00:00:04:05 – 00:00:33:05
Jay Shorr
Welcome to Shorr Solutions: The Podcast. I’m your host, Jay Shorr. I’m the CEO and founder of Shorr Solutions, a National, and award winning consulting firm, assisting aesthetic and surgical practices with their operational, administrative and financial success. I have an amazing team of practice management experts and clients across the U.S. and as an industry expert with firsthand experience owning a multi-million dollar cosmetic dermatology and plastic surgery practice.
00:00:33:14 – 00:01:07:11
Jay Shorr
Listen in as I lend you my expertise and best tips to successfully manage and grow your aesthetic practice. I will also be bringing in guests along the way, so get ready to be equipped to operate your aesthetic practice strategically and profitably. Welcome to Shorr Solutions. The podcast.
Welcome to another episode of Shorr Solutions: The Podcast. Our session today is going to be Cost-of-living raises in these unusual times.
00:01:08:01 – 00:01:39:17
Jay Shorr
I’m your host, Jay Shorr, founder and CEO of Shore Solutions, a national practice management company specializing in the operational administrator and financial guidance of aesthetic cosmetic, surgical and medspa practices.
So many of you want to know, what is a cost-of-living raise and what does it include? Well, quite simply, let me share with you what cost-of-living raises are. A cost-of-living raise, sometimes called a cost-of-living adjustment (COLA)
00:01:40:00 – 00:01:51:20
Jay Shorr
Is an increase in salary meant to help employees cover increased living expenses, and the cost-of-living has increased faster than wages for the past decade, and especially,
00:01:51:20 – 00:01:55:23
Jay Shorr
In the last year or two. And with the pending upcoming recession, inflation.
00:01:55:23 – 00:02:14:11
Jay Shorr
Whether it does happen or not, it doesn’t seem that there’s going to be any sign of it slowing down any time soon, which is very important because we have to know how our staff feels. It’s not about us as business owners. It really amounts to how do our staff.
00:02:14:11 – 00:02:15:19
Jay Shorr
Feel about all of this?
00:02:16:04 – 00:02:22:02
Jay Shorr
Because many times they’re coming to us and they’re saying, I need a raise. And we say, well, You just got an annual raise.
00:02:22:03 – 00:02:27:02
Jay Shorr
And they say, Yes, but all the cost and expenses over last year have gone up.
00:02:27:04 – 00:02:29:03
Jay Shorr
What am I to do?
00:02:29:10 – 00:02:36:15
Jay Shorr
Well, quite frankly, let’s take a look at really what happened in the last two years with cost-of-living
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Jay Shorr
In 2022 Social Security raises even went up 5.9 Percent.
00:02:44:01 – 00:02:58:19
Jay Shorr
and in 2023, those on Social Security by the cost-of-living adjustment was 8.7%. Now, you might say, I don’t know that I want to give my staff 8.7% How does that amount to that?
00:02:58:20 – 00:03:19:16
Jay Shorr
Because if somebody Is making $25 an hour or $50,000 a year, that means that in order to give them 8.7 or 9% I may have to give them $4500 raise at a 9%, rounding it up 8.7 to 9.
00:03:19:17 – 00:03:41:18
Jay Shorr
And that may just be a little more than I want to give them, because a dollar an hour Is $5,000 or $2,000 because there’s 2000 hours in a year, 2000 hours actually, because there’s 2080 hours in a year. 40 times 52 equals 2080.
00:03:41:21 – 00:03:53:21
Jay Shorr
But they have two weeks vacation. So they’re really only working about 2000 hours, but they’re still paid for those 52 weeks in a year with their average time of PTO and vacation.
00:03:53:22 – 00:04:02:15
Jay Shorr
So one of my next questions then becomes, should employees automatically be given a raise every year on a cost-of-living adjustment?
00:04:02:23 – 00:04:19:12
Jay Shorr
Well, you can look at it two ways. One, you can give them an annual raise or you can give them a cost-of-living raise and determine which is higher, not which is lower, because that’s not going to make the employee feel very good.
00:04:19:20 – 00:04:36:15
Jay Shorr
What happens if you just can’t afford to give that raise? That can even be a worst case scenario. Think about the morale that each one of your staff members will feel if you can’t afford to give them a raise. I wouldn’t want to be in that position.
00:04:37:00 – 00:04:44:04
Jay Shorr
So, let’s take a quick look. Should raises be considered once per year? Well, here’s a graphic that’s going to show.
00:04:45:00 – 00:05:05:03
Jay Shorr
If you meet Expectations, maybe we’ll give you a 4.5% raise. If you exceed expectations, you might get a 5.75% raise. And if you are so exceptional as an employee, maybe We’ll give you a 6% raise. Now, all of this must be contingent upon a fair appraisal.
00:05:05:10 – 00:05:11:12
Jay Shorr
And employee review, which naturally should be given once a year at the minimum.
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Jay Shorr
I know in my practice I used to give employees their performance reviews twice a year.
00:05:17:03 – 00:05:19:04
Jay Shorr
One in the middle of the year, one at the end of the year
00:05:19:04 – 00:05:33:05
Jay Shorr
So, that they knew where their opportunities lie. I know that we did a session on this once before of how and when you should give employee reviews, but to be quite honest with you, I always want to know where is my mark for Improvement.
00:05:33:15 – 00:05:44:12
Jay Shorr
So that I know when it comes time for my raise that I have met all of the items and the concerns and levels of opportunities that you feel I needed to achieve.
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Jay Shorr
I always knew when I was in elementary school, high school, college, any courses I’ve ever taken.
00:05:51:04 – 00:06:00:10
Jay Shorr
I knew to the day where I was and what grade I was going to get. It was never a surprise and neither should a performance review. Why?
00:06:00:10 – 00:06:17:02
Jay Shorr
Because when you’re doing a performance review with an employee, you should be guiding them to help direct them to allow them to improve on any deficiencies or opportunities that arise during the course of the year. So then when it comes time for their final performance Review
00:06:17:02 – 00:06:30:05
Jay Shorr
and money is involved, you already know what challenges and opportunities that you’ve given them to improve on and whether or not they’ve done it is a different story. So, what happens if they haven’t done it?
00:06:30:09 – 00:06:31:11
Jay Shorr
Well, you have two options.
00:06:31:16 – 00:06:54:09
Jay Shorr
You don’t give a raise or you don’t keep the job.
Yes. We’re going to take a quick break and a slight intermission, because what kind of business would we be if we didn’t tell you about our own services? I’d like to take a moment to tell you about our conversion cascade online course. We want you to be trained to convert more patients and boost revenue in your aesthetic practice.
00:06:54:18 – 00:07:21:11
Jay Shorr
So with our conversion cascade online course, you and your team will be able to master two key important things to growing your practice and becoming successful, converting and retaining new patients. So, as a step by step sales funnel, the course is designed to help you and your team attract more patients, convert calls to consults, convert consults to treatments and procedures, and keep patients coming back for more.
00:07:22:00 – 00:07:37:06
Jay Shorr
Not only will our conversion cascade Online course help strengthen and develop your team’s phone and sales skills in order to acquire, convert and retain loyal patients, but will also serve as a valuable onboarding training tool for every new team member.
00:07:37:14 – 00:08:00:08
Jay Shorr
Plus, in this course, you’ll receive downloadable marketing checklists, phone scripts, conversion tracking tools and more. Sign up for the course to get started on increasing your revenue and converting more patients today. It only takes less than 4 hours to complete the course. You can finish it at your own pace and you’ll have lifetime access. And as a special thank you.
00:08:00:15 – 00:08:26:04
Jay Shorr
For our podcast listeners, we’re giving you a 20% off discount. Just enter the Code PODCAST to start saving. Click the link in our show notes to sign up for the conversion Cascade Online course and convert more patients Now, what else could anyone ask for?
So let’s take a look at what factors really go into a cost-of-living adjustment raise.
00:08:26:04 – 00:08:30:01
Jay Shorr
Oh, we all know rent
00:08:30:10 – 00:08:39:12
Jay Shorr
Mortgages. Mortgage rates have increased dramatically over the last year. I remember you were able to get them at two and a half to 3%. Now they’re at 5, 6, 7 percent.
00:08:40:02 – 00:08:47:16
Jay Shorr
Rent. Rent has gone up a lot higher than it used to be. The $25 and $50 a month. Now they’re in the hundreds.
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Jay Shorr
Supply chain shortages have really caused a lot of these issues.
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Jay Shorr
Food, I know in the most recent past, We had cold weather in the orange groves in Florida and it killed a lot of them, so the prices of oranges are going up.
00:09:02:15 – 00:09:14:03
Jay Shorr
They had a big chicken devastation. So then, naturally chicken, the price of chicken is going up and the chickens, when they die, and perished, they’re not laying eggs. So the price of eggs went up.
00:09:14:03 – 00:09:31:13
Jay Shorr
Clothing. Health insurance. That never goes down. I know my electric bill with all the work, I’m here in Florida, the Florida Power and Light. They had to increase their utilities.
Supply chain solutions of things just not able to get here on time. And the cost of that, because of the cost of fuel.
00:09:31:23 – 00:09:54:06
Jay Shorr
Increases, the cost of shipping freight, whether it’s on ship, container, airplane, automobile trucks, the fuel, interest rate, as I mentioned, for mortgages, private school tuition has gone through the roof. And lastly, even those optional items of our own personal entertainment has gone up.
00:09:54:20 – 00:10:09:00
Jay Shorr
So all of these things combined, gave us an idea, and here it is, all these different cost-of-living bills that go up that have to increase, so now I want more money.
00:10:09:05 – 00:10:25:19
Jay Shorr
So if prices come down, for example, the cost of gas, can you decrease a stipend given during recessionary times? There’s a temporary price reduction on certain items. Prices of fuel decrease, grocery prices go down.
00:10:26:02 – 00:10:38:03
Jay Shorr
Well, let me ask you, if that happens, are we going to take away the cost-of-living raise that we gave somebody and maybe just giving it and adjust it down to a regular raise?
00:10:38:04 – 00:10:39:06
Jay Shorr
I caution you.
00:10:39:12 – 00:10:56:16
Jay Shorr
That is a dangerous item because people then live and learn to live on the means of the net pay that they received. Whether or not you gave it to them as a cost-of-living adjustment. They’ve learned to live on that new salary.
00:10:57:01 – 00:11:08:16
Jay Shorr
And giving it back, taking it back from them can create a major problem. So what do we do? The age old problem? Well, I’ll tell you what we do. The first thing that we have to do.
00:11:09:00 – 00:11:26:23
Jay Shorr
Seriously, the first thing that we have to do is determine and have a policy in place as to whether or not we’re going to give cost-of-living adjustments, whether going to cost-of-living raises, temporary, permanent, whether or not we’re going to give stipends for fuel in a temporary.
00:11:27:08 – 00:11:37:20
Jay Shorr
I know during COVID, we gave emergency raises. All right. For coming in, not working remote. More people are going to want to work remote.
00:11:37:20 – 00:11:41:01
Jay Shorr
So if I have to pay all these expenses and somebody is working remote,
00:11:41:01 – 00:11:52:02
Jay Shorr
should I give them a cost-of-living increase for fuel since they’re not coming to the office? My suggestion to you is to take everything that we’ve spoken about into consideration and determine.
00:11:52:09 – 00:11:54:00
Jay Shorr
How you want to determine
00:11:54:00 – 00:12:05:09
Jay Shorr
That cost-of-living raise. I might even urge you to have a sit down meeting with your staff, Start with your manager first and get their feeling.
00:12:05:09 – 00:12:23:21
Jay Shorr
Many times people are looking to the almighty dollar and may not be that agreeable with you because they’re looking for that raise. You have to make them understand whether it’s a cost-of-living raise or whether it’s an annual raise due to performance. They are are two different things.
00:12:23:21 – 00:12:32:04
Jay Shorr
Performance is done by an evaluation. Cost-of-living is done by the CPI, the inflation rate, prime interest rates, all these things.
00:12:32:04 – 00:12:43:03
Jay Shorr
Because when interest rates go up, It’s a nightmare because people, mortgages, their car loans, everything that they may borrow money for.
00:12:43:11 – 00:13:09:03
Jay Shorr
So that’s it, folks. I’m Jay Shorr and thank you for attending Shorr Solutions the podcast.
So that wraps up today’s episode of Shorr Solutions, the podcast. If we mentioned any website links, you can find them in our show notes. To work directly with me and our award-winning team of consultants to increase efficiency, increase revenue and decrease costs in your aesthetic practice
00:13:09:08 – 00:13:46:12
Jay Shorr
Schedule a free consult with us today. We will help you establish and refine your aesthetic practices, protocols for maximum efficiency and productivity, decrease your expenses and increase your profitability with an expert financial analysis of your business. Attract more patients, convert calls to consults, convert consults to treatments, and keep patients coming back for more with our sales training, coaching and complimentary access to our conversion cascade online course. Recruit, hire and train new team members and manage any staff turnover with our human resource expertise, plus more.
00:13:46:17 – 00:14:05:10
Jay Shorr
Head over to our shownotes and click on the link to Schedule a free 30 minute consult with us today. And if you enjoyed today’s episode, don’t forget to spread the word and share this episode with your friends, colleagues and the rest of your team. Remember to also follow us on social media at Short Solutions and sign up for our newsletter.
00:14:05:13 – 00:14:30:11
Jay Shorr
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