up putting money away you never get back.

Retirement
Most companies offer a 401k while some offer a 403b. Regardless, you don't really get a choice. The retirement plan is the plan and the company has made a contract with their wealth management company to provide options in a very specific way. The key is when these plan kick in and how much of it is matched. Companies that tend to pay less tend to match more; it's not uncommon for companies that pay poorly to match 5-8%. In contrast, firms that pay handsomely match none the first year, 1% the 2nd year, 2% the 3rd year, and finally 3% the 4th year of your loyalty to the company. Worth it? Meh... it's free money, right?

Adjunct Insurance
To me, this isn't really important to the new grad. Honestly, there are better options via life insurance agents. In any case, the same deal occurs here. The plan is the plan; you can't really change it or negotiate for it. For the most part, this is just a way for any given firm to be more competitive compared to the next in hopes of retaining or attracting the best talent. This is also a way for a company to protect itself from too much work comp and/or litigious complications. "Hey, we offered... you got disabled on your own." #ClassyOfThem

CEU Reimbursement & Tuition Programs
Some companies will offer unlimited CEUs while others only give a percentage of a couple hundred to a couple thousand dollars worth until you reach a certain level of seniority. Again, the same idea for retirement funds run here -- the better they pay, the less likely they will pay for your education. On the level, most corporations will give you $1000 as a good baseline. $2000 if they don't pay you all that well. If they run percentages, you get 50% of each bill reimbursed the 1st year of loyalty, 75% the 2nd, and finally 100% of all CEU costs the 3rd and going forward.

BEWARE!
Many companies require you work one or two FULL CALENDAR months before benefits kick in. Be VERY clear about this because you may work on the first Monday of a month. However, because that date is say... March the 2nd... you will not get benefits until MAY!!! So, be crystal clear about when benefits kick in and WHY.

3. The Opportunity 
So, this is where I'm going to talk about balance. Every compensation package has 6 dimensions:
  • Pay
  • Benefits
  • Fringe (aka "Perks)
  • Balance (work-life-balance)
  • Culture
  • And, Opportunity
They are coupled in triplets; Pay, Benefits, Fringe (vs) Balance, Culture, and Opportunity. As such, there is an overall value of compensation any business can give. And, in healthcare, particularly in PT, there is certainly a limit. After all, unless creative billing or strained operations is involved... outpatient PTs all have 8 hrs to bill a max of 32 units, right? So... there exists a maximum revenue per labor unless you start taking advantage of the 8 minute rule (another talk for another time).

As such, the higher the pay, the lower the benefits and fringe. The higher the benefits, the lower the pay and fringe. The same exists for balance, culture, and opportunity. For a new grad, opportunity is very important.

The opportunity for new grad who wish to climb the administrative ladder need to pay attention to culture and balance upon interviewing/hiring in. Poor balance leads to stressed out employees and a sad culture (ie. low moral, back stabbing, grumpy people). This environment leads to lots of turn over, and therefore, the opportunity to move up and get that promotion. HOWEVER, you're not immune after the fact. You'll likely burn out just as quickly as your former boss just did. Nevertheless, it is something of interest in getting that early promotion so you can transfer laterally to a more favorable situation.


So...........! My fingers are tired. I hope that answered some questions for you students who have coursework to answer for. I also hope this helps those of you in the process of looking for a job or on the edge of graduation, taking the boards, etc.

As always, if you have ANY questions... I'm only a Tweet or Email away (too tired to link).


So, until next time, I remain yours in service!
-Ben

If you want to learn more about the hiring, applying, interviewing process... here are some links:

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