How to Negotiate Your First Physical Therapy Salary

In the last several months since my blogging has become a little more known, I've had quite a lot of students and new grads reach out to me with questions outside of the clinical realm. Many struggle with how to go about landing their first job, and even more so how to ask the scary questions about money. With the mounting weight of student load debt, quite a few students have securing the highest possible salary in their chosen specialty area at front of mind. Many of us were lucky enough to make it straight from undergraduate school directly into DPT programs. However, the drawback to this is the fact that you may not have had the opportunity to work a full time job that required a salary negotiation. In this outstanding guest blog I asked Brett Kestenbaum of newgradphysicaltherapy.com to give us a little insight into negotiating your salary out of school, and of course he knocked it out of the park.

 

Negotiating is a daunting proposition, especially as a new graduate. You worked so hard to finish school, received your first job offer, and now you just want to snatch it up and say “Yes thanks that offer sounds perfect.” Negotiating your first salary not only provides you with the opportunity to get paid more, or more time off, or whatever it is your negotiating, but it also demonstrates that you understand your value, are confident in your value, and are the type of person who will get things done. Interestingly enough, a study from Carnegie Mellon shows that only 7% of women and 57% of men negotiate their salary. That number is incredibly low from what the number should be - 100%.

This article is going to cover three key topics:

·         What is negotiating

·         Should you negotiate

·         How do you negotiate

By the end of this article, you will understand why you should negotiate as a new graduate and have the confidence to do so.

What is Negotiating?

Negotiate (nəˈɡōSHēˌāt/) v - try to reach an agreement or compromise by discussion with others.

The act of negotiating is simply the process of coming to mutually agreed upon terms. Think back to when you were young, and your mom said “no you can’t have any milk you have to go to bed” and then you started crying. What happened next? She gave you the milk, and you stopped crying. That is negotiating. You and your mother reached the agreement that you would stop crying, and she would give you the milk. Although the tactics utilized in the above example are likely different ( I say likely because hey, anything's possible) than the tactics you would use to negotiate your salary, it was still a negotiation between two parties.

Should you Negotiate?

Negotiations should be entered when there is a discussion over the allocation of value. As physical therapists receiving a job offer, we are trying to determine what the split of money should be between the physical therapist and the business owner. Physical therapists generate both short and long-term revenue for a company. A portion of the revenue generated will go to the owner for providing value. The owner provided value by building the business, which created the job for the hired therapist. The business owner also assumes all the risks and responsibilities that come with owning a business.

Some of the revenue will also be allocated to the employee - in this case you (the physical therapist). You (as a physical therapist) provide value by delivering a specialized service which generates revenue. The revenue generated now becomes part of the pie, and that revenue needs to be allocated to you and to the business. So, who determines how the pie is split?

Most people think “it’s the employer’s business so the employer get to decide how much a physical therapist is worth for the business” - which is true. Employers DO get to decide how much an employee is worth to them, but they don’t get to decide how much you are worth. There is a major difference between the two. Understanding the difference will help you negotiate your physical therapy salary.

We are all individually human meaning we all inherently have a different value for a practice. Many times we get caught in the common trap of thinking that a physical therapist has a maximum earnings potential for a practice, and therefore the business owner has no incentive to negotiate salary because they can hire any therapist and get the same earnings out of them.

Take this example.

Physical Therapy Practice and Rehab Practice are located in the same area. They both have fully booked caseloads, and they both treat the same amount of patients. Physical Therapy Practice hires Joanne, PT. Joanne goes to work, treat her patients, goes home and goes to sleep. She does not go above and beyond for her patients or the clinic, but she generates $1000 per day in revenue for the practice because of her full schedule.

Rehab Practice hires Susan. Susan goes to work, engages with her patients, knows all of their names, and all about their families. Susan does volunteer work in the community and understands how to blog online. Susan also generates $1000 per day.

One year goes by and Physical Therapy Practice is beginning to see a downturn in their patient volume. The word of mouth is not spreading about Physical Therapy Practice and their reputation with the community is not the greatest. Joanne now sees fewer patients during the day and generates $800 per day. Rehab Practice continues to have an influx of patients because Susan has been so active in the community, and her patients rave about her to anyone who wants to listen. Rehab practice determines it has enough volume of patients to expand their practice by adding more square footage and another therapist. Although Susan still generates $1000 per day on paper due to reimbursement ceilings, Susan’s efforts alone have created much more value than just her bottom line numbers.

This example demonstrates why people, not job titles dictate the success of a business, and why “value” is based on a person, not a position.

Remember that your value goes far beyond that maximum daily revenue number, and new, creative ways to negotiate can open up for you.

How to Negotiate (as a new grad)

First, let's look at the 3 key factors to negotiations as a new graduate

1 - Change your Mindset from Short Term to Long Term Thinking

You are a new graduate and therefore should want to prove your value.Proving your value will make you more money in the future.

 

2 - Think Win Win

You want your employer to be better off than they were before you came into the equation, and, as Gary Vaynerchuck puts it - Provide 51% of the value to the other party. Always give more than you take. 

3 - Be prepared

Simple preparations and foresight today will provide you more value in the future than its upfront time costs today.

When receiving your first job offer, negotiate for the future and not for today. What I mean by that is negotiate a raise or bonus and not an increase in starting salary. You are a new graduate, which means there are risks for the employer associated with hiring you. When making the decision to hire a new graduate an employer runs all the general risks of turnover, but also assumes the risk that you simply can’t do your job well.

Your job in negotiations is to mitigate those up front perceived risks. Provide the employer the opportunity to retain your services at the offered salary with an increase in 3 months when you demonstrate that you are productive, and have high customer satisfaction scores.

Or, If you enjoy marketing, implement an online marketing campaign, or do volunteer work in the community and tie your salary increase to the successful completion of an online or volunteer campaign. Get creative with what you come up with. Think about where you know you can provide value, and tag your salary increase to providing that extra value that you are asking for. If you are the type of employee who can increase the size of the pie (make the practice more money) today and in the future, it is easy to negotiate because you are rare. Most people are NOT going to go above and beyond, but that’s what it takes to honestly and successfully negotiate. 

Brett Kestenbaum is a physical therapist and entrepreneur. Brett worked the beginning of his career at Scripps Mercy hospital where he treated a broad spectrum of acute care patients and then founded newgradphysicaltherapy.com and CovalentCareers.com where he currently serves as Vice president and COO respectively.

 

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