Before we dive into the best way for doctors to ask for a raise, I wanted to check the findings of the authoritative Medscape Physician Compensation Report of 2023. The subheading of the report is “Your Income vs. Your Peers,” which seemed like just the information I was looking for.
Two of the three trends they listed in this year’s compensation report were germane to the subject at hand:
- An improvement in gender-based pay disparity
- A general increase in physician pay
Encouragingly, “physician compensation is still on the rise.” The 2018 report showed “overall physician compensation at $299,000,” while this year’s report showed the overall compensation for physicians stood at $352,000.
Mike Belkin, J.D., a divisional vice president at Merritt Hawkins, a physician recruitment firm, weighs in on salary expectations:
“We expect physician income to continue increasing, as everyone talks about a physician shortage, which the pandemic has exacerbated.”
In spite of this good news, cuts to Medicare and “somewhat stagnant reimbursement relative to the cost of practice” have caused the income levels of many doctors to decline. Reasons given for this decline included the following:
- “I had a pay cut in base salary.”
- “I did not make my bonus.”
- “Our practice was acquired by venture capital firms; they slashed costs.”
- “Decreasing Medicare reimbursements and poor payor mix destroy our income.”
As for the job outlook for doctors and physicians, the U.S. Bureau of Labor Statistics suggests that “overall employment…is projected to grow three percent from 2021 to 2031, slower than the average for all occupations. Despite [this] limited employment growth, about 23,800 openings for physicians…are projected each year, on average, over the decade.”
Primary care is expected to experience a physician shortage of between 17,800 and 48,000 by 2034, with nonprimary care specialties of between 21,000 and 77,100 in the same time frame. All this research seems to suggest that there is reason to be optimistic about the potential of receiving a raise.
Of course, with these statistics in mind, the course of asking for and getting a raise is not as simple as waltzing into your boss’s office and declaring you’d like a pay hike and are sure you’re worth it. It takes work to get a strategy in place that will give you the best chance of achieving your goal.
Develop A Strategic Plan Before You Set Up A Meeting
Asking your boss for a raise can be intimidating for most people, but developing a strategy before you sit down at the table will significantly lower the stress you feel during the meeting. Having this in your back pocket makes it so much easier to say, “Hey, it’s been a while since we discussed my compensation. Can we review it?”
I read somewhere that ” the person with the most information is the best equipped to get results that benefit them.” This seems true across the board, especially when it comes to setting up a meeting to ask for a raise.
Here are four parts to developing a comprehensive strategy before you set up a meeting. Obviously, you won’t need to share or even refer to everything listed below, but you’ll be in the best position to answer any and all questions posed to you if you have these tips and information at the ready.
- Time your ask right
- Think like your boss
- Understand the big picture
- Make the case for you
Time Your Ask Right
The truth is, no matter how good you are, there may simply not be enough funding to allow your employer to give you a raise. Considering the timing of your ask before setting up a meeting.
The first thing to consider is how financially healthy the company is currently. While you may not have access to the private financials, you can take the temperature of the company.
Has the company recently laid off staff? Have bonuses been suspended? This may not be the best time to bring up the topic of a raise.
The traditional time to ask for a raise is at your quarterly or semi-annual review. A better time might be when funding has just been reviewed and approved. You can ask the finance department when this is.
Next, time your ask when your performance is at its peak. Are your patient encounters high? Were you recently recognized for an accomplishment or award or because you completed a major project?
Tip: Fridays are the best day of the week to ask for a raise. “Steer clear of Mondays, which are notorious for producing negative, tense moods,” says Shannon Kolawkowski, PsyD, a psychologist from Seattle.
Tip: A good time to bring up the topic of compensation is about two or three months before the end of your contract.
Think Like Your Boss
Before making a case for why you deserve a raise, put yourself in your boss’s shoes to identify their priorities for the company. The first priority of any organization is its bottom line — every other priority stems from there.
Another way to think of this is — what’s in it for them? Would giving you a raise ensure they would have a reliable staff member on their team? Would paying you more keep you loyal to your work with them and stop the company from losing a valued employee they would then need to replace?
What does success look like for the company? Tie your reasons for asking for a raise to what’s good for your boss to create a win-win scenario.
If you aren’t sure you can speak authoritatively to the goals and objectives of the organization you work for, do some homework and familiarize yourself with their current position and future plans.
Tip: Help the boss achieve their goals and objectives. Explain your future work plans and how they will help the company meet its objectives.
Understand The Big Picture
Know what’s reasonable to ask. Standard pay increases tend to range from the average (3%) to exceptional (5%). You can ask for a 10-20% increase, which can be a way to open negotiations depending on the reasons you give.
“The higher the percentage you request, the better your reasons [for the raise] should be.”
You’ll also want to familiarize yourself with what competitive salaries look like in your geographic area and how they compare to your level of experience. Check sites that provide accurate compensation information, like the American Medical Association (AMA) or the Medical Group Management Association (MGMA). You can also sign up for free at Doximity, a professional medical network for physicians.
Popular sites like Salary.com, Payscale, Linkedin, and Glassdoor tend not to be as accurate when predicting the salary range you qualify for in your area. Your market value (formerly called “ZOPA” — zone of potential agreement) determines the range of salary you consider to be acceptable.
A typical anchor number starts at 75%, and your minimum acceptable offer is typically the mean. Above the 75th percentile is an excellent offer, and above the 90th percentile is a “superior offer.” As a rule of thumb, most people make their anchor number 20% away from their desired range.
If you’re unsure what your anchor number should be, ask your peers who work in similar roles and companies how much they make. It may feel awkward to ask someone about their salary, but there are ways to phrase the request to make it less personal and more about conducting the necessary research.
Make The Case For You
Employers are primarily concerned with their bottom line, and there are three points you’ll want to make sure you address during the conversation:
- Money you’ve made and saved for the company
- Other value you’ve brought
- What you plan to bring in the future
The first point is likely to pack the most powerful punch — the money you’ve made and saved for the company — what your contribution to the bottom line has been. How has the company directly benefited from your work and contributions?
You’ll need to be specific. This is a great time to present data and numbers such as:
- The number of patients you’ve seen per day and the subsequent increase in revenue
- Any increased revenue created through the introduction of new revenue streams or procedure performance, contribution to quality metrics, and patient satisfaction
- The extra time you’ve put in by covering shifts for sick colleagues or any other way you work extra in order to ensure things go smoothly.
It’s also important to provide any other value you’ve brought in the period before asking for a raise. This information should include:
- Patient testimonials
- Colleagues and resident reviews
- Accomplishments from the past six months, the past year, and your time with the company
Set up a folder on your computer to store notes from clients, your colleagues, and your boss where you’ve been commended for doing a great job. Schedule time for each to conduct a “self-evaluation,” the results of which can be invaluable when you’re negotiating a salary raise.
Now that you’ve painted a clear picture of what you bring to the organization, it’s time to communicate what you plan to bring in the future.
If you have any future initiatives that will benefit the company, let them know about them. When employers pay you more, they want to know that they are getting more in return. You demonstrate your commitment to the organization by continuing to push ahead and adding value.
Tip: Improve your negotiation outcomes by having an open and team-oriented attitude. Coach your language in positive terms and speak in terms of alignment with your employer.
Tip: Create a handout that summarizes your request and includes supporting documents.
Develop Your Plan B
Even if you get a negative response to your request for a raise, it doesn’t need to be the end of the negotiation. Now that you’ve established a thorough understanding of the company’s goals and priorities and what you contribute to its well-being, you can suggest ways to get extra compensation other than with a higher salary.
Some ideas for non-salary compensation you can ask for include:
- Additional paid vacation days
- Increased job flexibility
- Performance bonuses
- Retention bonus: A one-time bonus gives additional compensation without locking the employer into an ongoing salary increase
- Gadgets that can be written off as a business expense
- Cover business costs:
- Medical license
- Board certification
- Subspecialty credentials
- Staff dues
- CME activities
- Cell phone contracts
- Gym membership fees
The Difference Between Men And Women In Negotiating A Pay Raise
Even with “an improvement in gender-based pay disparity,” there’s still a significant difference between men and women when it comes to negotiating a raise. New research suggests that “the problem doesn’t necessarily stem from women’s lack of negotiating skills.”
Female negotiators face a “double-edged sword.” If they aren’t aggressive in their negotiations, they don’t tend to get as much as their male counterparts, but if they do negotiate more aggressively, they can often face a backlash as most people don’t feel it’s appropriate for women to behave aggressively.
When men negotiate their salary, they have the mindset of “winning” a competition. When women anticipate having a compensation discussion, they view it as “going to the dentist.”
Again, Medscape’s physician compensation report spoke to this issue. Male primary care physicians earned about 25% more than female PCPs last year. This year, men are earning 19% more, the lowest gap in five years.
Create An Exit Strategy
As an entrepreneurial physician, I love a quote I recently read by Cameron Keng. He said:
“As an individual, you’re a CEO of one, and you have a duty to maximize your profits.”
And while it’s never a good idea to give your employer an ultimatum when negotiating a raise, there are times when you need to consider if it’s time to move on to another position that will better serve your “company of one.”
Tip: Before you sign a contract for any job, have a lawyer take a look at the document. It’s important to fully understand the provisions in the contract and to ensure they don’t constrain or restrict your ability to negotiate future contracts or even the freedom to practice elsewhere.
If you find yourself looking to relocate for a higher salary, check out the top-earning states for physicians. Four out of the 10 top-earning states this year were also on last year’s list:
- Wisconsin
- Indiana*
- Georgia
- Connecticut*
- Missouri*
- New Jersey
- South Carolina
- Florida*
- California
- Michigan
*On last year’s top-earning states list.
The states anticipated to have the largest physician shortages by 2030 include:
- California
- Florida*
- Texas
- Arizona
- Georgia
*Florida tends to pay high as it has a retired population with “fairly decent Medicare reimbursement.”
The topic of negotiating one is near and dear to my heart as it fits in perfectly with my passion — to help you turn your medical experience into a profitable, passion-based business that gives you time, freedom, and a deep sense of purpose.
Interested in learning more? Check out The EntreMD Business School, or book me as a speaker for your upcoming event!
