In any industry, it costs money to make money, and one of the most important investment decisions you’ll make as a business owner is how you manage your staffing demands.
Staffing a pharmacy can cost a pretty penny, so understanding upfront labor costs is important to develop an accurate business strategy. Below is a breakdown of factors that impact staffing costs for you to keep in mind while planning a budget for your pharmacy.
Understand Your Basic Staffing Costs and Needs
A 2019 NCPA Digest report found that in 2018, independent pharmacy owners typically employed 8.1 non-owner, full-time equivalent employees per location. It also determined that hourly wages for staff pharmacists and technicians were increasing year-over-year, with staff pharmacist wages rising to $58.82, pharmacy technician wages to $15.56, and clerk cashier wages to $11.37 per hour.
Naturally, these wages will vary by local market factors, but they’re useful for building an initial budgeting framework. For example, your staffing costs will look significantly different if you have a lower ratio of staff pharmacists to pharmacy technicians compared to the reverse scenario. Take a look at the services your customers typically tend to ask for to evaluate what kind of positions you need to fill.
Anticipating the services your clients will require and how much it will cost you to employ the staff to meet those needs is a good first step in drafting an accurate budget plan. Most importantly – remember to factor in the cost of paying yourself!
Consider Your Expected Foot Traffic
It’s impossible to predict the exact ebb and flow of foot traffic that your pharmacy will experience on a daily basis, but analyzing key indicators will give you a decent estimate of your general demand.
Do you anticipate that you’ll see more patients during the week or on the weekends? Is there a particular time of day when patients may flock to your doors? If you have access, evaluate the pharmacy’s current sales volume by hour, day, and season to identify what may be your busiest windows and match employee schedules to maximize efficiency.
Once you have a grasp on how busy you expect your pharmacy to be, you can adjust staffing models accordingly to reduce spending on unnecessary wages.
If you haven’t already, you should definitely consider taking advantage of technological innovation to enhance efficiency and reduce costs.
Embrace Workflow Technology
Improved workflow technology, including automated dispensing counters and systems, telephone interactive voice response systems (“IVRs”), mobile commerce and signature captures can reduce your pharmacy staffing needs and increase revenue.
A recent report found that 89% of independent pharmacies use point-of-sale technology, so make sure you’re not leaving money on the table by relying on out-of-date procedures.
Adjust Staff Responsibilities to Improve Efficiency
Being understaffed by even one employee can completely disrupt a work day, leading to longer lines and more frustrated customers. Cross-training staff so they can perform more tasks and assume greater responsibilities (when appropriate) can be a powerful tool in increasing your efficiency and reducing your overall staff budgeting costs.
The practical reasons for cross-training are numerous. You can avoid disruptions in workflow by training your staff to perform essential functions to operate as smoothly as possible when another worker is down for the count. This is an especially smart move during flu season and COVID-19, as community pharmacists are at increased risk of getting sick and needing to take time off, which can throw a wrench in even the most well-planned pharmacy staffing schedules.
Cross-training staff can also be useful in mitigating the loss of efficiency in case a team member leaves your pharmacy for non-health related reasons. The cost of hiring a new employee is high – the average U.S. employer spends about $4,000 and 52 days to hire a new worker – and teaching them the skills of their new position takes an average total of 42.1 hours. You can use cross-training as a way to make sure that your pharmacy stays up-and-running no matter who’s clocked in.
There’s no magic formula for determining the perfect pharmacy staffing budget, but that doesn’t mean you can’t think critically about ways you can reduce overall costs. By considering all of the above factors, you can be more confident in reaching an accurate staffing budget as you begin your planning process.
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