How you compensate your associates will have an impact on the bottom line of your practice, as well as the quality of optometry services you can provide.

What Other Practices Are Paying Their ODs

How much you’ll need to pay to attract great associates will be influenced by the going rate for qualified ODs in your area. Many practices pay their associates 12 to 18% of production. If you can afford to pay a higher percent, it’s a good idea to do so.

The median salary for optometrists in 2018 was $111,790. The average compensation for optometrists varies by state and size of the practice.

What Can You Afford to Pay?

Before you decide upon a generous compensation package, you’ll need to determine what your optometry practice can afford to pay. Look to your profit margin; if the number is above 10%, you should be able to offer competitive salaries or commissions.

What you can afford to pay might also change in terms of your risk aversion. If your practice is looking to minimize risk, you can offer your associates a percent of their production. This way, the amount you pay your associate will be dependent on their contribution to the firm. Alternatively, you could offer a salary, which remains constant regardless of how much an employee contributes.

Give Your Associates Options

If you can’t pay premium prices, or even if you can, giving your employees options regarding their compensation can help sweeten the deal. A salary lowers the risk to the associate while a percent of production incentivizes your associate to go above and beyond for the business.

You can also offer a hybrid payment method, where you will pay your associate a salary with a bonus in percent of production that is produced above a predetermined amount.

If you’re looking for future partners, you’ll often find them in associates who choose to take payment from a percent of their production. Entrepreneurial-minded people often see this payment option as a challenge and an opportunity for great success.

 Improve Your Practice Through Fair Compensation

Generous compensation can be used as a tool to inspire your associates to do great work. You’ll also be able to attract skilled ODs and retain your best performers if your practice has a reputation for compensating employees well.

Although large salaries may seem like unnecessary or unwise expenses, they can help you retain the associates that keep clients coming back and lower your costs down the road. If you lose ODs every year to your competing firms, you’ll be forced to allocate extra money to recruiting and training new associates more often than you’d like.

It is often worthwhile to make it clear to your employees that you’ll consider raising their wages in the coming year if they show potential and do good work within the firm. This can help you retain associates with a lower risk, as you won’t be on the hook to pay underperforming employees extra.

Get Help

If you’re muddled on the finer details of how to compensate your associates, accounting outsourcing can offer you the advice and accounting services you need to make smart financial decisions for your practice.

Contact Caro & Associates at (206) 497-0671 or info@caroandassociates.com to speak with a local CPA and learn how accounting advice can improve your bottom line.