New job bonus negotiation

[nexus73]

I'm in a market with not enough psychiatrists (which is all markets but this is pretty bad). At my job currently we've been trying to recruit an inpatient doc for about 18 months with no luck. Another hospital in the area has reached out to me offering a slightly lower rvu rate but better work life balance. They have a sign on bonus of $20K. I've requested a 4 year retention bonus ($20K per year x 4 years), which is what my current employer is offering new hires. So far the other hospital has balked...

The supply of psychiatrists seems extremely low right now especially for inpatient. I'm wondering what kind of offers people are seeing out there currently, rvu rates, sign on bonuses, on call pay, CME funds, etc, so I can have a better sense of what might be reasonable. My BATNA is staying at current job which is fine, so if they can find another doctor it's ok, but I'm guessing they'll have to bring in locums just like we're doing as we haven't been able to recruit anyone either.

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[Merovinge]

So keep in mind that money and total compensation is fungible. Knowing what bonus someone is getting is actually irrelevant, all that matters is their total annual compensation and benefits. Someone could offer you $100,000 retention each year but if the base salary was $150,000 with bad benefits then the job would lineup poorly compared to the market. Separating out on-call pay or CME can be nice from a cognitive standpoint (I got paid $300 to take this 3am call, this course was free to me) but again is entirely immaterial to the financial package, all that matters is the total of what you get paid each year.

You are not listing your base pay, other bonuses, RVU rate/target, PTO, other benefits, or geographic location so it will be difficult for anyone give you an idea what you can expect. You can always contact a contract review service for physicians and check to see if they have done any contracts in nearby or your same location to provide you the most accurate comparison.

 

[dl2dp2]

LOL. I *always* ask the rhetorical question: if an open position is open for 18 months and still hasn't been filled, does it really need to be filled?

Your local hospitals are taking advantage of you. Sadly, you are at no position to hardball as it seems that you are not able to truly cast a wide net because I'm guessing you don't want to move.

20k sign-on bonus is literally a drop in a bucket. If any facility balks at *that* it really just means it's not interested in hiring a full time. As I said in another thread, you can make 20k 1099 in *two weeks*. A reasonable sign-on would be 50-100k PER year.

 

[nexus73]

LOL. I *always* ask the rhetorical question: if an open position is open for 18 months and still hasn't been filled, does it really need to be filled?

Your local hospitals are taking advantage of you. Sadly, you are at no position to hardball as it seems that you are not able to truly cast a wide net because I'm guessing you don't want to move.

20k sign-on bonus is literally a drop in a bucket. If any facility balks at *that* it really just means it's not interested in hiring a full time. As I said in another thread, you can make 20k 1099 in *two weeks*. A reasonable sign-on would be 50-100k PER year.

It’s not an unfilled position actually. It’s filled with a locums that costs a kings ransom. So the hospital is very much wanting to fill it with an employed doctor at fair market value. Your other point about $20k sign on being a drop in the bucket is well taken. And it’s less about not wanting to move but more about not needing to as my current job is ok but the other place has some intangible benefits and if I could add another $80k over 4 years without having to do any extra work it would be worth a transition.

 

[dl2dp2]

It’s not an unfilled position actually. It’s filled with a locums that costs a kings ransom. So the hospital is very much wanting to fill it with an employed doctor at fair market value. Your other point about $20k sign on being a drop in the bucket is well taken. And it’s less about not wanting to move but more about not needing to as my current job is ok but the other place has some intangible benefits and if I could add another $80k over 4 years without having to do any extra work it would be worth a transition.

Yes, but I'm confused as to if this is the case, why wouldn't the staff physicians collectively all quit and just work locum instead? And if the hospital REALLY cared about this cost differential, why wouldn't raise the staff salary ABOVE "fair market value"?

None of this makes sense and strikes me as administrative BS. The REAL situation is existing staff physicians are sufficient in covering the non-locum clinical work, and nobody cares enough to pay to recruit new staff the *right* salary for the locum clinical need. This situation, btw, is very common in a facility-based job (esp. "legacy" facilities, i.e. academic/public/large nonprofit facilities). Once you sit in a job it's often hard for you to leave, so the hospital takes advantage of this situation. But if you quit, it's often very hard to fill the same person with the same salary. I always find it interesting that this is so common in psychiatry because in other specialties, you would have a physician group taking contracts and collectively bargain.

 

[nexus73]

Yes, but I'm confused as to if this is the case, why wouldn't the staff physicians collectively all quit and just work locum instead? And if the hospital REALLY cared about this cost differential, why wouldn't raise the staff salary ABOVE "fair market value"?

None of this makes sense and strikes me as administrative BS. The REAL situation is existing staff physicians are sufficient in covering the non-locum clinical work, and nobody cares enough to pay to recruit new staff the *right* salary for the locum clinical need. This situation, btw, is very common in a facility-based job (esp. "legacy" facilities, i.e. academic/public/large nonprofit facilities). Once you sit in a job it's often hard for you to leave, so the hospital takes advantage of this situation. But if you quit, it's often very hard to fill the same person with the same salary. I always find it interesting that this is so common in psychiatry because in other specialties, you would have a physician group taking contracts and collectively bargain.

Something about fair market value, median numbers from salary surveys, etc etc. preventing higher pay. My assumption on the lackluster recruiting is our compensation is low considering the locale and people can make more elsewhere. Or they can make the same or even less but in a more desirable area. It’s impressive seeing what they will pay locums but won’t raise employees salaries 10-15% to improve recruiting.

 

[J ROD]

I would ask for more base compensation. and take the one time 20K bonus with limited information provided. I work strictly wrvu and prefer it because I get paid for the work I do.

 

[splik]

Something about fair market value, median numbers from salary surveys, etc etc. preventing higher pay.

Anytime you here this, it is double speak for "we don't want to pay you what you are worth." Fair market value according to IRS is the negotiated agreement to terms between a willing buyer and a willing seller under conditions of no duress and where each party has full knowledge of relevant fact. Sometimes FMV is conflated (with deliberate deception) with Stark Law and the Anti-Kick Back Statute (the two are often conflated themselves). However they are very different, and it would be very unusual for psychiatrists to be in a position where they would be violating Stark Law or at risk of being perceived to be getting a kick back.

I am in 99%ile for AAMC compensation for psychiatrists at my academic rank and geographic location and no one is concerned about it looking like there is a violation of Stark Law and the Anti-Kick Back Statute because the idea is entirely preposterous. This nonsense about FMV or median salaries are tactics to block negotiations. 50% of docs make above the median salary. Clearly no salary surveys, vagaries about FMV or Stark law etc are preventing high pay for them.

 

[deleted1100659]

Fair market value...So if an offer was fair market value, why arent more people jumping at it? Fair market value goes off supply and demand.

Look at the chip shortage. The demand for cars is high and the supply is low. How much does it cost to buy a car right now?

Exactly.

Agree it all sounds amin double speak, I swear these people are all trained in the same tactics, most of them were probably former used car salesmen or MLM salespeople.

Im in the market for a new job myself right now, but taking my time because new ones do pop up, and its always possible to jump into a worse situation. They need you probably more than you need them. If their offer was so fair/generous then the job would be filled right now

 

[FlowRate]

At the moment, the fair market value for that job is what they're paying the locums company for the locums doc. They could probably split the likely $200k+ difference in staff salary and locums company pay. I could see some sort of arcane accounting argument that staff salaries are long term fixed costs but locums being considered some sort of other expense but that's probably just a fancy way of dressing up admin silliness.

 

[nexus73]

At the moment, the fair market value for that job is what they're paying the locums company for the locums doc. They could probably split the likely $200k+ difference in staff salary and locums company pay. I could see some sort of arcane accounting argument that staff salaries are long term fixed costs but locums being considered some sort of other expense but that's probably just a fancy way of dressing up admin silliness.

And the silly thing is at what point does locums become a long term cost? We've had a locums for 18 months. I'm sure there are places that have had locums for several years and the hospital certainly would have benefitted from bumping up the salary $30K to attract an employed psychiatrist. $30K increase across 6 physicians is only $180K/year, while I'm told a locums cost approaches 1 million dollars per year.

 

[littlefred]

And the silly thing is at what point does locums become a long term cost? We've had a locums for 18 months. I'm sure there are places that have had locums for several years and the hospital certainly would have benefitted from bumping up the salary $30K to attract an employed psychiatrist. $30K increase across 6 physicians is only $180K/year, while I'm told a locums cost approaches 1 million dollars per year.

Be mindful of the fact of why they can't retain physicians. Usually it's not about the money and more to do with the job itself (leading to physicians not wanting to be there for more than a year and locums are good at filling these spots for a certain period of time).

 

[deleted1100659]

side note do any of you do locums jobs? whats your thoughts on those, since they seem to pay more?

 

[nexus73]

To refocus, I guess I'm curious if people are getting multi year retention bonuses? Like $20K sign on is fine. But if I can get that extended out yearly for 3 more years even better.

 

[FlowRate]

To refocus, I guess I'm curious if people are getting multi year retention bonuses? Like $20K sign on is fine. But if I can get that extended out yearly for 3 more years even better.

I think sometimes this is packaged as a large up-front sum that you have to repay if you don't stay for the agreed number of years. IMO otherwise you're better off asking for a salary bump if you think there's a chance you'll want to stay past the incentive years.

 

[Merovinge]

I think sometimes this is packaged as a large up-front sum that you have to repay if you don't stay for the agreed number of years. IMO otherwise you're better off asking for a salary bump if you think there's a chance you'll want to stay past the incentive years.

Correct. Retention bonus is just a way of saying we are paying you too little of a salary and we will shift it to the end of a 12 month period so if you leave before then you take a haircut on the way out.

 

[nexus73]

Correct. Retention bonus is just a way of saying we are paying you too little of a salary and we will shift it to the end of a 12 month period so if you leave before then you take a haircut on the way out.

I agree with this potential, a bonus to offset a too low salary. What I'm facing is a job paying $67.50/wRVU, which seems reasonable, not the highest, but better than many jobs I hear about here and on other message boards. There's no way they'll increase the wRVU rate for me and not the whole group. So if they're willing to pay a multi year retention bonus it's nothing but a benefit for me, as there's no way to increase my salary, it being locked in by median rates on salary surveys.

My current job offers a $20K per year bonus, paid out at the beginning of each year for four years. After you receive the $20K, each month you continue to work basically satisfies the work requirement for 1/12th of the money. So if you work for 6 months then leave, you have to pay back $10K. If you work 11 months and leave you pay back $1667.666 (1/12th of $20K). And it's setup as a loan so there is a small interest payment tacked on for the amount you pay back. But after 12 months you've satisfied your end then they give another $20K for the next year and so on for 4 years total.

 

[dl2dp2]

I agree with this potential, a bonus to offset a too low salary. What I'm facing is a job paying $67.50/wRVU, which seems reasonable, not the highest, but better than many jobs I hear about here and on other message boards. There's no way they'll increase the wRVU rate for me and not the whole group. So if they're willing to pay a multi year retention bonus it's nothing but a benefit for me, as there's no way to increase my salary, it being locked in by median rates on salary surveys.

My current job offers a $20K per year bonus, paid out at the beginning of each year for four years. After you receive the $20K, each month you continue to work basically satisfies the work requirement for 1/12th of the money. So if you work for 6 months then leave, you have to pay back $10K. If you work 11 months and leave you pay back $1667.666 (1/12th of $20K). And it's setup as a loan so there is a small interest payment tacked on for the amount you pay back. But after 12 months you've satisfied your end then they give another $20K for the next year and so on for 4 years total.

You should ask for higher. If you ask 20k they come back with 10k and you are stuck.

Multi year retention packages typically are MUCH more than 20k per year. Focus on value: it costs them much more than 20k a year to replace you.

 

[Merovinge]

I agree with this potential, a bonus to offset a too low salary. What I'm facing is a job paying $67.50/wRVU, which seems reasonable, not the highest, but better than many jobs I hear about here and on other message boards. There's no way they'll increase the wRVU rate for me and not the whole group. So if they're willing to pay a multi year retention bonus it's nothing but a benefit for me, as there's no way to increase my salary, it being locked in by median rates on salary surveys.

My current job offers a $20K per year bonus, paid out at the beginning of each year for four years. After you receive the $20K, each month you continue to work basically satisfies the work requirement for 1/12th of the money. So if you work for 6 months then leave, you have to pay back $10K. If you work 11 months and leave you pay back $1667.666 (1/12th of $20K). And it's setup as a loan so there is a small interest payment tacked on for the amount you pay back. But after 12 months you've satisfied your end then they give another $20K for the next year and so on for 4 years total.

I see, so your pay is 100% RVU and then this is money added on top to sweeten the deal. That pay per RVU is actually great if you are an OP practice that is generating the new RVU numbers and billing add-on psychotherapy codes. I'm not sure I would be worried about retention at all if you can just maximize your support and practice, seems pretty attainable to make around 6 RVU's/hour - no shows is still well into the $300+/hour which is extremely reasonable for an employed job.