The recent study by international consulting company Mercer has indicated that the SAVA remuneration rates are approximately fifteen percent below current rates for comparable occupations. The notable exception is remuneration for “senior” veterinarians (i.e. those with 7-8 or more years of experience and the associated responsibility) where SAVA remuneration rates are approximately fifty percent below current rates for comparable occupations. However the latter group is very small compared to the former as most veterinarians with that level of experience have a stake in practices as associates or partners, however this will need to be taken into account in those practices that employ veterinarians with this level of experience. The greatest impact on financial overheads is likely to be remuneration of veterinarians of up to 8 years’ experience. The study also looks at “owner” remuneration, benchmarking remuneration of practice owners, partners and associates against comparable occupations. The latter is there to assist owner veterinarians in setting financial parameters.
In examining the outcome of the study and its integration into the remuneration levels in the profession, our overwhelming aim must be to maximise the health of the profession as a whole, as well as the health of the individuals within the profession. Our profession is plagued by high rates of mental health issues and poor family relationships because we work too many hours for too little remuneration. Increasing our remuneration to levels comparable with those being earned by others with similar skills and training will have a positive impact on the profession. There will be less burnout, less compassion fatigue and greater productivity. There will be more family time, more free time and more stable relationships.
In order to afford the increase in overheads associated with increased remuneration there will need to be a fee adjustment for most practices. The level of this adjustment will vary depending on the individual practice’s overheads. In order to afford a fifteen percent increase in veterinarian salaries, most practices would need to consider a 7.5% increase in fees. This increase is over and above the normal inflation-adjusted increase most practices implement annually. If one was to do this adjustment in one year at current inflation rates it would amount to approximately a 12.5% fee increase for 2018 for most practices. A preferred approach may be to consider a phased approach of approximately 3.25% above inflation increase per year for two years. This would result in a more manageable increase of 8-9% per year including the inflation adjustment.
There are many veterinarians that may be reluctant to increase their fees for fear of losing clients. Although on the surface it may appear to be a legitimate concern, the real economics indicates that this concern is misplaced. One must realise that the maximising client numbers does not equal maximum income and one can actually increase revenue with lower client numbers. In economic terms it is certain that the fees that we have at the moment are on the inelastic part of the total revenue curve (i.e. demand is price inelastic at the fees we presently charge). Some members will just need to take my word for it but for those members who wish to see a more detailed explanation, please see the attachment on the economics of supply and demand. I have also attached a more detailed document on sustainable remuneration for the veterinary profession.
As this study was paid for by you, our members, I wish to receive feedback on the viability of this proposal. We need a vote from each NVCG member. Please participate.