With less than a year left in her family medicine residency, Dr. T focused on finding a physician job in a small community where she could practice traditional family medicine. After visiting a critical access hospital in Minnesota, she fell in love with the group and everything about the community. However, she had several offers for higher physician compensation at this time.
Dr. T was transparent with her recruiter about the dilemma. She was excited about the opportunity but could only justify moving forward if they could make the pay more competitive. Brooke went to the client on Dr. T’s behalf and presented the compensation data for family medicine physicians in the region. The data was persuasive, and they were willing to make adjustments, such as adding RVU-based incentives to put her take-home pay in the range she wanted. They also added a generous signing bonus. It was more than enough to make the job worth Dr. T’s while.
Dr. T’s story demonstrates how a good recruiter can leverage physician compensation data to improve a candidate’s offer. That’s not to say this is always possible, but if the data proves the current offer is not competitive, most organizations will make every effort to meet, or at least come closer to, the candidate’s expectations.
As Vice President of Recruitment for Jackson Physician Search’s Western Division, it often falls to me (and my team) to manage physicians’ compensation expectations. Usually, they have heard of someone in their residency program receiving an “above market” compensation package, a six-figure signing bonus, or complete student loan forgiveness, and they want to know how they can secure a similar offer. At this point, we explain the significance of factors such as specialty, location, type of practice, and physician compensation models. We also review compensation trends in their target market to help set realistic expectations.
As part of this process, I find myself returning to the same points again and again. Understanding these truths about physician compensation will help manage your expectations and prevent you from overlooking quality opportunities. As you navigate your physician job search, here are five things to know about physician compensation.
1. Physician compensation reports don’t tell the whole story.
Industry compensation reports, such as MGMA’s, reflect physician earning trends and provide benchmarks across specialties and markets. Organizations may consult these reports to gauge the competitiveness of their compensation packages, and as noted in Dr. T’s story, the data can be useful in compensation negotiations. However, it’s important to note that the numbers reported reflect the previous year and include a combination of base pay and productivity or quality incentives, which can significantly impact earnings. For this reason, candidates using these reports to determine if an offer is competitive must remember that the figures reflect total compensation, not base pay.
Takeaway: Compensation reports can provide insight into your earning potential, but it’s important not to directly compare a base salary offer to the total take-home pay figures listed in these reports. That said, it is fair to ask the employer how their physicians’ incomes compare to these numbers. A transparent organization should be willing to share this information with you.
2. Advertised physician compensation is not a written offer.
Physician job ads will often reference compensation and/or earning potential. Some states require this transparency, and even when this is not the case, it has become best practice to share compensation information.
When browsing physician job boards, candidates may be tempted to use compensation to narrow their results. That is, they filter out or scroll past ads that feature anything less than their target numbers. I caution against this because the advertised compensation is not necessarily the amount a client is willing to offer to the right candidate, nor does it reflect income potential. You may overlook an ideal opportunity because the recruiter who posted the ad used a more conservative number. On the other hand, a big number in the job headline is also not an offer. Clients may bundle base pay and recruitment incentives to get to a big number designed to catch your eye.
Takeaway: Don’t let the compensation listed in the job ad be the deciding factor on whether or not you apply for a job. If the job description appears to check all or most of your boxes, it’s worth finding out more.
3. The highest offer doesn’t always equate to the highest long-term earnings.
Physician compensation models vary, but most organizations will provide new hires a guaranteed salary for a set period of time, after which productivity incentives take over and make up the bulk (or all) of a physician’s income. The amount of the guarantee is typically determined by how much a physician is likely to earn once they move to the productivity model. However, this is not always the case. Physicians should ask questions about productivity expectations and determine how much the practice’s established physicians are taking home. This is something organizations should be willing to share (and if not, I would consider it a red flag).
Takeaway: The organization offering the biggest salary guarantee doesn’t necessarily have the most significant long-term earning potential. Productivity incentives, quality incentives, and partnership opportunities will impact long-term earnings, so it’s not always an apples-to-apples comparison when looking at two (or more) offers. Ask questions to understand the nuances of the package, and aim to learn not just how much you will make in year one but what your potential is for years three, four, and beyond.
4. The highest offer doesn’t always equate to the highest job satisfaction.
As I’ve written in the past, physicians need more than competitive compensation to be happy at work. However, many physician job seekers, especially those coming out of training, put compensation at the forefront of their decision. In a survey of early-career physicians conducted by MGMA and Jackson Physician Search, 76% of physicians said compensation was the primary factor driving their first job decisions. The same study found physicians who completed training in the last six years reported staying in their first jobs for an average of just two years. When the question was asked of all physicians (regardless of how long ago they completed training), the average first job tenure was six years. The trend of shrinking tenure suggests physicians often accept the largest offer but quickly discover that it takes more than money to be happy at work.
Takeaway: While compensation is certainly an important factor, physicians should carefully consider other factors such as practice model, organizational culture, and growth opportunities when seeking an excellent long-term fit. In my experience, these attributes tend to have a much greater impact on a physician’s overall job satisfaction than their take-home pay.
5. If a candidate is a great fit for the job, physician compensation will rarely get in the way.
Most organizations will find a way to make the compensation work if the candidate is truly a great fit. That’s not to say physicians can name their price, but if they have realistic expectations and can make the case for what they need to accept the offer, most of the time, the client will find a way to make the candidate happy. Dr. T’s story is a testament to this truth.
Takeaway: Be transparent about your compensation needs while being flexible about how they can meet them. For example, if an organization can’t come up with a big signing bonus, they may be able to arrange a retention bonus paid out over several years. Or perhaps they can’t increase the salary guarantee, but if they are willing to provide more competitive RVU incentives, it puts the power to earn more in your hands. Keep an open mind throughout the negotiation process, understanding that if it’s at all possible, most organizations will strive to make it work!
Understanding Physician Compensation
Physicians often begin the job search process laser-focused on salary, but when deciding between multiple offers, it’s important to look at more than the salary guarantee. Be sure to consider the impact of productivity and quality incentives, as well as signing bonuses, student loan assistance, and other recruitment incentives. Additional factors — such as practice model, location, and health and retirement benefits — can also influence compensation packages in ways that aren’t immediately obvious. Physicians should consider the full context of each offer to determine the best overall fit, not just the salary figure.
Compensation reports and job advertisements may influence your salary expectations, but no resource is more valuable than a physician recruiter who is familiar with your target market. A good physician recruiter can provide a wealth of information to help set your expectations in the beginning and more effectively negotiate your physician contract as your search comes to a close. Physician compensation is complex, but the sooner physicians understand the truths discussed here, the more likely they are to find an opportunity that not only pays well but is also a good fit.
If you have questions about physician compensation trends as they relate to your job search, the team at Jackson Physician Search is happy to share our insight with you. Reach out today to learn more.
About Helen Falkner
As the daughter of a physician and an Iowa native, Helen has witnessed firsthand the impact a great physician can have on a community. She joined Jackson Physician Search at the company’s headquarters in Alpharetta, GA, as an entry-level Research Consultant in 2012. Through her consistent success as an individual contributor and manager, Falkner progressed quickly to Partner in 2018 and assumed her role as Regional Vice President of Recruiting for Jackson Physician Search’s Western Division in October 2020. In January 2021, she relocated to the firm’s Denver office, where she leads a team of successful physician recruiters while actively continuing to recruit for her clients.
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