The Economics of Hiring

hiring front office staff

If you’ve ever watched black-and-white reruns of TV shows from the ‘60’s and ‘70’s, you’ve seen the stereotypes.

Mental health professionals were almost always male, almost always psychiatrists, and their admin staff were always female. But the front office workers seemed awfully helpful. Now that you have broken the glass ceiling yourself, should you complete the picture by hiring a male admin? Probably not.

It has nothing to do with the stereotypes: my advice would be “probably not” regardless of the gender or professional identity of you or the new hire. The problem is economics.

True, having someone up front to answer phones, take copayments, schedule appointments, and argue with insurance companies would save you a lot of time. You could use that spare time to schedule additional appointments, and thereby increase your income. There would be intangible benefits, too: you would look more professional to potential clients, for example, bringing in more new referrals. So why not?

New Hire Mathematics

Here is the math. You would want to hire someone who is bright and polished; hard to find someone like that for less than about $15.00/hour. For a full time admin, the national average is ~$37k per year (via Glassdoor, January 2022) in salary alone. Ouch!

But wait, there’s more! As an employer, you must pay an additional 6.2% of their salary to the government as your part of their Social Security taxes. You must pay 1.45% of their salary for Medicare. (You thought that was taken out of their paycheck? It is, but as an employer, you must match their contributions with your own.)

And still more! You’ll need to acquire Worker’s Compensation insurance to cover your liability if they slip and fall at work. This isn’t an option: you are required to have that insurance if you have an employee. And though it isn’t required, it is hard to hire someone competent unless you provide a medical insurance plan for them, and perhaps a 401K or other retirement plan.

Added together, these additional fees add about 50% to their base salary. So now we are talking about $46,800.00 per year for your full-time front office help if you hire someone at $15/hr. Can that be right?

Actually, no.

If by “full time” you mean “40 hours per week x 52 weeks per year.” Don’t forget that they will take off two weeks for vacation, and about another two weeks in total for sick days and paid holidays.

So now we are down to 48 weeks per year. And by the way, they won’t be there when you stay late to accommodate clients who can’t schedule during the day. You will have to take up the slack yourself when they are not around... so why not just learn to do it yourself ALL the time?

If you are a solo provider, this is definitely the way to go. If the average appointment nets you $80.00 in fees (a generous estimate unless all your clients are self-pay), you will need to see an additional 585 appointments per year just to break even.

That’s an extra dozen appointments per week to make up for paying $46,800.00 per year for your front office.

As if that weren’t enough...as a solo practitioner, you won’t be able to keep them busy for 40 hours per week. That muffled noise you hear from up front will not be their conversations with insurance companies -- it will be the sound of TikTok and Instagram scrolling to soothe their stultifying boredom. 

When SHOULD you hire?

Is there ever justification for a front office, then? Yes!

If you are in a group practice with three or more therapists sharing one front office admin, you can justify the addition of front office staff. If you use a good practice management software (like TherapyAppointment, where admin accounts are free!) to manage paperwork and appointment scheduling, they will be busy, but not overwhelmed.

You’ll be able to catch your breath between sessions. And you will really appreciate their help with insurance issues -- a time-consuming task. Splitting the employee expense three ways makes it downright manageable.

Until then, manage your practice yourself (it's easier with a good practice management solution like TherapyAppointment), and find another way of banishing gender stereotypes to the land of black-and-white TV.

 

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