Contract Negotiations: What Do You Ask From Your Future Employer?
When you are in the process of completing residency/fellowship, looking for a radiology job becomes a daunting task. Not only are you trying to find a career that will last for years but you are also left alone swimming through the complexities of contract negotiations, an area that you probably have not experienced before. It’s a brave a new world.
So, what do you do? As a typical resident, you find general information on the internet about the basics of contracts. And if you contact an attorney, he will probably give you generalities about how to approach contract negotiations. But, this post is different as it outlines what negotiation points a practice is more likely to give to the applicant.
To that end, today you are going to get an insider’s view of what you are most likely to be able to negotiate and which benefits you may find difficult to change. You will also receive the perspective of someone who both works as a partner in a private practice but also advocates for his residents. Remember, I am not an attorney so I am not providing legal advice. Rather, I am telling you what I think practices are more likely to leave on the table for negotiation and what items practices do not want to touch.
Depending on the desirability and location of the practice, however, you may be able to get a lot more or you may have no wiggle room at all. That is something that you are going to have to judge for yourself based on what you know about the practice. So, let’s go through some of the basics…
Benefits That Can Be Negotiated More Easily
Moving can cost a lot. Generally, you are talking about multiple thousands of dollars, especially if you are moving a substantial distance. However, many practices will usually be willing to include this benefit into the contract. Why? First of all, it is a tax-deductible expense for the practice, so the practice will pay for it in pretax dollars. And second, it pays for the practice to try to create as many connections for you to the area as possible. What better to way to accomplish this than to provide for moving expenses?
401k Plan Perks
Typically, practices tend to be a bit more flexible with indirect expenses such as matching contributions to a 401k plan. Why? Again, it is a pretax benefit that can be written off by the practice. Yet, it does not appear as an increase in income. Partners would also much rather negotiate a 401k plan than a salary because increasing a salary could lead to having to add on additional income to other employees as well. It is much harder to calculate indirect perks!
Time Spent In Particular Departments
Maybe you hate mammography or can’t stand interventional procedures. At the beginning, it is entirely reasonable to discuss your expectations for where you want to work in the practice. For some applicants, this can make or break the quality of a job. And, for the practice itself, this can be a minor concession compared to other benefits!
Malpractice Tail Insurance
Malpractice tail insurance can cost an employee thousands of dollars when they leave a practice. So, this can potentially be a major cost saving. To help out the employee, the practice can pay for coverage with pretax dollars. And, like the 401k plan, it differs from the subheading of salary/income. For these reasons, a practice may be more willing to budge a little on a negotiated contract.
Nowadays many practices place restrictive covenants within the contract in order to prevent the applicant from leaving and working for a local competitor. Each state enforces these covenants differently and the time and distance restraints can vary widely. But, this can potentially lead to a problem if you want to continue to live in the area and you decide to quit your job. However, it is very unusual for a practice to legally enact the clause on a former employee. (although possible!) So, if you really need to stay in the area, no matter how the job goes, this may be an item that you should consider entering into contract negotiations.
More Difficult Items For Contract Negotiations
Salaries are usually the most difficult item to negotiate. Why? Although typically not allowed, employees will often compare salaries and tempers can flare if the employees perceive their salary as unfair. In addition, the partners typically compare the salaries among all their employees and themselves. It becomes hard to create a fair deal that does not impact others in the practice. Some employees may have had more experience and other bring particular skills to the practice. So, it can seem unfair among the partners as well. Unless you are in an enviable position of working at an undesirable location or you have a particular skill that the practice cannot find elsewhere, annual income is not as easily changed.
Years To Partnership
This can also be a very touchy subject. Partners may have invested themselves in a system for years. And, you want to change the system to give you fewer years to partner? That typically does not fly as well as negotiating other benefits. In addition, very large sums of money are at stake for each year negotiated away by the practice to make you a partner. So again, you are going to be hard-pressed to negotiate fewer years to partnership.
Typically, a buy-in or sweat equity is an amount that you pay to the practice for the privilege of becoming a partner. This number can vary from a nominal amount to millions of dollars. Again, emotions can flare when you decide to change the amount that it costs to enter a partnership as you may have to pay less than the other partners did. In addition, some practices own equipment or real estate. It would be potentially unfair for the practice to just give away these assets. Depending on the practice, this can be a very difficult item to negotiate as well.
Unfortunately, residents bemoan student loans more than anything else. And, the high debt burdens residents must face paying for the privilege of going to college and medical school can be overwhelming. To make things even worse, however, most practices will not make this into an employee perk because the practice cannot deduct the money pretax. Perhaps even more important than that, the practice has to trust that the employee is not going to skip town and leave the practice prematurely. As you can see, practices take a lot of risk by adding this benefit as a way to sweeten the deal for the applicant. Therefore, a new employee getting loan repayment as a benefit is unusual unless the practice is in desperate need of the applicant.
Contract Negotiations: A Battle Or The Beginning Of A Great Friendship?
Finally, I have yet to mention the most important point of contract negotiations. Basically, a contract is only as good as both of the parties’ word. A contract can be ironclad for the employer or employee. Regardless, if the employee likes the job and the employer likes the work of the employee, the specifics outlined by a contract are rarely used. It is only when things don’t go as planned that the contract becomes truly important. So, the bottom line and the irony of it all… As important as contract negotiations can be, invest more time and effort in figuring out whether the job is right for you rather than worrying about the nitty-gritty details of the contract. Good luck!
Have any strong opinions about other items that should be negotiated in a contract? We would love to hear your thoughts by commenting below!