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YOUR CAREER
damages clause to ensure that physician employees pay damages if they practice within a certain radius during a certain time frame after their employment ends.
Cost of living is another consideration tied to geography. How much of your salary will go toward housing, property taxes, groceries, and transportation? Will you need to budget for private school tuition in one practice location and not another?
To Help You Evaluate
Plan to talk with realtors, local school
hospital, and others who will provide objective information. Ask about anything that’s particularly important to you: cost of housing, school options, athletics and other recreational activities, and turnover of physicians.
Knowing the standard of living that your base salary would provide in a community is also important, particularly when you are considering relocating to an area
with which you have limited familiarity. Get a clearer picture of the areas you’re considering with help from these websites;
• CNN Money (http://money.cnn.com/ calculator/pf/cost-of-living/index.html): A straightforward online calculator
• Sperling’s Best Places (http:// www.bestplaces.net/cost-of-living/): A calculator that factors in food, housing, utilities, transportation, and health costs.
• Bankrate (http://www.bankrate.com/ calculators/savings/moving-cost-of- living-calculator.aspx): Detailed cost comparisons for a few dozen common
cost-of-living items from ibuprofen to tennis balls.
• The US Department of State (http:// www.state.gov/m/fsi/tc/79700.htm):
A list of helpful resources regarding salaries, cost of living, and relocation including links to various chambers of commerce and realtor and retirement information.
Weigh It: Compensation
Two jobs that both pay $150,000 annually may result in very different standards
of living depending on where each is located. But there are also other factors to
consider as you compare compensation. The salary in the contract is just the beginning.
A fundamental premise that you must understand as you compare compensation offers is that your total pay (base salary, variation of return on investment – the return you provide on the investment employers make in you. Employers will pay you less than what you generate in revenue because the resulting margin will help fund their other operations, which affect your compensation.
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Comparing markedly different offers can be daunting. Here are a few sample employment terms to help you see how different options stack up.
Employment Model
Offer 1: Independent contractor Offer 2: Employed position Offer 3: Partner
If you receive an offer as an independent contractor, you should expect an above- average salary, fewer benefits, and fewer strings attached if and when you decide
to leave. If the offer is for an employed position, you should expect a lower salary than an independent contractor, a full slate of benefits, and more strings attached – but also more protections if either party terminates the agreement. A partnership opportunity should bring greater risk and reward in the forms of variable income, shared liabilities, bonuses, etc.
Compensation Model Offer 1: Guaranteed salary Offer 2: Production-based Offer 3: Draw
If you are offered a guaranteed salary, you will have the consistency of knowing what you will be paid, but you also won’t have
as much income growth potential. An offer with a production-based salary (RVUs, net collections, per shift) comes with uncertainty but also higher income growth potential. A draw is basically a salary that is paid to you over a certain time period that will be altered based on your production – supplemented if your production creates more income than expected and debited if it creates less.
Noncompete Agreement
Offer 1: 2 years and 10 miles in New York
City
Offer 2: 2 years and 10 miles in rural Kentucky
Offer 3: 10 years and 100 miles anywhere
Noncompete clauses are also called restrictive covenants. They are intended to ensure that you can’t directly compete with your previous employer upon termination. In these sample scenarios, Offer 1 is reasonable since it would be possible
to find employment outside of a 10-mile radius of a location in New York City. Offer 2, on the other hand, is not as reasonable considering the location. In rural Kentucky, a 10-mile radius might force you to move
a considerable distance to the next population center. In almost every location and situation, Offer 3 is not reasonable and should be negotiated.
