Josh Swearingen

Good evening, and welcome to the Tusk Practice Sales webinar. My name is Josh Swearingen. I am your host for this evening, and I’m incredibly excited to be with a friend of mine, Bree Black, from Job Snob. We’ve had a lot of opportunities to work together over the last probably year or so, and I think we have a topic this evening that will be very interesting for those of you that are either contemplating going through a sale process or kind of just kicking tires, trying to learn a little bit about what’s going on out there, or possibly contemplating looking at hiring talent and maintaining talent throughout a transition. Just to give you a little bit of background, I’ve been in healthcare mergers and acquisitions and executive leadership for going on 20 years. Nothing too terribly exciting in here but had a great opportunity to meet a lot of people work in multiple verticals, and I’m very happy to be in medical aesthetics space today. Our organization really focuses on healthcare mergers and acquisitions focused on sell side representation. So, we look out for practice owners out in the space, and we try to make sure that you find the right partner at the right valuation, in the right transition for your business, your team and your patients. We have a group of about 14 people on our team, we’ve closed well over $1 billion dollars in healthcare mergers and acquisitions, and if you haven’t noticed, you probably see us in a lot of your favorite trade journals, writing articles and speaking on stage. So, always thrilled to have conversations like we are this evening. At Tusk, we bring a pretty significant amount of investment banking and healthcare executive leadership experience from a myriad of companies all over the country, ranging from small private practices, group practices and regional practices all the way up through large fortune, 2-3-400 companies on both sides. And this evening, joining me is Bree Black, as I mentioned earlier, very excited to have her. Bree, welcome to the webinar. Would you like to introduce yourself and your organization?

Bree Black

Sure. Thank you for having me, Josh. I’m excited to be here as well. As you know, I’m one of the two founders of Job Snob. My business partner Kipper Doty and I met when we were with Allergan actually on the Facial Aesthetics team. Gosh, 10 years of experience in sales, that should probably be closer to 20, but 10 plus in aesthetics, although I’m flattered. But yeah, Kipper and I were working in Beverly Hills as business development managers selling the Botox and Juvéderm portfolios. And prior to that, I had been in the northwest, Kipper was in Dallas. We had worked for a few different companies along the way and held a variety of positions, but it was really our experience with Allergan that led us to start Job Snob, and we realized that regardless of where a practice was or the specialty, or you know, what the strategy was, or the number of locations, or the revenue even, they were always sort of faced with this challenge of staffing and finding good people with experience in aesthetics, and they were always leaning on the reps. We decided to start Job Snob, and in 2019 we were able to quit our corporate jobs and pursue it full-time. Now we have a team. We’re nationwide, and everyone on our team comes from medical aesthetics, and I think that’s something that really is a differentiating factor for us. That means they’ve either worked in a practice or multiple practices, or in some kind of consulting or sales capacity. And we do, you know, not only concierge recruiting, as we call it, which is a very white glove, type of service, we focus on injectors, providers, estheticians, practice managers, medical directors, really, you name it all the way up to C-suite level hires. And as I mentioned, we’re nationwide. We also have a job board that’s specific to medical aesthetics, and that’s a self-managed job board, similar to Indeed or Monster. And then we also offer some acquisition matchmaking services, as we call it. We have some data products on compensation and some other practice resources as well, all on our website.

Josh Swearingen

So, you built out quite an impressive arsenal over five years, it sounds like.

Bree Black

Still working on it, but yes, we’re trying to fill the gaps for sure.

Josh Swearingen

Well, it’s funny, you and your partner must be two of the smartest women in aesthetics, because about five years ago, when you started Job Snob is right around the time that the industry absolutely exploded in growth, and everybody was looking to hire at that point in time. So, and that’s only continued and gotten more and more relevant over the last couple of years.

Bree Black

Yes, that’s definitely the case. As I mentioned, we have our job board, which we really have positioned as a great option for the less experienced or roles that don’t require the same skill level as, let’s say, a provider, which we strongly recommend using our concierge recruiting if you have medical assistant or front office type roles, those do really well on our job board. And as I mentioned, it’s self-managed, so similar to indeed you would, you know, post the position, and then the applicants are directly applying to the hiring manager, or whomever posted it.

Josh Swearingen

Now, are you guys working a lot with kind of individual clinicians that are out there? Are you contracting with a lot of larger groups that are looking at hiring? Or do you kind of vacillate in between the two?

Bree Black

Both. Over half of our business comes from multi-center groups, but we do at any given time have, you know, probably a dozen or so single location practices, and that’s anything from, you know, ‘I’m a nurse practitioner. I started my own clinic last year. Now I’m getting ready to hire my second provider to, you know, a very well-established plastic surgery practice and Med Spa who’s looking to, you know, bring on someone new.’

Josh Swearingen

Well, that kind of leads me into our topic for this evening. And one of the things that I wanted to bring Bree on to talk about was what staffing looks like in today’s kind of age, in the marketplace today. Obviously, we’re seeing significant wage increases across the board in every single industry, and that is certainly mirrored in the healthcare space. But I think one thing that’s relevant for those of you that would tune into a webinar put on by Tusk is it becomes a topic of conversation very, very quickly in the transition world. And the reason for that is when you have a nice, cohesive family, and you are operating a small business, and everything is moving smoothly along. There aren’t, there aren’t a lot of surprises in the space. And you can generally maintain staff and the P&L is yours to manage. And you can, you know, really do whatever you want to bring on the team that you’re looking for. But when you move into a space where either you’re looking to sell, so you’re kind of trying to maximize some of that profitability ahead of a sale. Or you may be in a transition where there may be some unknowns, and you may have a staff member leave, and we do everything we can to avoid that, and so do all of the purchasers. But in situations like that, there are invariably moments during those processes where there’s going to be a conversation with a team member who may be looking for a raise, or who you know, maybe looking to move careers or move to another competitive organization, or something like that. So, being armed with some of this type of information walking into this process will help you plan ahead for potential issues that might arise in the transition process. And I think that’s what we kind of want to dig into a little bit this evening. So, just to step back a little bit and talk a little bit about some of the consolidation that has occurred, I think that it bears noting that, you know, we’re relatively early on in the medical consolidation phase within medical aesthetics, and that’s consistent between plastic surgery med spa and even in the derm space. If you look at other verticals, your traditional medical consolidation, which would be your primary care physicians and your hospitals and things like that, it’s largely consolidated, about 85%, and most of that consolidation is centered around the university systems and the hospital systems, and almost every medical business out there falls underneath one of those two umbrellas. And if you move up, and you start looking at dental consolidation that’s around, you know, estimates of anywhere from 30%-40% consolidated. That’s moving relatively quickly, and we would likely see that in the 50%-60% range over the next 5-10 years, but certainly training medical. And then if you look at medical aesthetics consolidation, this number is an average of all three, dermatology, plastics and Med Spa. But I will tell you that dermatology largely weights that on the higher side, and med spa and plastics really are closer to the 3%-5% consolidated. So, as much as you’ve heard on, you know, webinars and in all the national meetings and things like that about private equity and consolidation and things like that, we are still very, very early on in this process. And so, having a good understanding of how it operates is fantastic for you as an owner and perspective seller down the road, because it provides you with the timeline to really build your business and turn it into something that is a highly valuable, sellable asset at some point. So, the good news is that as we dig into a lot of the buyers out there, you’ve got a lot of, you know, really good, solid private equity groups that are represented already in the medical spa, plastics and derm space, with medical aesthetic space. And I think that whenever you see an industry that is as young as this one within a consolidation phase, you invariably have a lot of good actors and bad actors. And when we’re looking at the prospective buyers out there, we’re really digging into who their capital partner is and who’s writing the checks behind the scenes. And because a lot of these groups, and this is just a small example of several of them, a lot of these groups have had a lot of opportunity within other medical spaces, behavioral health, dental, things like that, and we’ve worked with many of them on multiple occasions, and are now moving into medical aesthetics and represent some of the brands that many of you are very, very familiar with. So, I think it’s really nice to know that this early on, there are some really, really good buyers out there that are providing really nice valuations, doing a really good job taking care of patients, taking care of team members, and providing owner operators with an off ramp that can really create a tremendous amount of long-term value for your family.

Bree Black

I’d love to add something here, Josh, just from our perspective at Job Snob, we’ve also had the sort of unique, I will say, experience of working with practices and working with some of these big players on the bottom and getting a chance to see this sort of before and after a transaction occurs. And luckily, the ones that you have listed tend to do a pretty good job in terms of retaining staff and making sure that everybody’s happy on both sides.

Josh Swearingen

It’s funny when we’re going through a transaction, you can always get a feel for how successful it’s going to be post-close based on how the buyers treat the team members through the process and how cognizant they are of, you know, the benefits stack and the pay structures and all the various things that are going to be critical for those team members, because the team is, it’s the life blood of the practice. And I think that, as you mentioned, I think the ones along the bottom here do a very, very good job of that, and most of them do. Most of them have realized, especially in the healthcare space, that it’s very much a people-broke business, and that really, really starts with the team members and how they take care of the patients.

Bree Black

Absolutely.

Josh Swearingen

So, as we kind of get into the meat of this, and we’ll have a little bit of back and forth with Bree and I, when we’re talking to prospective sellers, and we’re looking at valuation, you know, there are some really significant factors that can impact the exit value of your business. And for the purposes of this conversation, we’re really going to focus on three. And the first one is provider revenue concentration. This would be generally termed key man risk. And the second would be patient retention and loyalty. And then the third is provider turnover and staffing stability within the business. And these are all things that are measured by prospective buyers when they’re looking at valuing a business like yours. So, we’re going to talk a little bit about assembling the right team, key man risk and fair market value compensation. Bree, do you want to kick us off on this one?

Bree Black

Sure, so. I mean, from our perspective at Job Snob, we often come across practices when maybe they’re just starting to sort of think about the future, maybe 5+ year plan, 3-5 years often, and they haven’t really considered what it will take to position themselves in a positive light with a potential buyer. So, I mean in terms of assembling the right team, I cannot say enough, and I’m sure you will wholeheartedly agree, Josh that, especially in this business, where you have people generating all of the revenue in the practices or the clinics, the right team is everything. And that’s one thing that you will see consistently, regardless of who the buyer is or what they’re looking for. And part of that comes from, you know, not just the overhead, which everyone’s going to calculate during the due diligence phase, but also, you know, how can you grow that that team and also retain them.

Josh Swearingen

When you’re talking to prospective employees that you’re looking at placing, how many of them are asking questions like, you know, what are my growth opportunities within this business? What are my opportunities for advancement? And, you know, those types of questions.

Bree Black

I mean, 100% of the good ones ask that. Especially if this is a revenue generator, I would be concerned if somebody wasn’t looking to grow. You don’t want them to grow and then, you know, open up a competitive practice across the street, but hopefully someone who wants to grow with your brand. But the key man risk is one that I think most often we are surprised that owners don’t realize is going to be a potential negative factor. We get a lot of, you know, there’s a lot of egos in medical aesthetics, and I think the providers and the owners who work in this industry are, you know, aware of this, but a lot of our owners, who are providers themselves, have built a really successful brand on their name, and their name is the brand, and they’re generating, you know, millions, if not $10s of millions of dollars of revenue with their name on the sign. But unfortunately, if that’s not spread amongst the team, then, you know, that’s the definition of key man, risk. So, you know, what is seen as a positive can become, you know, a short a shortcoming very quickly.

Josh Swearingen

Yeah, I couldn’t echo that more. I think that we regularly talk to prospective sellers. And, you know, one of their comments, I mean, they’re very proud of the business that they built, as they should be, and they’re very proud of how efficient they are and how well they do procedures and many of them will say, you know, ‘I do all of these procedures, and I do them because I do them better than anybody in my area. Nobody can do what I can do.’ Which is great, but I think from a buyer’s perspective, one of the things that you have to sit back and look at is, ‘all right, what if the worst case scenario happens, and this provider gets injured over the weekend, or can’t come into work or something like that. How do I replace that?’ And I think by having a conversation. And hopefully you’re doing this Bree, but by having a conversation relatively early on in the formation of an organization, or at least pivoting to this at some point that ‘hey, you know, the more we can spread this around, the healthier the businesses, the more we can weather any prospective storms if an employee does actually decide to leave or move on or something like that, the healthier the business is long term,’ which is really what all of the buyers are certainly looking for, and ultimately, the owner operators presently are looking for.

Bree Black

Absolutely. And I mean, as a business owner, and I’m sure you can appreciate this, sometimes it’s hard to let go of that control when you’re a perfectionist or you’re a high performer and you want to maintain a certain level of quality that your patients have come to expect, and that’s all very normal. But I will also say that when you’re looking to bring on new talent, having this high concentration of one person who does almost all of the procedures, or all of the you know the high revenue procedures can be really deflating for that new team member. So having a good system in place to transition patients and build confidence in your new team member or members is crucial as well.

Josh Swearingen

When you take on a client, and I would think this would be more relevant if you’re working for kind of a larger group, do you help them restructure some of those types of things to make it more efficient in bringing on providers, spreading out some of that risk and some of that production?

Bree Black

Yes, if they’re willing, we certainly do. We’re working with a really great practice in the Dallas area right now, for example, and got this exact situation happening, she’s generating a ton of revenue, and on paper, this would be the ideal practice for any buyer if she didn’t generate 90% of the revenue. And she wants to sell. So right now, we are looking for one or two people who can immediately start to take over some of that patient load and continue to build on their own. And I think she’ll be, you know, probably nine months, in a much better position than if she were to try doing it now.

Josh Swearingen

Great. That’s actually great to know. I didn’t know how much you got into kind of that human capital consulting, but I would imagine, that’s incredibly valuable out in the space.

Bree Black

Absolutely. And I mean, it’s in our best interest to hire people for our clients who they will retain as well. So, some of this just goes into ‘what are the building blocks of a sound practice and a good business that will continue to sustain a high level of growth over time?’ Whether or not you want to sell one day.

Josh Swearingen

Sure, I think we’re going to get into fair market value compensation a little bit later. So Bree, do you want to kick us off on some of your kind of hiring and retention strategies and how we can look at this and unpack it moving forward?

Bree Black

Sure, absolutely. Well, concierge recruiting, really, at Job Snob, is still the foundation of our business, and that is essentially an investment in human capital. So, we sort of summarize what does that look like into three primary groups, if you will. And where should you invest in human capital, or how, rather. Onboarding is key. We see far too often the expectation that, because someone has done the job before, they should be plug and play, so to speak, and that, you know, regardless of the talent you’re bringing in and how tenured they are, or where they’ve worked previously, it’s absolutely crucial to make sure they understand what their expectations are, making sure that they feel like they have the support that they need, and that they’re given feedback to, you know, improve and or continue to do what they’re doing well. And it’s, you know, kind of surprising how much that’s lacking, even in very well-oiled machines.

Josh Swearingen

Yeah, so that was actually going to be my question was, how often do you actually run into businesses that have kind of an onboarding operating procedure and have the roles and expectations properly set up?

Bree Black

I think having them and actually using them are two different things. We run into a lot of clients who have, you know, a beautiful SOP, and they’ve, you know, in theory, got all of these great onboarding guidelines, but in reality, they’re turning people over, especially like in administrative roles, every six months or nine months. And when we sort of get the background information, we’ll often find out that this is, I’d say, probably half the time, this is the biggest missing piece. And so, and a lot of times it’s just a miscommunication. This person wasn’t doing something because they didn’t know they were supposed to do it, or no one taught them how to do it, which is a very fixable, almost, sort of frustrating reason to lose someone from my perspective.

Josh Swearingen

Sure, I think it’s also, and a lot of this kind of comes from the top down. You’ve got a lot of people within the medical aesthetic space that were either previously clinical in nature or may not have ever had a lot of management or leadership experience to get elevated into those roles without a lot of proper training or mentoring for those roles. So, I think that, and this is consistent in every healthcare vertical that we’ve operated in, and we’ve looked at, you have a lot of mid-level managers who have all of the best intentions, they just haven’t been given the tools to really be the best version of the role that they’ve taken on. So, I think that from the top down, understanding this and applying it and then delegating it to someone else to manage is critically important.

Bree Black

So, I think this is just really looking at why employees leave, or like the frequency that they leave. So, it’s kind of mind boggling when you consider that anything under 40% is considered low per turn over. And only 20% of employees who leave are leaving for compensation as their primary reason, which I think there’s also a misperception out there that so much has to do with that total number that someone’s earning. Yeah, and then the third, oh, go ahead.

Josh Swearingen

Do you have any insight into the other 80% of the employees?

Bree Black

Yeah, absolutely. I think that one of the slides that we’re talking about in a few minutes might touch on that, but it really has to do with the other room for growth, feeling valued and heard and having, you know, a clear path for training and continuing career development, and then the culture.

Josh Swearingen

Got it. Interesting.

Bree Black

But the third one for me is exciting because of my role as a recruiter or as a recruiting agency. But I kind of say that in jest, but that’s the most shocking to me is that at any given time, half of employees are at least passively open to new opportunities. And we’ll get questions all the time during an intro call with a new client, ‘well, are you going to try to poach people from my competitors or from other practices?’ And our answer is always ‘no, you know, we vet people with opportunities, and if they choose to come over, that’s on their current employer.’ You know, if they’re, you can’t steal the willing, if that makes sense If somebody’s pleading, they need to, you know, or if they’re losing staff, someone needs to look at their own operation versus that, that person or who “stole them.”

Josh Swearingen

Yeah, we have a plastic surgeon in town that I know reasonably well, and he’s constantly complaining that he is losing staff. He has incredibly high staff turnover, and I’m sure that you’ve run into this before. But he also has a very close family member who’s operating as the office manager, who isn’t as light as she probably needs to be, and that’s one of the reasons for the turnover, and it has nothing to do with any of the compensation side of things, or anything else. It is, he’s unwilling to make a change in his management infrastructure to save himself the headache of the overhead. So, it’s interesting.

Bree Black

That’s a tough one. Far too frequent, especially in plastics.

Josh Swearingen

Yeah, all the time. It’s really funny. I was just thinking about this, and it hadn’t even struck me until now. You know, when we look at turnover, those are the types of things that can really either kill deals or slow the deal process down on the transition side or transaction side. And it doesn’t bother you at all. You’re looking forward to those opportunities.

Bree Black

Well, not necessarily, though, because if there’s a lot of turnover, you know, this is a very intimate industry. So, it’s a lot harder to fill a position with a practice that doesn’t have the best reputation for retaining people. And also, our chances of having to backfill that person are higher. So, you know, sometimes we will, you know, kindly let potential clients know that maybe we’re not the right fit for them based on their structure and their track record. Yeah, we’re happy to provide candid feedback as well, and sometimes people are gracious enough to listen.

Josh Swearingen

That’s great.

Bree Black

So, this is what I mean, it’s sort of the reverse of what you were asking earlier, you know, why do people leave. On the right or, I mean, sorry, on the left, this sort of summarizes all of the reasons why people might be open to a new opportunity. Of course, compensation is there, but as we know, it’s not always the number one reason. It’s usually some part of it, but not the primary reason for leaving. But work life balance, I think post-Covid, we saw a major shift in providers wanting either more flexibility, not just providers, really everybody wanting some sort of balance between being in clinic or on site versus at home, or at very least like with hours and scheduling. Benefits, especially in the med spa space, I would say maybe 5-7 years ago, it was less common to see a small, single location med spa offering a comprehensive benefits program, including healthcare and 401K. And now I would say we see it more often than not. Even the brand-new practices know, if they’re not offering it, it’s something they’re aspiring to do in a short period of time just to attract and retain good talent.

Josh Swearingen

Now is that a reaction to some of the larger groups coming online and beginning to offer those as a competitive advantage?

Bree Black

I think so, and I think that it’s just something that more and more people want. And you know, we talked about this a little bit, it’s such a competitive space that you do whatever you have to do to secure your revenue generators in particular. And then, you know, culture, of course. You know, is this a place where I feel accepted and valued, and that’s reflective of my own personal values? And then also, you know, is there room for me to grow here?

Josh Swearingen

When you’re talking to candidates, is there any kind of a predisposition towards group practices or working in a multi-site environment, or anything like that?

Bree Black

I would say that we actually, on the flip side, get some sort of heavy hitters, if you will, who are anxious about that. Maybe they’ve heard from someone else, or they’ve heard of that brand before, or they, you know, came from a traditional healthcare background where they saw, you know, small private practice get rolled up into a bigger institutional setting, and they saw the aftermath of that that maybe wasn’t as pleasant. Or they’ve heard something through the grapevine that this big group only cares about profits more than patients. And as you mentioned, so many of them do have a true clinical background where they got into this to treat patients and care for patients, not to, you know, look for profit or revenue first. And so, I think it’s really just a matter of, does that brand do a good job mirroring the values of the staff versus, you know, looking at spreadsheets and giving people metrics all day versus, you know, what they really care about?

Josh Swearingen

Yeah, it’s really funny. I had this conversation with a couple of people at The Aesthetics Show about a month ago. And, you know, you hear all this noise about private equity moving into the space, and they’re bean counters and this and that and the other.

Bree Black

Well, they are. *Laughs*

Josh Swearingen

Well, that’s true. You’re right. So, but you hear those conversations and I think that, you know, there’s some level of excitement for the opportunities that that provides. But I think, going back to one of the earlier slides, like the reality is that there are, I think on our buyer list we probably have 200-300 different listed private equity groups and group practices that are all looking to acquire. And I think understanding who is, you know, anytime you work with a development person, they’re always going to be nice, because that’s what they’re hired to be. They’re hired to be really nice, good, amicable people that are easy to talk to. I think understanding who’s behind the organization is critically important. And if you can compare and contrast that with other industries where that organization has been active, I think you can get a really, really good feel for what that cultural fit is going to look like. And the better organizations that are out there do a really, really good job clearly defining what their culture is, and the types of organizations they’re looking to partner with.

Bree Black

And I would add on to that, Josh, not just defining it, but actually embodying it. I think that my advice to your potential sellers would be ‘ask the questions and then ask for examples of what happens after and talk to people who’ve been through it with that particular buyer.’ I mean, we do a lot of sort of matchmaking, as you know, with buyers and sellers. We get call after call of a group telling us how they’re different than everybody else. It’s almost like a chronicle where it always starts off talking about how they’re different. And really, at the end of the day, what they’re looking for is exactly the same, and they might very well be different, but to me, the proof is in the pudding. It’s not, you know, what’s in your deck, or, you know how nice you were at dinner. It’s, you know, how do you treat people after the transaction has closed, and what is the growth and all of the sort of aftermath, 1, 2, 5 years down the road. And I think that’s very telling, like, what is your retention before and after of your key staff members? That’s a huge consideration that I would make as a potential seller.

Josh Swearingen

I completely agree. I had a really funny conversation about a week ago at a conference, and I had a conversation probably two years ago with this brand new group that had just sprung up. And the seller was sitting down, and he was telling me all these wonderful things that they do and how they’re different, and how their deals are different, and this, that and the other and I very distinctly, and I wasn’t trying to be curt at all, but I was trying to give them constructive feedback. And I said, ‘listen, every seller or every buyer out there has this pixie dust that they just sprinkle all over everything, and they think it makes it look perfect and different and unique. And the reality is you need track record, and you need to actually live in it, and you haven’t been formed long enough to know.’ And he came back to me, that was two years ago. He came back to me a month ago, and he said, ‘I thought about that comment for the last two years. We had pixie dust for the first six months, and I sprinkled it on everything. And now I really understand we are different.’

Bree Black

That’s great to hear, though. There are some out there that really are different. To me, they’re more of the exception, as far as you know, what I’ve seen in the limited, you know, transactions that we’ve been privy to.

Josh Swearingen

Yep, I completely agree. I think there’s some really, really good, well run, well managed organizations that are doing it right and will have a very long term impact on this industry. And I think there are some that they’re looking to come in and they’re going to make money, and their sellers are probably going to make money, but there’s going to be some carnage along the way. And, you know the key is avoiding the latter. And then keeping capital development.

Bree Black

So, the second one after onboarding, we identified was career development. So, how do you continue to keep someone interested and happy and offer them the growth that they’re looking for, even if they stay in the same role? Like, you know, someone who’s an injector or provider or an esthetician is probably not going to become, you know, a senior executive in your greater organization. But how does that person stay, you know, engaged and fulfilled in their current role? So, having a mentor or a coach or somebody who they can lean on or that they admire within the organization, if possible, defining those career pathways during the onboarding process ideally. We are big on performance evaluations. This is another thing that a lot of people talk about, and it’s sort of a great intention that’s not often followed through on. But people really like to know where they stand. And that doesn’t mean punitive necessarily. It might be giving someone something to work on, as well as all of the great things that they’re doing to succeed in their role, and then creating SMART goals to help develop those areas that are opportunities.

Josh Swearingen

Now, do you help some of the organizations you work with with these? I mean, this is pretty high-level human resources development. Are you partnering with them as you’re bringing team members on board to help them accomplish some of these?

Bree Black

We don’t. We sometimes will consult on these areas a little bit. Really, we offer a new hire resource kit that gets into the specifics. Kipper and I developed it ourselves. It took a long time, and it’s based, you know, specifically, on experiences with medical aesthetic practices. Because I think a lot of the resources out there are for businesses that are structured very differently, or for like, medical type of practices, traditional medicine. So, our new hire Resource Kit is a great place to start. And then we also refer to some other consultants who really do kind of specialize more in staff development and efficiencies.

Josh Swearingen

That’s great.

Bree Black

And then the third area is just, so you’ve done these things, you onboard someone successfully. You’re helping them grow. And now, how do you retain them? And I mean, these seem like, you know, pretty basic factors, but usually one or two of these being overlooked is enough to lose someone good. So not providing communication so much could get lost in translation, or just the lack of having open communication. Recognizing people is huge. I think there’s, everybody likes to be recognized, and that might be different, but understanding how people like to be recognized, whether that’s in front of their peers or financially or, you know, just a handshake from their direct supervisor, or a special, you know, coffee or night out with the team. But just understanding what people need to feel valued. And then, autonomy is huge. This is one that we hear about quite a bit. You know, if somebody, go back to that, like model, where you’ve got one provider or one owner who’s got a lot of control, and their intentions good. They want to maintain a high level of quality, but sometimes that comes at the expense of their team’s empowerment. And people who feel empowered and are given autonomy stay. They feel valued, they feel like they’re contributing to the greater organization, and they stay. I mean, there’s a lot of data on this, not just in medical aesthetics. Teamwork is huge. That seems like a given, but we will see big, successful practices that almost unintentionally pit their providers against each other, where, like, you know, you’re almost competing for who’s the number one producer, or whose patient is this, who actually sold this package, versus, you know, we’re all here together to build this. And, you know, rising tide raises all ships., or however that expression goes. I’d say being collaborative versus competitive is huge. We talked about career growth and work life already. Surveys, feedback just goes back to communication. Get feedback from people, ask questions, and they usually will tell you how they feel, and then have people in leadership positions who embody the culture that you’re trying to build.

Josh Swearingen

So we run into this a lot, and this is a little bit more probably, obviously, everything that you’re talking about is, how do we retain these people for the long term? As it pertains to a transition process, do you have any suggestions for keeping your key talent through a transition? How you should communicate with them, potentially, how you should incentivize them?

Bree Black

Yes. So, in the first half of the question, I think one of the mistakes that I’ve seen on several occasions is the sort of inclination to keep people in the dark, thinking that I’m going to create this panic, or this uncertainty is going to cause a mass exodus, when really it’s the opposite. And most of the time, the sellers who we’ve worked with at least, are very, their intentions are good, and they do truly care about their team and their staff and their baby, which is their business and its future success. So, their goals are aligned with their team members’ goals. So, being transparent, you know, at the time where it’s appropriate, of course, without disclosing anything, that’s, you know, where it wouldn’t be I think is huge. And then I’ve seen some really successful transactions take place, where you’ve got key players who end up with a little bit of equity or something, so they have some skin in the game too, and they feel like they, even if the owner didn’t necessarily have to do that, or wasn’t contractually obligated to, they, you know, maybe give them a little bit of equity or some sort of profit sharing or other incentive to keep them engaged and feeling valued.

Josh Swearingen

So, they’re primarily identifying kind of the key drivers in their business and saying, ‘you’re important for this, so we’re going to give you…’ Now, do you generally recommend, and this will get into one of our next slides here. But do you generally recommend setting up a profit share with your key, or equity share, with the key employees ahead of something like this, I mean, as a, basically an initial comp package?

Bree Black

I would. I’ve seen what happens on the flip side when you lose someone important, and it’s not just the revenue drivers, it could be a very influential and loved manager, even who leaves and then three people follow her or him. And you know the potential risk of not doing that to me is too high, where I would do what I needed to keep people happy. And also, it alleviates fear, because you can tell someone 100 times that ‘we’re going to retain you. In fact, it wouldn’t make sense not to retain you, like we need to retain you in order for this business to continue the way it is.’ But I think there’s always an underlying fear when something changes. It also gives people peace of mind that, ‘not only am I going to continue to have a job, but I’m being actually rewarded, or I have future growth opportunity because of this.

Josh Swearingen

Yes.

Bree Black

I mean, this touches on what we talked about earlier a little bit, but it’s not just compensation, but it’s when you survey practices and employees, compensation and culture are always among the top concerns that are listed, not necessarily one and two or one or two, but they’re always among the top no matter how large the pool is, or where you go or who you ask just. I said earlier, compensation isn’t usually the number one reason people leave. It’s usually part of the equation. And then culture is almost always, you know, a make it or break it. We have some practices that are sort of well-known in the industry, where they pay, like 25%-40% above market, because they have to. And they’re like, kind of well-known successful practices where they probably do great work, objectively. But you know, there’s such a nightmare, place to work where they have to pay people so much just to retain them.

Josh Swearingen

So, if you’re an employer and you’re paying well over market for your team members, you need to start asking some questions?

Bree Black

Yeah, well, and then there are the ones who are paying well over market because they just don’t know what they’re doing, and they’re wondering why they’re not making any money.

Josh Swearingen

Got it. Well, I wanted to touch a little bit, and I know that this is really in your wheelhouse, and you have a fantastic tool that is available for purchase, but I wanted to talk a little bit about some of the common compensation models that you’ve seen that have been really, really successful. And maybe if you could, I mean, I think we’ll probably look at this primarily from the provider standpoint, either, you know, a nurse practitioner, PA, you know, whatever you want to call it, or an injector, or, I guess, an esthetician as well, depending on the state that you’re in. But if you could kind of give us some best practices for building out a comp plan that will kind of entice that top level talent and bring them in and keep them happy, that would be great.

Bree Black

So, this comes from our med aesthetic, pulse compensation data. We have a data product that we now sell at PDF version. It will eventually be an interactive platform, but right now it’s a quarterly sort of suite of products, if you will, that are nationwide. It’s based on, I think about, gosh, 2,000 or 3,000 records right now, and this is all taken from people that our recruiters have screened, or from people who are Job Snob members who have joined our site and have, of course, anonymously disclosed their compensation. So, we’re compiling that data and providing benchmarks and trends comparing different regions and different positions. We have it for five positions or six, I believe right now. The injector is sort of the hottest topic, but we also have practice manager, PCC, Esthetician, front office and front office/reception and medical assistant data out there, so all worth checking out to get more information. And we’ll continue to update those quarterly with more and more information as we get feedback from people, but by far the most common compensation model we see, and that we hear people are being paid, regardless of the region, is hourly or so salary plus commission. And with providers, it does lean heavily on hourly plus commission. Commission is a very tricky word because of the different legal parameters in some states, so I’m using it loosely, but really, I would say hourly, plus some sort of performance-based incentive. And, you know, have your attorney figure that part out, but you’re essentially, you know, rewarding people based on their productivity.

Josh Swearingen

Got it, and is that usually based on…is that inclusive of kind of products that are sold and packages that are sold and all of that kind of stuff? Or overall? Or do you have it broken down that granular?

Bree Black

We do. Our compensation data reports don’t right now. Yeah, it’s pretty hard to standardize that information, because there’s not only different commission levels for different kinds of procedures and products, but then there’s also gross versus net and the way that those can be calculated. And then there’s tips or no tips, which we’re starting to collect and publish data on as well, which is a very hot topic, and state-dependent also, but can make a real difference for people’s, you know, total earnings for sure.

Josh Swearingen

Are you seeing a movement away from tips, or are most organizations still allowing them?

Bree Black

It’s very geographically driven. I’m in California. I don’t believe that’s legal here. I’ve never had, you know, in my probably hundreds of esthetic procedures at this point, I can’t imagine, like my plastic surgeon getting a 20% tip on the screen when I’m walking out after spending $1000s of dollars. But I mean, in Texas, you very well could, even at a reputable Med Spa after you just spent $2,500 on procedures. You might not tip that 20%, but I think that that’s just kind of the standard in a lot of med spas. We don’t see it, I mean, derm, absolutely not. It’s rare. I’d say plastics are pretty rare. But med spas, and part of that’s the este, the esthetician treatments, it’s more common. And sort of in that, like spa, non-med spa environment, so some of that spills over.

Josh Swearingen

Yeah, we’ve seen that here in Ohio a good bit, where the actual injectors don’t receive tips. They have, you know, their compensation plans are all over the place, but they don’t receive tips. But the estheticians will still receive tips. So, it seems like that’s how they’re bisecting here.

Bree Black

That gives it a, ‘is the procedure medical in nature or not?’

Josh Swearingen

Right, right.

Bree Black

In some states, estheticians can even inject, or, you know, more commonly operate energy-based devices, even like some of the more invasive lasers.

Josh Swearingen

You bring up a really interesting point. I think that’s something that we’re going to see change a lot over the next few years. I think that anytime you have large aggregators, or, you know, buyers moving into the space that are, especially if they’re crossing state lines, there tends to be some sort of a standardization regulatory environment. And, you know, I’m certainly no attorney, but I think we will start to see that happening over the next several years, where it’s going to be a little bit more standardized from state to state, which will be great for some people and probably not great for others. But I think that’ll be very interesting to keep tabs on.

Bree Black

That’s a good point, and the industry will adapt people who think it’s not going to be great will figure it out. I mean, there’s so much growth to be had, and so many different procedures and products and novel entries into the market every year that they’ll find something else to offer. That is interesting.

Josh Swearingen

And so, this the guide that you were referring to?

Bree Black

Yep, our med aesthetic pulse report. So, we have national and regional data by role, as I mentioned, we have a lot. I mean, there really isn’t a large data set like this in the industry. There are a couple other smaller reports that are published annually, but they’re usually about a year outdated, and then they’re a small sample of, like maybe 1-150 or 200 self-reported. So, we, yeah, we’re proud of this. We worked on it. Kipper and I personally have scrubbed every single record in there to ensure its accuracy. So, it’s taken, it took us a very long time to bring it to the market, and we’re just trying to continue to grow it and make sure that what we’re offering is what people are looking for.

Josh Swearingen

Awesome. Well, thank you so much. I just noticed as I’m flipping through these that I don’t actually have your contact information. You want to give everybody your website address?

Bree Black

Yes, so we are jobsnob.net or, actually, I think you can do jobsnob.com and it redirects there now. Or email, [email protected]. There’s plenty of contact forms, and our website’s pretty straightforward, so it’s easy to get in touch with us, but please reach out.

Josh Swearingen

Absolutely. Well, thank you for your time. I appreciated this evening, For those of you who may be interested in a practice valuation, whether that’s at the front end of this process, or maybe the transition is a few years out, we can give you a really good barometer to measure off of, and give you an idea of where you are today and then potentially where you want to go in the future, so you can reach us at TuskPracticeSales.com. My name is Josh. Thank you again for joining us this evening and have a great night.

Bree Black

Thanks, Josh.