I get asked this all the time. Won’t I get fired if I ask for more money? Is it really worth all of the effort? Will it actually make a real difference in compensation, especially over the long-term? As a doctor, isn’t it in poor taste for me to talk about money?
Physicians negotiate every day, they just don’t realize it. You negotiate when you are discussing timing of a test, the starting dose of a medication with a patient, or getting a prior authorization for a procedure or medication.. Here’s the thing, if you do not learn the vital skill of negotiation your career will suffer. Being underpaid for a single contract is bad enough. Being under compensated for 30 years really hurts. And it is not just your salary. Bonus structures, vacation time, CME funds, signing bonuses, and student loan repayment are all open to negotiation. Most human resource representatives have the authority to offer better package deals. However, they are specifically do not mention the ability to improve these non-salary related benefits unless it is directly brought up in the contract negotiation.
How much of an improvement in salary can you expect from negotiation? Anecdotally and based upon the economic science that studies negotiation, most initial offers are given at about 20% less than the expected final agreement. In a most physician contract negotiations, this is typically $25,000-$35,000, possibly more based upon your specialty. In my experience, our usual client negotiates an average $25,000 above the initial offer, although many of our clients have negotiated even better deals.
Remember, this is extra compensation that you receive just by asking! You don’t need to see a single extra patient or work an extra hour. This newly negotiated salary serves as the base for all future negotiations. All your raises will be based on this extra amount, with a compounding effect annually. When it’s all taken into it account over a 30-year career and assuming some annual salary increases, the ultimate difference in compensation can be over $5 million, possibly more.
You are expected to negotiate. If you don’t negotiate, you’ll harm your reputation. It will seem as though you are desperate or lack business skills. What would you think of a person who bought a used car from you at your initial well-researched but very high offering price? You’d think they were uninformed at the least. Not only does negotiating help your financial situation, it also will improve your standing and reputation. After all, you’d much rather have the reputation of the shrewd and clever business-savvy physician than the uninformed push-over.
Negotiation skills extend beyond salary negotiation. You’ll want a great deal on a house and a car. You’ll need to renegotiate contracts with your hospital and third-party payers. Eventually, you’ll move up in the organization and negotiate employment contracts for new hires. In your daily practice you’ll need to negotiate with other departments, your colleagues, and staff. Doctors negotiate every day, so it is in your interest to master these skills. Negotiating your physician contract requires more skill than your typical haggling over a vintage lamp at a flea market. We recommend looking at the resources available for physicians or consider our CME approved negotiation and professional business skills for physician seminars. If you can’t attend the larger conference, consider a small group workshop.