The Private Practice Success Podcast

61. Remuneration Roulette: Why Guessing What to Pay Your Team is Costing You More Than You Think

• Gerda Muller • Episode 61

Share episode

Use Left/Right to seek, Home/End to jump to start or end. Hold shift to jump forward or backward.

0:00 | 29:00

In Episode 61, Gerda tackles one of the most stressful and high-stakes challenges for group private practice owners being: Remuneration.

If you’ve ever felt a wave of panic when a clinician asks, 'So, what’s the pay?' or found yourself trawling Facebook groups, job ads, or just 'going with your gut' on salaries, then this episode is for you. 

Gerda breaks down why most practice owners are playing remuneration roulette where they are making emotional, scattered, and comparison-driven decisions that can quietly wreck the profit, sustainability, and sanity of their business.

In this Episode, you will learn (among others):

  • The most common and costly mistakes practice owners make when setting remuneration and why doing ‘what everyone else is doing’ isn’t a strategy.
  • What actually needs to go into a sustainable, fair, and competitive remuneration package.
  • How to move from desperate remuneration decisions to a practical framework for making confident, data-driven offers.
  • Why getting this right protects your profit, your team, and your own wellbeing and what to do if you need to course correct.

Who This Episode Is For:

  • Anyone who’s ever felt lost, anxious, or pressured when it comes to setting pay rates for clinicians or admin staff.
  • Practice owners ready to ditch people-pleasing and comparison and build a business that’s both generous and sustainable.

Tune in for a candid, practical conversation that will help you take control of your numbers, protect your practice, and build a business you can’t stop smiling about.

The 2-Day In-Person 2026 Private Practice Business Intensive

For all the details or to get your ticket CLICK HERE.

Want Gerda's Help with your Business?

Gerda helps allied health group practice owners go from overwhelmed, overworked, and underpaid to fully empowered and financially thriving. If this is you, then make today the day you reach out. Complete this super short Triage Form here bit.ly/triageformpps and Gerda will personally reach out to you. 

Here to help you build a practice you can't stop smiling about :)

Connect with Private Practice Success & Gerda here:

Well, hello there passionate private practice owner. My name is Gerda Muller, and you are listening to the Private Practice Success Podcast, and this is episode number 61.

The topic of today is, wait for it - Remuneration Roulette: Why Guessing What to Pay Your Team is Costing You More Than You Think. This, my friends, is something that is possibly one of the most stressful, confusing, and costly things for group private practice owners out there in our industry, and that is what to pay our team.  I'm particularly talking about what to pay your clinicians. You know, what is a fair pay? What is competitive in the marketplace? What is going to keep your clinicians happy without killing the profit within your business, and how to do this without guessing. Because unfortunately the truth is most practice owners are not making data driven remuneration decisions.

The Problem   

Instead, they are playing Russian roulette when it comes to what to pay their clinicians. And this might even be true of you, maybe you are not realising it. But when you aren't making data driven decisions when it comes to your remuneration packages, what you are, in essence doing, is you spinning that freaking wheel. You’re crossing your fingers, and you just hope that that little ball that's going around in circles isn't landing on bankruptcy. That is what you are doing. And that's why this is so stressful for practice owners. You think it's not you? Let me paint you this picture.

How it happens

You are a group practice owner, you might even be a solo practice owner looking to expand. You are driven by this passion to help more people, and you've realised that as one person or maybe just yourself and one other clinician, (however many people you have on your team), that in order for you to help more people and impact more lives, you need to hire another clinician. So you put out your ad, and you work really hard at getting the wording right. You work really hard at getting eyeballs on your ad. Finally, people are starting to apply. You are shortlisting. Maybe you've got the privilege of being able to shortlist because you've got more than one applicant, right. You're doing the interview and finally it gets to that point and the person says, ‘Oh, well, I'm just interested in finding out what is the pay or what is the remuneration package like?’

Cue the stomach drop. Cue, the sweaty palms, the internal panic. Because you want to sound really confident and professional - you want to be within your soul, you want to be generous. But if you are honest with yourself, you've got no idea what that number is and what that number should be. So what do you do?

How not to make Remuneration Decisions

If you get asked in the interview, ‘What is the pay?’ You might sidestep this question and say, ‘Hey, I'll get back to you.’  Maybe if the person is reached out via email or enquired, or maybe they have asked in the interview and you say, ‘I'm going to get back to you.’ But what do you do? Really think about what you have done in the past? What I see a lot of people do is jump into Facebook groups and, you know, maybe do a bit of a search and see what other people have said about this. Or maybe even, you are brave enough to ask the question. I want to give you kudos for asking the question, for being brave enough. But the thing is, that's not how you make this decision. Yes, it's going to give you a broad idea of what others are doing. But guess what? Just because others are doing it doesn't mean that they are doing it the right way. They've probably pulled their numbers from their asses as well. Right? Well, that's how a lot of people do it. Maybe you're going - no I don't do it that way. I'm a bit more clever than that. Gerda, I know that it's not a really good way to research. 

Maybe you have gone on to Seek, Indeed or Psych exchange (if you're a psychologist), and you're scrolling through all the job ads. Maybe you've even put in your city, if you are in Melbourne and you've put in Psychologists Melbourne. You scroll through and you're writing down those people that have actually popped down what it is that they are paying, which is normally a range, which could be a really big range, like $30/$40,000 range. You write it all down, you're going, ‘Oh, people are offering $95,000 a year, $100,000, $120,000, and you start to realise that there's a pretty big range. Then you're thinking, ‘Oh, I'll just go in the middle, maybe I'll just go in the middle, I can't get it wrong.’ Or maybe if you're really desperate, you're going, ‘I'm just going to pay the top of what people are offering, because I really need to get this person.’  Do you think that's the way to do this? Is that a data driven way to run your business? Hmm. I don't know. What do you think?

Well, maybe there's a third way that you can do this that I see a lot of people do, and they ask the candidate, ‘What would you like to be paid?’ And they go, ‘Oh, I want to earn $120,000 a year. And you go, cool bananas. I'll just give you what you want because I want you to say yes to my business because I've got people sitting on a wait list, and it's keeping me up at night - and as long as I can look after those clients, because I'm a heart driven, allied health professional, I help people, that is what drives me - I'm just going to give you whatever it is that you want, and I will deal with the rest later. This might sound ridiculous as you're listening to me saying this. But I can tell you that in the moment, in real life, back at the practice, this is happening every day for practice owners, and we don't realise that this is how we are making these super important decisions.

Because the thing is, once you've made somebody an offer and they're an employee and they're on a contract, it's really hard to walk this shit back. So you have to make the right decision. And let's be clear here, I'm not saying pay your team shit wages, that's not where I'm going with this. So keep listening.

The Consequences of Remuneration Roulette

The thing is this, if you are making remuneration offers just by pulling the numbers from thin air with no real strategy behind it - not looking at your numbers, not looking at your overheads - that has real consequences. Consequences that you're not going to feel today, but you're going to feel it down the track. And I know because I've seen this happen over and over again with practice owners. Practice owners who thought that they're going to be okay by making a certain offer. Practice owners who really wanted to be seen as  ‘generous’ good practice owners, like I'm one of the good guys, right? I'm one of the good guys, I'm going to offer you what you are worth, and I'm not saying people aren't worth this. But that thinking behind it, only to realise 3, 4, 6 months in, that they're overpaying. To realise that they've committed to wages that maybe they can pay, but what it means is that they can no longer pay themselves a wage. I've spoken to practice owners who've had to go into their mortgages to cover their own household expenses because they couldn't pay themselves because they are good practice owners and they always pay their team and they pay their team no matter what's happening, but that means they can't pay themselves. 

Practice owners who have realised that they're not making any profit whatsoever, they're actually running at a loss. Practice owners that started their practices to be able to have more freedom and flexibility only to find that no, not only do they still need to continue doing lots and lots of client work, taking on more and more clinical clients to supplement the revenue in the business. Working after hours after the kids are in bed. Having to work Friday nights, Saturdays, Sundays - just to keep the wheels turning and not falling off, so that they can retain their team and so they can keep on helping the clients coming through their doors, because it's hard. Like I said earlier, once wages are locked in, you can't walk it back. Especially then - and this is that additional layer - if you've got a clinician, you're paying top dollar, and this person isn't retaining clients or they're not meeting the reasonable KPIs that you've said. I can tell you 9 out of 10 private practice owners, the KPIs they are setting for their clinicians are very reasonable. I probably, if I think of the last 12 months, I've not spoken to one practice owner that has unreasonable KPIs.

The majority of the people that come into my world , their KPIs are too low for their team. And the other half have got KPIs, but the team isn't meeting it and they aren't doing anything about it. It's just like, oh, well I don’t know why they have KPIs in the first place. And when I talk about KPIs in this context, I'm specifically talking about the amount of billable appointments or hours or sessions that you need to do every week in order for the business to be able to afford your role, alright. So essentially what ends up happening for a lot of practice owners, maybe even you, is that you are essentially overpaying for underperformance and now you are stuck. And when your business then hits a bump in the road, like a slower month or an unexpected expense, you know, if you need to pay your work cover bill, you know, it comes around once a year, but it's like, ‘Oh my golly, what do I need to do?’ Then everything starts just crashing down. I've had private practice owners come to me in tears, stressed, burned out, realising that they were essentially working for free. And you know what's hard is if you were to look at those practices from the outside, as somebody that doesn't know what's happening behind the scenes, you would think they've got it all sorted, because obviously they're professional people -  they don't hang out their dirty laundry on social media, some people might do that, but not the people that I've dealt with. 

I think there's also a lot of shame attached to the fact that you tried so hard to build this business and do it well, and look at the results. I can't pay myself. I'm working all of these hours. My team isn't performing. I'm paying them so well, and they're still not meeting their KPIs. And, I feel like a failure as a business owner. And what you are realising is that you as a practice owner are working for free - or worse, you are paying your team to lose the business money.  And this is happening because you didn't make data-driven decisions. Because you didn't have a framework for making that decision. You were making emotional decisions, not business decisions, and I'm not judging you for that. I know what it feels like to be desperate as a private practice owner. Been there, done that, got the t-shirt. Okay. I've made every mistake in the book, so I'm not sharing this stuff out of judgment. Please know this. I'm sharing this to just go, you know what, if this is significant enough for Gerda Muller to be talking about it on a podcast episode, for it to have its own freaking episode, it means that this is happening often, so there is no shame in it. I want you to know that you're not alone in this. It happens way more than you think. But there is an answer, and that's the good news.

The Variables that Matter

Now, of course I'm not the only voice out there in this space. You can actually hear a lot of voices talking about this, professional voices, non-professional voices, and it's not exactly helpful when you have so many opinions. Because the thing is, where's the context, right? If  you were to jump into a Facebook group like I've spoken about earlier, a lot of people will just say, well pay the market rate. Well, what is the market rate for what role and in what context? If you follow the other strategy about looking at what other people are offering on their job ads, what does that package actually include? Does it include clinical supervision? Training days? What type of KPIs does it have? What type of culture does this person walk into? There's a lot of intangibles and tangibles that's not explained in those packages. What people sometimes put in their job ads isn't actually what happens in reality when they talk about what's in it for you in the job ad. I've spoken to enough clinicians to know of the experience that they've had. If you are asking in Facebook groups, if that's your strategy, like what do you guys think I should pay this person? Well, you're going to get 50 different opinions from people that have no idea what your actual numbers look like behind the scenes. No idea, So it's just not good enough to follow those strategies when you are making these freaking important decisions. 

Because the thing is, remuneration is not a one size fits all game. Case in point, if you've got a brick-and-mortar practice in the Sydney CBD, your overhead is going to be vastly different to an online telehealth only practice, vastly, just your freaking rent is going to be so much more every year. It's going to make a big difference to what you can and can't offer. And both of those businesses need to run a profitable business if you are a private practice. If you are a PTY limited, you need to be making a profit. So context matters. The margins matter. Your level of overheads matter. Again, case in point, if you've got a large team, you probably need more people in leadership to support that team, and a lot of times, those leadership positions don't have the time to do a lot of billable work, so you need to keep all of these factors in mind. Your model that you have also matters because your type of model is going to inform all of these other decisions that you need to make.

The Solution

You need to really have a framework for making this decision. You also don't want to, every time you make a job offer, have to revisit all of these decisions. The best way that you can do it is to have a clear framework that works for your practice. And I, as a private practice owner myself of course, I've put together a framework for myself that I use. It is basically an Excel sheet -  it's all set out, and I look at it and pop in the numbers and it pops out for me the consequences of making certain offers in numbers, so that I can make an informed decision when I'm making a remuneration offer. Now I'm not going to give you the full framework here on the podcast because firstly, it is a podcast and I'm referring to an Excel document. I also want to be respectful that this is a tool that I share with my paying clients who invest in working with me within the Private Practice Success Academy. 

What I will say is this, that you need to consider things like where's this clinician entering? Into our organisational chart. Are they a provisional? Are they a new grad? Are they a clinician level one, which is a certain number of year’s experience, or are they at level two? Are they considered a senior clinician? Are they a clinical supervisor? Are they a clinical team leader? Are they a principal psychologist? Are they senior principal psychologists? So each of those are levels on our organisational structure. You need to know the award rate for each of these, because no, we are not paying award rates that would be ridiculous, because it's just not good enough. But we need to know the award rate for each level, because that's still the rate that needs to go into your employment contract, because you need proof to show that you're actually paying above award so we need to know what that is. So you need to know what the current award rate is. And then you need to know things like what is your charge out rate? What is this person asking for? We still ask that question, to go, how far off are we from meeting this person's expectation, so that when we have that discussion, we can talk into that. What is the on-cost for this specific role? What are the KPIs, the minimums that we can get away with? What are the ideal KPIs? We look at all of that stuff. What are the contributions to OPEX? What are the profit margins? All of these things need to be popped into your framework in order for you to make an informed decision.

It's not a glamorous or sexy framework, it is an Excel spreadsheet, but it's accurate. It's strategic, and it puts you as the practice owner back into the driver's seat. Because here's what I do not want you to do anymore…..

What Not to Do

I don't want you to be paying or offering X amount of dollars just because somebody else said that that's what you should. Somebody that knows nothing about your business. And I don't want you bending over backwards anymore to please people, to take on people that haven't even proven themselves yet. Some people are really good at selling themselves. Some people come into your practice with a really great resume, but the proof is in the pudding. Remember I said earlier on, and this happens way more than you think, a lot of times people are overpaying for underperformance. These are all the risks that you take when you owe the pay. I definitely don't want you sacrificing profit for the sake of appearances, for being able to say that my practice pays the most in this area. Well, that to me is not a freaking flex. Not when you can't pay yourself. Not when you are running every year at a loss. That is not a flex. I think that is actually really inauthentic because it's not a true reflection of being a good business owner.

So my messaging for you today is really that we want to stop making decisions out of desperation, and out of fear, and you want to start to lead your business like a proper CEO of a small business. Because that's what your business needs you to be. That is what your clinicians need you to be, your admin team, your clients, the community that you are there to serve, needs you to be. Because otherwise you're not going to be around for long. That's just how it is. So I really want you to stop playing roulette when it comes to remuneration, and instead start playing a game of chess where you're thinking strategically. You are thinking 1, 2, 3, even 4 moves ahead and you're playing the long game. That is running a sustainable business.

If you've been stuck playing remuneration, roulette with your remuneration offers. If you've just been guessing, if you've been doubting, if you've been comparing, if you've been people pleasing - again, this is not a criticism, and also know that you're not the only one - this is a very common pain point for private practice owners, but you can turn things around. This is about going, okay, now I know that there's a better way. Now I know that I need to go and look at the numbers so that you can stop guessing and start leading your business with strategy. Because I can tell you this, when you make the wrong financial decisions in your business, even those clinicians who may be getting really great wages right now, they're going to leave pretty soon. Because you're going to come to a point where you're going to realise that now I need to performance manage someone, and they're going to be in complete shock in terms of ‘What the hell is going on now?  Where is this coming from all of a sudden? It's just a matter of time. This catches up to each and every one of us. 

If you are not making data-driven decisions when it comes to your remuneration office that you're giving to your team - and this goes across the board, not only clinicians, but admin as well - it will catch up to you. Maybe if you've got a sugar daddy back at home that is supporting you or you are happy to, go into your mortgage, if you're happy to dip into your savings, if you are happy to dip into your super, yep, people have done that. I don’t know how they managed it, but they managed it somehow. This is what people are doing because they're desperate. And you might be resourceful in coming up with those stop gaps of filling in the money from somewhere, I don't know where people are so resourceful. There's even people taking out huge loans to try and keep their businesses afloat. It'll catch up to you. Unless you change what it is that you're doing. And like I said, it's hard to walk these things back, but it's not impossible. I help people with this every day, and we do it in a way that doesn't break your business. But unless you change it, your business will break. It's inevitable, and I'm not being a Debbie Downer here.  This is me going, please notice this before it is too late.

Alrighty, thank you as always for going there with me. I know that sometimes these are really hard and difficult conversations, so thank you for sticking to the end as well. And thank you for tuning in, and as always, remember that I am here to help you build a practice, you can't stop smiling about.  😊

Head Shot

Gerda Muller

Host