In April, we wrote about the myriad ways that the onset of COVID-19 was affecting physicians and their employment contracts. At the time, hospital settings were bracing for sudden spikes in patient loads, while many private practices were pressuring physician employees to accept pay cuts or mandatory time off in order to keep their doors open. Now, nearly six months into the pandemic, the employment landscape for physicians is stabilizing, but although many practices are still feeling the effects of a bruised economy.
Our physician contract review team works with physicians nationwide across all specialities and experience levels to help physicians evaluate and negotiate employment offers. As a result, these specialized financial advisors and lawyers have a unique snapshot of physician job market trends. Here’s what you need to know about the current hiring and employment environment for physicians:
Most employers have moved past the panic reactions of early 2020, which led to a sudden upsurge in salary freezes, contract amendments and pay reductions. After about two to three months, this initial fear subsided in many places, however physician employers remain extremely cautious about hiring and expanding in the current market.
The economic downturn has put a continued strain on many institutions and practices. Hiring freezes are in effect in many organizations, and other employers have reduced their number of openings. Small private practices have been hit the hardest, and may be the slowest to recover fully. In the meantime, larger groups and hospital systems may be able to offer richer opportunities and better benefits for physician employees.
Across all employer types, the tightening job market has left physicians with more limited options. Simply put, physicians today are competing for a smaller number of job opportunities.
Whether you are finishing your training or looking to change employers, there are still strong prospects out there. However, our physician clients who are successfully finding new employment tend to be choosing from a smaller pool of choices, searching for jobs longer, and expanding their search radius. Most importantly, they have less room to negotiate and maneuver when an employer does extend an employment offer.
In light of Covid-19 and the shrinking job market, the balance of leverage in salary negotiations has shifted in favor of employers. As a rule, physicians are always advised to pursue negotiation to improve an employment offer. While attempting to negotiate is perfectly standard, appropropriate part of the hiring process, it offers no guarantee that an employer will play ball. Now in particular, more employers are not entertaining any negotiation whatsoever. Because physicians have fewer employment options to choose from, more practices can adopt a “take it or leave it” approach to contracts without fear of losing a qualified prospect.
In the past two months, we have seen more employers refuse any attempts at negotiation than we had seen in the past two years prior to Covid-19. In every instance, the physician signed the contract as-is rather than walk away from the offer. This should offer some indication of how much leverage employers have in the current job market.
However, it is worth noting that even in this climate, we have not seen or heard of any employers revoking an offer simply because a physician asked to negotiate. Regardless of job market fluctuations, physicians should always attempt to advocate for the compensation they deserve. However, doctors should also brace themselves for the reality of the current situation: in the end, they may have to end up accepting an offer without much room for negotiation.
Related: Physicians’ Compensation Report 2020
There’s no denying that this is a difficult time for physicians looking for employment. However, doctors can still make positive career steps despite the tightening market. Just as importantly, physicians who are feeling the strain now, should plan strategically for better days to come. The current job market is expected to improve with time, and physicians who may be pressured into accepting lower-paying positions right now can make up for these losses down the road.
Physician contract renewals usually occur every 2 to 3 years, and these renewals are the perfect time to review your contract and renegotiate your compensation. Many employed physicians were essentially forced to accept pay reductions, cover irregular departments, cut their hours, or take mandatory time off in March and April of 2020. When these physicians have contract renewals on the horizon, they should remind their employers that they accepted these sudden contract amendments to be a team player in the midst of the crisis, and now they would like that sacrifice to be acknowledged with an enhanced bonus or salary increase.
The same strategy can be employed for new physicians. Right now, you may have to take what you can get now in terms of job prospects, but don’t be afraid to be more aggressive about your compensation as the industry recovers. In a few years, you should revisit the issue and remind your employer that your initial salary was affected by an economy recovering from unprecedented healthcare crisis; it was never a proper reflection of your professional worth. Therefore, when the market has bounced back, you expect your salary to be adjusted in accordance with industry compensation benchmarks. Professional contract reviews can help you compare your earnings and contract terms with other specialists of commensurate experience in your area. The bottom line is this: when it comes to compensation, be patient but not passive. Otherwise, an underpaying first position could depress your earnings for years to come.
One final piece of advice for physicians on the job hunt: send out more applications that you anticipated. More physicians are bringing us two or three contracts to review at a time, instead of just a single offer. By comparing several prospective contracts, you can be more confident that you are getting the best offer possible in the current job market.
To learn more about physician contract review and negotiation, talk with one of our trusted physician-specific advisors.