Ben Lynch: G'day good people, welcome to the Grow Your Clinic podcast by Clinic Mastery. Here's what's coming up inside of this episode. This episode will be right up your Allie if you're looking to feel more confident in handling pay conversations with your practitioners. You'll want to hear Sarah's take on how a proper HR cycle means you're never on the back foot with team pay. Plus stick around for when we discuss why your contractor therapist might actually be a sham with big risks attached.

Sara Sami: One of the first things we do is kind of step back and go, OK, well, what is your pay philosophy?

Jack O'Brien: What's your advice to clinic owners who feel inadequate?

Sara Sami: We will write scripts for people to go and have meetings.

Jack O'Brien: But I'll give you the hot tip. Our industry sucks. Don't compare yourself to the entire industry. You want to compare yourself to the best of our industry.

Sara Sami: So it's really important for clinic owners to not just look at a base salary of $100,000 and go, great, that's $100,000. No, it's more like $132,000.

Ben Lynch: Well, how do I ultimately decide what that increase is going to be, say, on an annual basis as we roll into the new financial year, if that's the timeline?

Sara Sami: If someone's still developing, I would probably say that they don't get an increase, which might sound a little bit harsh.

Ben Lynch: Before we dive in, today's episode is brought to you by AllieClinics.com. If you're the kind of clinic owner who loves to feel organized and stay ahead of the chaos, you'll love Allie. Think of it as your digital clone. It's the single source of truth for all your clinic's policies, systems, and training. Test it for free at AllieClinics.com. In other news, applications are now open to work with us one-on-one at Clinic Mastery. If you want support to grow your clinic and bring your vision to life, just email hello@clinicmastery.com with the subject line podcast, and we'll line up a time to chat. Let's get into the episode. All right. It is episode 370. My name is Ben Lynch. Good to be back with you. I'm again joined by Jack O'Brien, Jacobrin J.O.B., all the things you're known as, J.O.B. What are you reading today? What's on the list? Are you listening? Are you still reading your war books? What's going on?

Jack O'Brien: Well, we've been talking a lot about Stephen Pressfield. He's come up a few times. So, Stephen Pressfield is in play and I bought a new book this morning on Amazon called Lead the Way, Authentic Leadership for the Next Generation by Jen Zetter. So, take some inspiration from the young folk. So, we'll see how that goes. It's always something to learn.

Ben Lynch: A Gen Z-er writing a leadership book. Are they even out of high school? What's the next one? Gen Alpha. Gen Alpha. Okay. I'm lost. And we are also joined today by Sarah from the People Plugin, our go-to for HR. I'm going to talk about some really interesting stuff around pay and whatnot today. Sarah, anything that you're reading at the moment, whether it's work-related, maybe it's baby-related at the moment. I'm sure you're flicking through a bunch of those books. Yeah, what's on the desk in terms of reading or listening to it?

Sara Sami: Yeah, apart from the baby Panadol instruction manual, I'm reading a book about Charlie Munger, actually. And he's like early life and like philosophies and just ways of thinking. So it's a very long book, but very interesting so far. Just learning about his early life. Is it The Almanac?

Ben Lynch: Almanac of Charmmonger, is that what it's called?

Sara Sami: Yes, it is that book. Have you read it?

Ben Lynch: No, I've seen it publicized a lot. It sounds amazing. I love watching clips of him. He just seems so wise and just simplifies things. Obviously lives an incredible life.

Jack O'Brien: Nice. Don't you find it, I'm amazing, ironic, whatever, that on children's Panadol, there's like a range, you know, three to five mils. Who's given the three mils? Let's be serious. Like what's the maximum dose we can give these kids, right?

Sara Sami: A hundred percent. And because you know that they're going to spit at least half of it out as well. So I'm almost a little bit like, hmm.

Jack O'Brien: There's got to be a margin for dribble. That's right.

Ben Lynch: Margins for Dribble. Sounds a lot like this podcast. Anyway, no, there's plenty of value here. Our regular listeners tell us about it. By the way, if you haven't given us a review, please head to your listening app and give us a review. We love hearing the feedback that comes through. J.O.B, before we get into sham contracts, how to pay your team, how to have the tricky conversations, how to have a process to know how to change pay over time. I'm going to unpack all those things. J.O.B., a couple of announcements.

Jack O'Brien: Yeah, it's all about in-person events. In a world of AI and tech and fuel shortages, we are doubling down, tripling down on the in-person nature of Clinic Mastery. So in a couple of days' time, I'll be in Sydney for a member meetup and an intensive with Sydney locals. We're coming to the Sunshine Coast in July. We're coming to Perth in August. And we are just about to release tickets to the 2027 Grow Your Clinic Summit in Adelaide at the National Wine Centre in March 2027, members only. However, If you are not a member and you're listening and you want to join us, we're going to reserve a small parcel, a little handful of tickets for you. You can email me, jack@clinicmastery.com if you are not yet a CM member, jack@clinicmastery.com. I can get you the details. Members, check your Slack, check your inbox in the coming days because you're about to get the link to that and it will sell out. It's a smaller venue, a little bit more intimate at the Wine Center in Adelaide. Get your ticket before they're all gone. No AI in this inbox. I forgot the big one, the big one in Texas. We're coming to the States. We're coming to Texas, Tennessee, Colorado. If you're in America in November, send me an email, jack@clinicmastery.com. I will personally come and visit your clinic. But you got to get in touch.

Ben Lynch: So let's do it. The road show. Very nice. So Sarah, let's talk about something that evokes a lot of stress for a lot of clinic owners and that is around pay. Typically, they get the conversation initiated by a team member saying, I want to pay rise. They're on the back foot. Then they're wondering, how do I navigate this? But I want to zoom out and get your lens on remuneration structures, how people ought to think about it, have a process for it so that they feel more in control, they get a more consistent process for this. find out where they go wrong with it, especially on the sham contract side. You've talked a lot about that with us. So I want to make sure that clinic owners leave this conversation having more clarity and confidence about what they can do around pay, pay progressions, and ultimately make sure they get in touch with you and the fantastic team at the People plug-in to support them through this. So where do you want to start in terms of setting the scene for pay?

Sara Sami: All right. I think maybe I'll just do a quick context of what we've seen so far, and then we can kind of unpack that. So what we're seeing at the moment is clinic owners will come to us and, um, maybe they want to do performance reviews or one of their team members has a reactively asked for a pay increase and it's opened up this conversation. So the first thing we say is, okay, cool. Let's have a look at what's going on in terms of pay structure. What's your philosophy on remuneration? And we're basically getting either verbally or maybe a spreadsheet that is like a bowl of spaghetti that is just like, Team members paid very differently. You know, maybe someone has, you know, started six months ago. That's fine. The prior person started two years ago. They've never had a pay increase. It's very kind of ad hoc and sporadic. So, one of the first things we do is kind of step back and go, okay, well, what is your pay philosophy? Because maybe your philosophy is you just want to be paying award or just above award. And you don't want to be promoting your clinic as, hey, we pay really, really high salaries. And like that's okay if that's what you want, right? Or the other end of the spectrum is like, no, actually our philosophy is we want to have really high fixed salaries or, you know, medium fixed salaries. We want to have really high bonus structures and we want everyone in the market to know, hey, if you come to our clinic, excuse me, we expect high performance, but we pay you really, really well. And maybe that's your strategy. So first of all I think clinic owners need to understand where on that spectrum they sit and then we can help kind of break it down and look at how to actually get there.

Jack O'Brien: It's a really good point. It's something that Mic Rizk touched on a couple of episodes ago, and he runs an admin-less clinic. And it's like his team members, he'll publicly say his team members can earn 120, 140 grand a year, which is on the high end for physios. That's because they've decided to go with an admin-less clinic. There's a high expectation on therapists, but that's why they can earn more. So I love that, Sarah, that as the clinic owner, we need to be really clear on what's the style or MO of our practice.

Sara Sami: Yeah, exactly. And then, as you said, there can be like that fixed salary component, and then there's the variable component, which is the commissions that people can earn on top. So then even understanding what is that mix. And then I think once a clinic owner has that as their foundation, then it's about looking at how do we align the current employees to actually achieve that strategy. And then once we've got that baseline, then it's a bit more of a maintenance. But in the first instance, there generally is a lot of work to realign those salaries and put that in place. And what we always recommend is doing annual remuneration reviews. And I always say around June, July, get that financial year, get that budgeting done. So you're kicking off the financial year with a nice, clean, fresh salaries and you understand, you know, for the next 12 months what your like S&W commitment is.

Ben Lynch: SMW is salaries and wages. Yeah, salaries and wages. These roll off the tongue for you. For a lot of folks listening in, they'll wonder what we're going on here about. But an interesting thing that you just touched on there, Sarah, was around budgeting. And we notice a lot of clinic owners do not have a budget. So even to your point there as part of the process, and this is what we're so often helping clinic owners do, is like first, in a similar way, understand your numbers, get up to speed with what is current and what has been, and then let's look at projecting into the future. what you're suggesting here is it is important for clinic owners to set sustainable pay models. They've actually got a clinic overall budget set up, which I think is so important because we see a lot of clinic owners stressed, frustrated, annoyed maybe at themselves for having set up these structures that are unsustainable and they're kind of like, oh, this is very hard to unwind. And so I think there's some really great advice there from you around the importance again of budgeting and having a financial year budget. Okay, and you mentioned the salaries and wages component. Are there any principles, philosophies, practices at a headline level that you would advise clinic owners to think about when it comes to budgeting for salaries and wages?

Sara Sami: Yeah, definitely. So, looking at Salaries and wages, obviously, you've got the fixed component of a salary, but then there are all the on costs that people need to take into account. So, obviously, there's the superannuation piece, there is generally payroll tax, there is return to work. levy funds as well. So, it's really important for clinic owners to not just look at a base salary of $100,000 and go, great, that's $100,000. No, it's more like $132,000. That's the true cost. And I think mapping that out, I think we've talked before about your salaries and wages as a percentage of revenue. and actually having a look at what is that, what is that trend and how does that compare industry standard because that will give you a really good understanding of how efficient your clinic is being and also really like ultimately how well those people are performing in those roles. And then there's another way we can kind of break it down to look at the annual increase and what those should actually be.

Ben Lynch: Ooh, keen to get to that.

Sara Sami: Yeah.

Ben Lynch: Just a quick one in terms of some of those inclusions and on costs. Do you consider things like a learning and development budget associate line item associated with that and say like equipment, like laptops and desks and you know, all the bits that maybe someone needs to do. Would you consider that in, in there when you say on costs or do you kind of view that separately?

Sara Sami: Yeah, I think there's a different line on the P&L for it, but I think definitely when you're looking at it overall, you should absolutely take that into account because what is the true cost of hiring someone or having someone on your books, really? Because 100% it's even from the ergonomic chair that you're having to purchase, the desk, the space, all of that counts because it is a cost ultimately to your business for having that employee and it's that return on investment. So I guess you're looking at the whole investment piece and then going, okay, what am I actually generating as a return from that investment?

Ben Lynch: So I really want to get to how much we increase it by. And I know a lot of listeners do too, because it's like, all right, okay, the pay conversation has been prompted. What should I increase it by? But before we get to that, is there anything else that we need to set the scene? You've told us some of the challenges that you see are that this conversation comes to the clinic owner and they need to consider their philosophy around, is it a ward? fixed salary? Are they rewarding high performance? The results that they get, are they paying well above? How are they thinking about that? And then how do they align? We want to come back to the alignment because that can be a tricky one. Interested also, Jack, in how you've seen that play out. But is there anything else that we need to clarify before we get to the point, Sarah? How much do I actually increase this by?

Sara Sami: Um, I think, I mean, I guess the other part is really the cultural piece and the expectation setting, um, for employees and for leaders. So I think generally there's not, there's not really like remuneration issues or people issues. It's actually like a communication and an expectation and a system issue. And so I think designing all of these systems and communicating them transparently just takes away a lot of the noise. I think that the other part is really. the, the how you go about it and then change management. Um, and then the other part is like the mechanics of it, I guess.

Ben Lynch: Yes.

Sara Sami: Yeah.

Ben Lynch: Do you mean like, okay, this is the rationale as to why you're getting an increase or not, or by how much, is that what you mean when you say, so the communication?

Sara Sami: Yeah, definitely. So I think communicating like the why and the how much and the fact that, you know, we look at performance, we look at what is the industry doing, what is kind of CPI doing, what is the macroeconomics like the clinic health, but also definitely the performance of that employee and just having that as a transparent expectation. But then this is where it gets into that kind of bowl of spaghetti because then you go, okay, well, what are the KPIs you have for a clinician, like a physio, for example? Okay, great. Those ones are relatively clear. Okay, great. Is that clinician aware of those KPIs? Oh, yeah. Okay. Well, that doesn't fill me with confidence when you say it like a question. And then do they have access to these KPIs? Yeah. And I think that's the way Allie does a really good job because people do have access and they can get that real-time data, which is great, but for a lot of clinic owners that don't have that software or they don't have other ways, it does become a little bit gray of like how well are you actually communicating in these KPIs and how well can that employee actually see how they're going towards that target. So that's what I mean about that change management piece. I think if you're going to tell someone, hey, your performance directly links into your remuneration review, I think you need to be able to back it up and actually help them understand what that link is very clearly. And I think that's where a lot of people also struggle with this.

Jack O'Brien: It's such a key, Sarah. And listeners will know this, or if you don't, remuneration conversations are some of the most sensitive conversations we can have. You're literally talking about someone's livelihood, ability to put food on the table and a roof over their children's head. And so, yes, some of these things can seem like numbers in a spreadsheet and it's all mechanical and profit and loss. But ultimately, it comes down to how well we're able to lead and communicate and relate. And it's the way we go about these things more than just the mechanics of the things. Ultimately, that's what sets apart clinics that are thriving, where there's healthy relationships for people who are inspired to come to work. They feel safe and confident and they leave fulfilled. I think I quoted Simon Sinek or at least paraphrased him well there. That's the key. This is a leadership skill conversation. The good news is that leadership skills are skills that are learnable and teachable. Every clinic owner wants to be getting better at these skills and in the right coaching environments to get better.

Sara Sami: Absolutely. Spot on. And that's why it comes all the way back to, well, what is your philosophy? Because if you don't, if you don't understand what that is, how can you develop that skill, as you said, to really nail those conversations and help people through them and be transparent? Because you don't even really understand what, what, what you're trying to get at. So I think it's, it's really key. Yeah. Good point.

Ben Lynch: Jack, you've coached probably thousands of clinics now. Just help us understand a little bit more of the side of the conversation that you're having with clinic owners when they come to you and say, you know, I really want to help this team member progress or we may be changing models or they're progressing here. Have you supported that clinic owner through those conversations and workshopped with them, understanding their philosophy, helping them understand perhaps some of the options that are available to them. Take us behind the curtain as to how you've helped them.

Jack O'Brien: Yeah, if you're a leader who wants to have productive, healthy, cultural conversations with your team, so much of that hinges on, and this might sound counterproductive to what I just said a second ago, but so much of it hinges on having certainty and clarity over the numbers and the dollars and the cents. It's really hard to have a kind, compassionate, clear conversation if you don't have clarity behind the scenes. So, increasing your confidence in your numbers as a leader means that you can then lead with confidence. You know, clinic owners, if we think about Kim Scott's quadrant system of radical candour and caring personally and challenging directly, clinic owners classically will have a high care factor but find it challenging to confront directly and they end up in that ruinous empathy quadrant. And we feel for our team and we end up being held over a barrel or unable to have some of those more robust conflict type conversations. And so we want to be able to care personally and challenge directly as Kim would put it. And so when I see, when I'm speaking with clinic owners and you're having coached thousands of them now, I see clinic owners who are trying to balance this tension of caring about their team, wanting to have a profitable and sustainable business, and also wanting to do things the right way. We all want to stay out of jail and do things to a best practice standard, and that's where having the best advice in your corner makes ultimately the world of difference.

Ben Lynch: I wonder how much of that, um, the care element and the inability maybe to have some of those conversations is actually a lack of process and clarity around their philosophy and a structure that then backs it up as well, because every conversation is almost isolated and different and they don't actually have a model for it, a mental model or literally a model for how they determine this. And so. there's that avoidance or it becomes challenging because they have nothing actually to come back to. And so, maybe consciously, subconsciously, to your point, Sarah, it's like, oh, I've got some setup for this new team member that's different from the old team member and I don't know how I'm going to have that conversation. So, I see so much of this coming back to and some of the most successful business owners really being good systems thinkers. And to your point, J.B., of course, it's got to be layered on the human element, the ability to have those conversations. And they are tricky, but it's trickier if there isn't this base to come back to. And I think that's what you're so championing here, Sarah. So there's a couple of bits here that I want to get to. You mentioned reviews. And that strikes me as kind of the conversation, the anchor in the diary to speak with the team member about, okay, their progression in their pay. Are there any criteria, certain things that happen in that conversation or that have to happen prior to that conversation to allow it to be most effective in this whole kind of performance management cycle?

Sara Sami: Ultimately, they need to understand what their performance objectives are.

Ben Lynch: And so that- The clinic owner or the team member of both?

Sara Sami: Well, I think both actually, both. Definitely the clinic owner, hopefully, but the employee as well absolutely needs to understand what are the expectations. And that's another, I think, layer of the spaghetti bowl, because again, people can avoid more difficult conversations. and not necessarily want to actually communicate throughout the year or in real time that maybe some of those expectations aren't being met to the degree that the clinic owner would like. But I think performance against like role expectations, like understanding that, understanding KPIs, understanding as well the like behaviours and attitudes piece. So like if we go back to the OOBA which I've spoken about before, the outcomes and the outputs, they need to, both parties need to understand what are the expectations there, and then that behaviours and attitudes piece, again, both parties need to understand what the actual expectations are in the behaviours and attitudes piece as well. And that is not just a quick, simple conversation, that's something that you reinforce over time and time and time and it becomes more clear with every conversation that you have and I guess how embedded that becomes in the clinic and from even, you know, onboarding to the performance review, like how actually embedded are those conversations and those expectations. So, it's really hard, I think, to have these performance conversations and remuneration conversations when that pre-work has not been done. It's not impossible, and I think you should still have them because you need to start somewhere, but without all of that work that's, you know, done up front, it's really hard. I agree.

Jack O'Brien: And it's not just that it's done, that it's kept on being done, you know. So often we speak to clinic owners who are like, I've done the culture day. It's like, no. We do culture days, plurally, over time. We reinforce and redevelop and redefine what our culture is, and that's what leads to specific behaviours, attitudes, and having those documented, right?

Sara Sami: Yeah, absolutely. And really, it's funny you say that, Jack, because I literally spoke to a clinic owner last week about some performance concerns. I was like, okay, well, when did you speak to them about them? Oh, like October last year? I'm like, okay, well, that was a really long time ago. Like, I can't remember what people said to me in October. So have you spoken to them again? No, but I told them. Well, No, you need to tell them again and again and you need to follow up and you need to reinforce. Otherwise, it's kind of, you know, a job very half done.

Ben Lynch: Even if, I mean, Jack, that's kind of what you're saying about the repetition, right? And we so often talk to those one-on-ones, the mentoring sessions that are in the diary routinely with practitioners and to some degree admin and how they're supported as the opportunity to have these conversations and revisit them. I think so often that actually takes a lot of the stress out of it. If there's a long bit of time and space between conversations, it feels like I don't know, the anticipation is really high, the stakes are really high and actually just having more frequent connections and conversations I feel diffuses a lot of it because it's a little bit lighter and easier. Okay, I really want to get to the how much to increase part of this, at least how clinic owners want to think about it, because this is what they ask us and I just want you to nuance. Okay, there's all these things that need to happen before we get to this point and hopefully that's heard. But every clinic owner always asks, yeah, but what should I pay them? Like, I just need to know, I need to go back to this team member because I promised them next Tuesday we're having a meeting and they need an answer. And we're often like, let's hold our horses here and see if we can buy us some time. But this is the question that always comes through. So how do you answer it, Sarah? How do you help a clinic owner understand or how do I ultimately decide what that increase is going to be say on an annual basis as we roll into the new financial year if that's the timeline that they pick.

Sara Sami: Yeah, sure. Can we add a financial disclaimer here? This is not financial advice. So my advice is to look at everyone as one. So like literally get everyone on a spreadsheet, all of their salaries, when were they last increased, all that basic data. Like when did they start? When was their last salary increase? What are they paid? What is their L&D budget? Are there any bonuses? Are there any commissions? So you've got all of that information on one. And then what I would do is I assume that everyone's paying more than the award. Let's just kind of pop that and go, yep, they are cool. There's a couple of different layers, right? So looking at performance reviews specifically. When you go through the performance conversations and you have ratings, I always recommend a three-point rating system. And so let's just say the first rating is that they're not there yet or they're still developing, right? And so if someone's still developing, I would probably say that they don't get an increase, which might sound a little bit harsh, or they're only getting maybe a CPI increase or just a limited increase, because essentially they're not performing in their role. So the aim is to help them improve their performance and get up to the next performance rating, right? So this is just one layer. Then the second category would be they're essentially meeting expectations, which is great. They're performing their role pretty consistently. This is a good thing. Most people will probably be in this category. So in here, I would say you want to be paying at least CPI and then you would be looking at the industry standard. What else is kind of happening? What is the affordability and the sustainability? like increase that your clinic can afford and maybe add a couple of percent, right? And then you would be looking at the next layer of like really strong contributors. And you would probably say there wouldn't be many people in that band. It's normally a bit of a bell curve in terms of not performing, meeting expectations, and then really, you know, high performing. And that might be CPI plus say three or 4% of base salary. So that's one layer. Then you kind of zoom out and you would look at what that actually looks like. And you'd go, well, can we afford it? How does that compare to industry standards? So what are other clinics paying? What is our philosophy? If that all comes out really, really low and we've just said, oh, actually, we want to be paying really high, well, does that work? Like, does that fit? And then I would look at, are there actually adjustments you need to do internally? So you might have Had one person start when for some reason you were paying really high, someone else started when you were paying really low, does that make sense? And you would zoom out and go, oh, actually, no, we need to equalize these two people a little bit, so let's pull this one up or not increase that one as much and put this one up. Just normalize internally. So when you zoom out, you should actually go, okay, that makes sense. These people are performing the highest and their salary increases are a bit higher or they are now paid a bit higher. These people are mid, these people are lower. It kind of makes sense, but you have to overlay that with what is your budget? What can you afford? What is the industry doing as well? And the CPI the last quarter, like for the Australian CPI year on year, so this is an obviously end of financial year, so we don't have that data yet, is 4.6%.

Jack O'Brien: So, question on that, Sarah. I know this is a blind question, but to what degree do you encourage clinics to think about CPI on more of a granular basis? We know that, say for instance, fuel prices have impacted CPI quite significantly. Do we talk about CPI on an industry or sector by sector basis or not? We just roll with 4.5?

Sara Sami: No, I think it is good to definitely nuance it. Absolutely. And because you see some crazy things with CPI, like when we went into COVID times, CPI was a negative, right? And so we're not going to go, sorry, please, we are taking 1.5% from you. So I think there's that like sense checking and that sanity check on it because I think 4.6%, I'm like, oh, that's quite high. Like I saw your eyes widen for a second when I said that figure. So, yeah, it's definitely a bit of a case-by-case but I think that is a number to kind of base on and then you want to… Yeah.

Jack O'Brien: It's a really important distinction for clinic owners to pay attention to that we don't just do these things because that's what the ATO says is supposed to happen. Now, we filter this in light of the upcoming changes to the Health Professional Support Services Award, which we're not going to touch on specifically today. We've got a workshop planned, a live workshop webinar in July to unpack all of that, so stay tuned for registration for that, listeners. But the headline to that is the award is going to move by more than CPI substantially. Now, for most of us who are paying above award, the award may not come up to where we are currently paying, but if we're thinking about our remuneration structure relative to the award, then we might need to consider how things move. So the point is that we take all these things into consideration. You know, you mentioned industry specifics as well. You can benchmark yourself against our industry broadly, but I'll give you the hot tip. Our industry sucks. So don't compare yourself to the entire industry. You want to compare yourself to the best of our industry. What are the elite clinics doing? What are the sustainable clinics? Because the reality is 90% of small businesses fold after five years. So I'm not interested in comparing myself to a clinic that's about to fold. I want to compare myself to a clinic who is sustainable, profitable, and has an amazing team culture. Where do you find those clinics? Again, another hot tip for players at home, inside Clinic Mastery. And we've got all that data in Allie. But compare yourself against the right comparison.

Ben Lynch: Compare the market. There's a lot going on. As a clinic owner that's super busy and feels a little bit out of their depth in this area, I'm like, I'm open ears. I'm keen to make changes. There's a lot here. There's a lot to work on. How do I navigate? Like, what are some of the steps that I should take? I think part of it, Jack, you're obviously referencing is getting the right advisors in your corner to help. You accelerate the process and minimize the cost of mistakes because they can be quite costly. But Sara, for these clinic owners that are coming to you with the spaghetti bowl mess, do you find yourself often starting somewhere specifically, you obviously referenced the philosophy element to it. Are there any other key areas that you find yourself typically advising clinic owners in this state where they're like, it's all a bit of a mess, I need your help?

Sara Sami: Yeah, I always like to peel it right back and go, let's start at performance coaching. So your performance review cycle, let's get that right. Cause that is the foundation. And then we can kind of maybe put a bandaid on some remuneration issues right now, but let's start here. Let's really get solid here. The remuneration piece flows from that, but let's start here and get that really tight. So, that's where I like to start, but because we are coming up to end of financial year, there are a lot of rent. So, my advice is getting early so we can sort out and work with you on the foundational performance coaching.

Jack O'Brien: I really like that. Often, we don't tackle some of the big things in the first conversation. You've got to have a gentler first conversation now so that we can have maybe a more substantial conversation at the second or third or fourth. If we want to talk about some remuneration adjustments in July or August, then you've got a couple of days left in May. Maybe it's worth scheduling something in May or June now to, I'll say, break the ice in a lot of ways. Try not to use poor analogies. But let's say break the ice and get the first one out of the way. Get the first date done, rather. Maybe that's a good analogy. So that the subsequent conversations flow more naturally.

Sara Sami: Yeah, absolutely. I always talk about the first pancake because it's, it's always the worst. It's never the nicest and like, just do the first pancake. It'll get better from there. And, um, and you can acknowledge that, Hey, this is the first pancake. This might be a bit clunky for both of us. Like we're all human. I think people respect that and they resonate with it. Um, and the conversations can flow a lot more nicely when you're just being a human upfront.

Jack O'Brien: Okay, that's a good one. I'm going to ask you, what's your advice to clinic owners who don't feel like they know? They're going into these meetings and conversations still a little bit unsure. Yeah, we talk about clarity and as much as we can, but ultimately we're all fumbling our way towards eternity, right? And so what's your advice to clinic owners who feel inadequate or feel uncertain or lack confidence? They don't know what they're doing. What's your advice to those ones?

Sara Sami: I think two things. A, come and talk to us. We'll help you. But if you don't want to do that or you want to go down another avenue first, as you said before, Jack, it's the reps, right? And so how do you get good at something? You practice. So you need to, I'm a big believer in documenting. So for a lot of clinic owners and a lot of other clients, we will write scripts for people to go and have meetings. We will say, these are your talking notes. Um, and so you can do that for yourself and there's nothing wrong with that. I think it's, I highly encourage it. Um, and I've been in many meetings with employees and leaders and they have referred to their notes and I've never seen an employee go, Oh, that's a bit weird. Or why are you referring to notes? I mean, again, they're like, Oh, that's fair enough. You're prepared for this conversation. You've spent time actually working out and being really thoughtful about what you want to talk about. So I think people almost prefer it because they can see how seriously you're taking it. So just prepare. Do the reps, prepare because it is a skill that you need to build.

Jack O'Brien: So that's a really good way of synthesizing both of those perspectives. And I'm thinking about the clinic owner who hasn't done this before. And so what their role then is to synthesize, be prepared, have the scripts, do your research and diligence. Not or. And when you go into the conversation, say to your team members, hey, this is the first time. This is the first pancake. I'm still kind of figuring this out. I've done my best to figure it out, but we're going to figure this out together. Let's go on this journey. I'm not speaking at you. I'm sitting alongside you as we both journey on towards what excites us, the vision, the mission, the culture of our clinic. We're doing this together, and I've done my diligence.

Sara Sami: Exactly.

Ben Lynch: And I'll add to that as well. I think selfishly, a lot of team members are thinking, what's in it for me? Um, I find some of that positioning really useful when it's like, I want to help you grow and develop here. I don't want to provide you with great opportunities or pathways and progressions. And so this is part of being able to do that in a really clear way for you. So, um, I think if you can always nuance it to the team member, they're like, oh, okay, well. I'm happy to be part of this. Let's get to sham contracts. Cause Sara, you were like, we got to talk about this. I'm seeing a lot of it. So what's happening.

Sara Sami: I don't know. Can you guys tell me what is happening in your industry?

Jack O'Brien: Yeah, well, I'll have a go at giving you the cliff notes. There'll be clinic owners listening along who felt like they were proverbially over a barrel and have to provide whatever the team member requests. And so, they think, oh, a team member requested a percentage split and they asked to be a subcontractor. So, if they want to be a subcontractor, then maybe I should do that. Or there'll be other clinic owners who think this is what happens and specifically, this is classically what happens in psychology or osteo. Osteo is the other one. Sorry, I was going to say speech, but no. Osteos and psychs are notorious. This is how it's always been done and so that's the expectation, so I just kind of have to roll with it. And if we both agree, then surely that's enough. So, Sarah, if we just both want to be contractors, is that enough?

Sara Sami: There's a big test. No, it's not that simple. There is a big test that the ATO provide, which is a lovely test. It's a lovely table that basically says contractor versus employee, and you can go line by line for the table. I often pull that table up in meetings with clinic owners. Because one of the key things in that table that I often see people go, is when you get to the line and it says, okay, so if this subcontractor or contractor, sorry, can take the client and put them on their own books and then grow their business using that client, is that okay? And normally the clinic owner I'm talking to goes, oh no, they're my client. Well, then they're an employee because the nature of being a contractor is that they are doing activities to grow their own business. So that's a really key fundamental difference. But sorry, zooming back out, I think a lot of the clinic owners I've spoken to, I think they might be confused over what a contractor is in terms of the employment relationship. So I've had a few people say, oh, no, no, but they're not full time. So they're a contractor. So, completely different things. So, just to break it down for listeners. So, you can have a full-time employee, you can have a part-time employee, you can have a casual employee, you can have a fixed-term employee. They're all employees. A contractor can be, they could be doing full-time hours, they could be doing less hours. It doesn't really matter the hours that they're working. Meaning that basically, as an employer, you do not have control over them. You can't tell a contractor that they have to wear your uniform, that they have to use your tools, that they can't take your clients and put them on their own books. All of those kind of things. That is the difference between an employee and a contractor. So, if you have someone you want to employ or you need someone but you don't need them full-time, you can just make them part-time or maybe they are actually casual. I think that's a really big thing for people to consider. Yeah, that's the beautiful table right there.

Ben Lynch: Just sharing on screen for listeners, for our Australian listeners, we're on the Australian Taxation Office website, the ato.gov.au. And there's a table here called employee and independent contractor indicium and traits.

Sara Sami: So that's that one, fourth row there is the one I'm talking about where it says there is a clause in the contract allowing the worker the right to delegate or subcontract their work to others. So that is a contractor can take your client and then contract it out to someone else and that's perfectly okay. There's nothing wrong with that. And most clinic owners would say, no, no, no, they have to do the work. Well, sorry, they don't.

Ben Lynch: And it sounds like, you know, in recent times, there's been some real auditing of this going on, increased auditing of this. Is that what you're hearing and seeing? Because, you know, I think clinicianism may be a little bit blase about the need to maybe sharpen up on these things. And the last thing you want to do is maybe be on the back foot having to deal with managing this. So yeah, sorry, give us a sense for cleaning this up and the timeliness of it.

Sara Sami: Yeah, so there was an article that I've shared on the Clinic Mastery Slack channel recently, in March, where the ATO has basically, or the Ombudsman and the ATO combined, so the Fair Work Ombudsman and ATO combined, have done some auditing. So they are absolutely ramping up their focus on sham contracting, and they've done a publication saying that. So they are absolutely looking for this and in terms of penalties, so just to be clear, under the Fair Work Act, courts can impose penalties against businesses or individuals for sham contracting and the maximum penalties for each contravention is $20,000 for individuals and $100,000 for businesses with less than 15 employees. If you have more than 15 employees, it's half a million dollars.

Ben Lynch: That's some incentive to get your house in order.

Sara Sami: Yeah, that's absolute max, right? But still, why would you want to risk it?

Ben Lynch: Yes.

Sara Sami: For what? I wouldn't. Absolutely, I would not.

Ben Lynch: Those clinic owners that are going, hold up, that's me. Oh dear. Okay. Maybe only the paranoid survive, but what should they do? They're like, okay, I'm happy to deal with it. Or maybe they're not sure. They're like, there's a lot of change management here, all those conversations with those team members. Is it a conversation with you, Sarah, to do an audit, to understand what's going on? What should they practically do if they're on their commute right now, tuning in, going, that's me. All right, I need to make a change.

Sara Sami: What now? Just come and talk to us. We can help you with employment contracts to shift the contractor to an employee. And again, maybe that is casual. Maybe it's part-time. It doesn't have to be a full-time, full-time nature. But I think, as you said, Ben, like the change management piece is probably the most important about that because the person doing the contracting, like from a financial perspective, sorry, it might be quite a change for them. So we need to understand what would the impacts be for them financially and personally, maybe flexibility might be different. So I think a conversation so we can unpack the different scenarios and then before we communicate anything to anyone, really understand, well, what is our position and get strong on that. Because I think once you have these conversations, you can't wind back. So you can't really go, oh, Ben, so you've been subcontracting, I'm going to change you to an employee and then all of a sudden you have an emotional response and then I go, oh, okay, don't worry about it as you work. Terrible. We just want to get a position and then stick with it and do the right thing for them and for the business as well because you don't want either parties at risk.

Jack O'Brien: It's a good point, Sara. As a clinic owner, you want to do your due diligence and often, not always, but often team members can come out no worse off. Yeah, there might be some trade-offs with flexibility here or is it based on revenue generated or hours worked? But ultimately, at the end of the day, the dollars in the bank account come out pretty similarly, just how it's structured and it's important to protect you as a business. It protects your team members as well and gives them some certainty. There's a lot of other non-financial benefits to this as well. It makes it far easier for your teams to get into the housing market and borrow when they're an employee. Now, we talk about cost of living and house prices and all these things. Well, here's a really practical way that may likely cost you no more dollars as a business but substantially increases the opportunities for your younger team members or older to get into the housing market. I just want to highlight also for listeners, Sarah mentioned her contributions. Our members inside our private Slack community have direct access to the people plug-in, Sarah, Jess, and the team. So for members, you have that inside your Slack and if you're listening on, you think, oh, geez, I'd love to have HR support on call. Part of that is a part of your membership at CM. Yes.

Ben Lynch: Hashtag experts-hr. I think that's the channel there to access for members tuning in in the Business Academy. Well, we've covered a lot of areas. Is there anything that we've missed, Sarah? I mean, we could probably talk for days about remuneration, performance cycles. In terms of addressing the key pain point, perhaps the very timely pain point clinic owners are about to face with team members saying, I want to pay rise or I'm looking at the new financial year and maybe clinic owners going, I'm not sure it's so sustainable how much I'm paying this person and it's time for a change. Is there anything that we need to cover to put a bow on this episode?

Sara Sami: Oh, I would just say that I think people problems are really just people problems. They're usually leadership, clarity and system problems. That's how you need to think about things.

Ben Lynch: Interesting. Coming back to the philosophy, the principles, defining your version of success slash the type of business that you want to run is beautiful. That's why we align so much in terms of the values that there are many different ways to approach how you want to run your business. There are still some standards and industry best practices, as you called out, J.O.B., that being very intentional about the type of clinic you want to grow. J.O.B., any final words before we put a wrap?

Jack O'Brien: Yeah, clinic owners, your people are the only way for your business to generate revenue. Your people are what generate revenue and your people are more than 50% of your expenses. And so it is absolutely worth having a people plug-in or the people plug-in in your corner given the dependency on people for revenue, the cost or the investment of your people, and your job as a leader is to lead people. And so there's only upside to investing in good HR support and investing in your personal leadership development.

Ben Lynch: Great having you, Sarah, on the pod. Great having you inside Slack, you, Jess, and the extended team. Thank you so much for your insights. I'm looking forward to that workshop that we've got coming up very soon, talking about a number of key changes. But for folks tuning in to this point, head over to clinicmastery.com/podcast for the show notes and check out our previous episodes that we've done with Sarah as well that relate to some of the other parts that we discussed today around performance cycles and supporting your team there as well. All right, we'll catch you on another episode very soon. Bye-bye.