Compensation & Benefits / Work Force 27

Trends magazine, January/February 2011 Originally published in Trends magazine, trends.aahanet.org. Copyright © 2011 AAHA, aahanet.org.

by Xxx

The Biggest

Winners: Since

1998, full-time

associate salaries

have increased

87%.

Are you better off now than you were 4 years ago? It’s a common ques-tion asked during election years.

Owners and staff at veterinary practices might ask themselves similar questions at various points throughout their careers. Is my income keeping up with inflation? Are my salary and ben-efits on track with my peers’? How might my overall compensation change if I make the move from associate to owner?

To answer these questions and more, AAHA conducts biannual national sur-veys of member and nonmember prac-tices. The results are published in Com-pensation & Benefits: Vital Statistics for Your Veterinary Practice.

AAHA Press published the results of the first survey in 1998; the sixth edition was published in the autumn of 2010.

Read on to learn how salaries and bene-fits have changed between 1997 and 2009.

Associate pay up 87%All employee categories showed an

increase in salaries between 1997 and 2009 (Table 1). The big story is that full-time associate veterinarians reported the highest increase.

Their salaries showed an 87% increase from an average of $44,268 to an average of $83,013. Nikki L. Quenette, CPA, CMA, of Quenette Veterinary Consulting, says the large increase in associate wages may result from three causes: associates are

graduating with a large debt burden, recent graduates have learned some contract negotiation skills, and there is competition among practices to hire the best graduates.

Quenette notes that associates’ sala-ries as a percentage of practice income are increasing. She points to AAHA’s Financial & Productivity Pulsepoints 3rd edition (2004) that showed associates’ salaries were 8.8% of practice income. The Pulsepoints 6th edition, published in 2010, reports that associates’ salaries are 10.4% of practice income.

Not all associate veterinarians are recent graduates, of course. An intriguing question posed by the trend away from practice ownership is this: Has associate compensation increased over the past 12 years as associates remain associates for longer periods of time, and therefore earn higher rates of pay as their experience and productivity increase? The data does not answer this question.

Compensation and BenefitsWho is making more and who is making less?

What benefits are popular? See trends over the past 12 years.

by Carleen Brice

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Work Force / Compensation & Benefits

Trends magazine, January/February 2011

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$140,000

1997 2001 2003 2005 2007 2009

Owner salary

Associate veterinarian salary

Recession

-0.5% -0.9%

Source: AAHA Compensation & Bene�ts survey

Owners also upOwner salaries increased 38%

between 1997 and 2009. However, sala-ries for owner veterinarians declined between 2007 and 2009.

It is important to note that owner salaries do not equal their total com-pensation. Owners have many ways of structuring their total compensation. To reduce taxes, it is possible that owners opted for other forms of compensation to supplement the salary increases.

During the recessionary years 2007–2009, salaries for owners and nonregis-tered/noncertified technicians did not keep pace with inflation. According to the 2010 edition of Compensation & Benefits: Vital Statistics for Your Veteri-nary Practice:

•The national compound rate of inflation for the 2-year period between the collection of data in 2007 and 2009 was 4.1%, based on the Consumer Price Index.

•Of the five job titles we reviewed, the salaries for associate veterinarians, registered/certified technicians and receptionists increased at a rate equal to or greater than the compound rate of inflation for that time period.

•On average, the compensation for owner veterinarians and nonregistered/noncertified

technicians [veterinary assistants] did not keep pace with inflation.

Again, it is possible that owners used other forms of compensation to supple-ment their salaries; this is not likely to be true for veterinary assistants.

Technicians make more than assistants

Salaries for noncredentialed techni-cians increased by 57% between 1997 and 2009, whereas full-time veterinary technicians saw a 44% increase in salary.

However, full-time credentialed tech-nicians still make an average of $4,700 a year more than their noncreden-tialed counterparts.

More vacation daysOverall, benefits increased over the

years. The number of paid vacation days increased for all staff between 1997 and 2009.

Associate veterinarians currently receive an average of 10 vacation days, and other staff receive between 6 and 14 days off, depending on their tenure at the practice.

In the 1998 survey, the average num-ber of paid days off for associates and staff was 4.

Owner salaries stagnate during recessions

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29Compensation & Benefits / Work Force

Practices switch from SEPs to IRAs

In 1998, 53% of practices offered retirement plans, such as simplified employee pensions (SEPs), profit-sharing and 401(k)s. With the recent decline in the financial markets, it would be an easy assumption that the number of practices offering this benefit would decline.

However, just the opposite is true. In 2010, 74% of practices reported that they offered a retirement plan to their employees.

What has changed is the type of retire-ment plan that is most common.

Pensions and simple 401(k) plans, never popular, have become a thing of the past. Profit-sharing plans have decreased significantly, whereas 401(k) plans have remained steady (see page 30).

The most dramatic changes can be seen

Table 1 Veterinary salaries 1997 to 2009 (US$)

1997 2001 2003 2005 2007 2009Increase

1997 to 2009

Owner 90,579 95,268 94,759 124,631 126,299 125,210 38%

Office manager 25,547 27,414 29,125 35,330 37,006 35,259 38%

Hospital manager/administrator* 31,070 33,388 35,010 45,550 55,764 48,565 n/a

Practice administrator/manager** 37,007 42,458 38,582 54,655 44,831 45,765 n/a

Associate veterinarian 44,268 59,357 62,471 74,751 71,316 83,013 88%

Registered/certified tech 22,683 25,453 26,985 29,058 31,242 32,635 44%

Nonregistered tech 17,573 21,715 22,448 24,690 26,478 27,518 57%

Receptionist 17,378 19,827 20,831 21,778 24,398 25,522 47%

Kennel assistant 14,573 16,437 17,082 17,472 19,282 20,051 38%

*In 2007, the survey replaced the job title "hospital manager" with the title "hospital administrator"; this makes it impossible to compare salaries over the full 12-year span.

**In 2007, the survey replaced the job title "practice administrator" with "practice manager"; this makes it impossible to compare salaries over the full 12-year span.

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30 Work Force / Compensation & Benefits

Trends magazine, January/February 2011

in practices offering SEPs and individual retirement accounts (IRAs). In 1998, 31% of practices offered SEPs and the number of practices that offered simple IRAs was negligible. In 2010, that is reversed: Only 11% of practices offered SEPs. The most common retirement plan offered is a sim-ple IRA, with 33% of practices offering it to employees.

CE flatFor the 1998 edition, respondents were

asked to record the annual dollar allow-ance of CE for each staff category. Full-time associates were given an average of $947, full-time technicians were given $406 and full-time office managers were given $648.

Twelve years later, respondents reported that full-time associates received $1,239, full-time technicians received $531 and managers (both practice man-agers and office managers) received $767.

This is far below the rate of inflation.

Health insurance remains popular

More veterinary practices are offering health insurance as a benefit.

In 1998, only 70% of practices reported offering medical insurance to their employees. The most recent Compensa-tion & Benefits: Vital Statistics for Your Veterinary Practice shows that number has increased to 83% for full-time employees.

Eleven percent of practices cur-rently offer health insurance to part-time employees.

As health insurance costs rise, employ-ees pay more of the premiums now than in past years. In 1998, practices paid, on average, 83% of their full-time employees’ premiums. By 2010, practices were only paying 71% of their full-time employees’ premiums. n

Carleen Brice, a former senior associate editor of Trends magazine, is an

award-winning writer in Denver.

The first edition of Compensation & Benefits: Vital Statistics for Your Veterinary Practice (1998) surveyed 3,200 practices in the United States and Canada; 871 surveys were returned. The majority of respondents were AAHA members.

Later editions relied on a random sampling of small veterinary practices in the United States, including AAHA and non-AAHA members. Ten thousand surveys were sent out for the sixth edition (2010), and 864 surveys were returned.

As with all mail surveys, there is a possibility of nonresponse bias if those who chose to participate differed in some systematic way from those who chose not to respond.

There were terminology differences between the editions, which makes some compar-isons difficult. For example, in 2008, the job titles changed from hospital manager and practice administrator to practice manager and hospital administrator, respectively.

In addition, in later editions, salaries for staff were broken down by the hour rather than by the year. For this report, hourly salaries were multiplied by 2,080 hours (for a full-time employee).

SEP; 31%

Pro�t sharing; 23%

401(k); 20%

Simple 401(k); 11%

Pension plans; 10%

1997

SEP; 11%

Pro�t sharing;

14%

401(k); 21%

Simple 401(k); 3%

Pension plans; 3%

Simple IRA; 33%

2009

SEP; 31%

Pro�t sharing; 23%

401(k); 20%

Simple 401(k); 11%

Pension plans; 10%

SEP; 11%

Pro�t sharing;

14%

401(k); 21%

Simple IRA; 33%

Retirement plans offered by practices

rather than by the year. For this report, hourly salaries were multiplied by 2,080 hours (for a full-time employee).

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