Why I NEVER Pay My Staff A Percentage Of Turnover?

Dec 02, 2019

I know it seems to be a common thing in Podiatry clinics and a lot of similar type clinics that the owner feels the safest thing to do when it comes to taking on clinicians and paying them is to make them an "associate" and them a percentage of their turnover. I have spoken to clinic owners with whom this can range anywhere from 40% to 70% depending on how desperate they are. 

I used to do exactly this paying a percentage of their turnover. I felt there was one major benefit to this. Namely if they didn't bring in any money that week then I would not have to pay them as I was unsure if they would be busy enough. 

It seems a lot of clinic owners do this as they like to pretend that the associate is "self employed" as therefore the clinic owner does not need to deduct the associates taxes not pay any employers taxes. It appears in most countries that the Tax Man does not agree with this, feeling that if the clinic owner is charge of collecting  the money booking the appointments and paying the associate then they are an employee, not an associate. 

Another perceived benefit is that the associate will be more enthusiastic about driving on their client base and therefore be more profitable and require less management.

I totally understand why clinic owners make this decision but I strongly believer that this is big mistake for a few reasons. 

1. You the clinic owner are not the true boss and will find it very difficult to implement any changes you need to implement day to day in your business if you hope to scale it up as the associate will see little benefit to their wage.

2. Scaling up your business will naturally require taking on more clinicians which will in turn lead to a drop in the original clinicians turnover as its diluted initially. This is the cause of huge issues in many clinics as the owner tries to build the clinic but is strongly opposed by the associate on a percentage wage you can see the danger to their take home wage. 

3. Your clinic will be all about the individual clinicians rather than about the systems they use. This will make the clinic extremely vulnerable to staff moving on and taking their clients with them. If they instead are on a set wage then they will have zero issue with patients being seen by any clinicians and the patient becomes loyal to the clinic rather than any single clinician. 

If you are thinking of scaling up and taking on associates then I would urge you to pay a set wage.

( tip; ask in the interview..."whats your salary expectation?")

By paying a set wage your staff will be likely to follow your lead, implement your systems and help you when taking on more staff and you are a collective team rather than a threat to each others income.