A previous reader question:
What do you think is a fair compensation ratio for pre-partner to partner pay? It seems like a lot of jobs offer a 50 to 100 percent pay bump. Is there a threshold that should be a red flag?
I don’t think there is a red flag number.
These numbers mostly reflect supply and demand (and in some cases the impact of technical fees from center ownership after a buy-in).
Part of what will feel acceptable will depend on how long the track is. So if a group has a one-year track, you can tolerate a pretty big differential, but if they have a 5-year one, that might be unconscionable. If someone has a seven-year track, I probably wouldn’t want a big differential—that’s a long time to be paid less. (Given the number of unknowns over almost a decade, I also think it would be very hard to know if you’re working toward a healthy return on that sweaty equity over such a long period).
Part of it will also depend on how high partner pay is. If a group has truly incredible contracts or an amazing real estate portfolio, it may make sense to accept a large temporary differential to enjoy potential massive returns on that time over the long term.
So I don’t think there’s a set number for it. I think it’s more a matter, unfortunately, of the holistic view.
The reality is that if you look at private practices over the past five years, everyone has shortened their track and bumped associate pay. I think most practices, especially in competitive areas, are largely doing what they can to balance recruiting desirability and providing perks to partnership.
Especially when hiring fresh graduates, it’s also not uncommon for a practice to lose money on its new hires for a while until they get up to speed. The reality is: the practice is often investing in you upfront. Partners also take risks that associates don’t, so there have to be some benefits to being a partner.
So again to summarize: it’s all supply and demand. These are businesses, and fairness is in the eye of the beholder. Years ago, when the job market was tight, we had long tracks and big differences. We are in a different era. Tracks and pay are what they have to be to recruit, and the better the offer relative to a partner, the more desperate the need to recruit or the more challenging the competition for recruitment is. The increasingly nationwide market for teleradiologists isn’t finished having its ripple effects.
So I am entirely unwilling to say there’s a rule of thumb here. Everything is local, but even then, sometimes things are good on paper because they have to be to be competitive in the market, which might mean they’re not competitive in some other way that’s harder to measure.
There are few shortcuts to evaluating jobs, few true red flags, and no ways to entirely de-risk the big decision of where to work.