Cut jobs or cut salaries?
To weather this recession, Peter Lucash makes the suggestion that the healthcare clinic owner should consider cutting salaries instead of letting staff members go. Fedex, as opposed to many other large companies, has recently done so by cutting back on executive salaries in addition to the rest of their employee’s wages. First impulse for business owners and managers is to cut jobs to reduce labor expenses significantly. However, as Lucash points out, there may be more benefit in trying to keep good employees around.
Cutting staff will reduce expenses, but the pain will be felt in many ways – short staff, stressed staff, a lessening of the quality of your care for patients, and more tasks that drop to the physician, whose is the key revenue generator. At some point, however, business will pick up and you will then be scrambling to recruit, hire and train people, something that costs you in dollars, time and disruption as the new employee learns how you do things.