Negotiating your contract as an optometrist is an art.
As a new graduate OD, it’s pretty safe to assume you aren’t exactly a pro when it comes to effectively negotiating compensation, benefits, paid time off, and a number of other important details in an employment contract.
And honestly, why should you be?
You’re not a lawyer, (or Francis Underwood from House of Cards) and negotiating is not exactly an innate skill. With this in mind, I decided to interview Dr. Mark Phebus from 20/20 Consulting to learn more about his journey into helping new grads best negotiate their employment contracts to achieve fair market value.
Tell me about yourself.
Born and raised in Indiana most of my life, I attended Indiana University for both undergraduate and optometry school. I’ve always had a curious mind and an overall passion for learning. With this in mind, I enjoy networking and helping others.
That is why 20/20 Consulting has been so much fun for me.
It’s that enjoyment I get by empowering my fellow colleagues that really drives me.
How did you get into providing advice on contract negotiations?
In all honestly, it started from me learning from my own mistakes. In fact, I made the mistake of not negotiating my first contract. My next two job offers I negotiated pretty aggressively and I enjoyed the process. From there, I quickly learned that not many of my peers feel the same way about enjoying negotiating.
Shortly thereafter, I ended up helping a good friend of mine with her contract.
She was scared to negotiate for fear of seeming greedy and having her job offer rescinded.
However, after careful market analysis and coaching, she really enjoyed the process and ultimately accepted an offer significantly higher than the original offer. Through helping her and from my own experience, I realized I had an idea for a company that could help a lot of students/residents/young ODs negotiate their employment contracts.
How is negotiating contract benefits with a private practice different than doing so with a corporate entity?
Every contract is unique and all have room for improvement.
The employer’s willingness to negotiate is another issue entirely. Typically though, the main difference between a corporate and private contract is that corporate companies tend to provide stronger medical, dental, and retirement benefits. Some private contracts offer those benefits as well but you have to negotiate them a bit differently with the changes that the Affordable Care Act has brought.
With corporate contracts there is more room for negotiation on signing and retention bonuses, which very few private contracts will include.
Where do you look for current market trends and research to assist you in your analysis of what is considered fair pay and benefits?
Benefits are benefits. If you have them it’s fair, if not, that is where negotiating can greatly increase the value of your contract.
Fair pay is a different deal all together because of regional and state variations as well as saturation within a specific area. I compare all my clients with previous contracts that I have negotiated and detailed market research of my own.
Is it possible to negotiate a change in status from independent contractor to employee? How do you go about this? Is it more common to be paid as an independent contractor or employee?
Of course it is. Everything is up for negotiation as long as you are prepared and the employer is willing. You have to be knowledgeable enough to understand what that change means for both yourself and for the employer.
Benefits in particular is where the change most affects the employer due to the recent changes with the Affordable Care Act (ACA). Tax withholding for social security is the other key difference.
Honestly, I don’t know that one is necessarily more common than the other. It all depends on the amount of days worked, benefits provided, and an understanding of the difference.
Have you ever experienced a situation where demanding more pay has cost a job offer to be rescinded?
That is a great question.
And no. It is important to remember that negotiating is expected of you, yet only about 1 in 3 millennials ever ask. You can learn a lot about your employer when you negotiate. If the employer is disgusted enough to pull an offer when negotiation begins, then you are probably better off not working for them.
When is it reasonable to expect an employer to pay your medical benefits?
It is reasonable when you are a full-time, W-2 employee (minimum 32 hrs/week). But it can be negotiated prior to 32 hrs if you are part-time.
This goes back to understanding the changes associated with the ACA. No longer can an employer provide benefits to one employee (i.e. the doctor) and not another employee (e.g. technician or optician).
Is it possible to negotiate employee retirement plans? What kind of retirement savings plans should ODs be asking for?
Typically retirement plans are already set up prior to the hire of a new OD. This question piggybacks on the previous question as this is a benefit that cannot be offered to doctors only.
Because of that, an employer will work with their accountant/financial adviser t
For the most part, any retirement plan provided by the employer is a good thing.
Most employers will do a 3% (of the annual gross salary) match. Some offer a vesting match up to 6% which incentivizes the employed OD to stay with the practice for the period of time required to keep the vested money.
As far as what you should be asking for, I am not a registered financial adviser so I try to provide facts and not recommendations within this category.
Why is negotiating so important?
An initial offer is the compensation that the employer hopes you will work for, not what they are willing to pay. You have to realize that whoever you are dealing with likely has 20-40 years of experience on you, or is a trained professional at negotiating (as is often the case for corporate jobs).
Money isn’t everything and a higher compensation won’t make a bad job good, but it can make a good job great!
Tip: According to Business Insider, avoiding salary negotiations throughout your career means losing out on roughly $1 million dollars over the course of your life.
That figure is staggering and hopefully motivates everyone to be more aggressive when negotiating their next contract!
It sounds like everyone has room for improvement! Any final advice?
Negotiate because you are worth it! We have all chosen an excellent profession with optometry, and we need to take pride in the patient care that we provide by valuing our time and services. If anyone has any questions at all, feel free to reach out to me and I’d be happy to help!