Getting in the know about Contracting VS Employment in Private Practice

This is one for my fellow psychologists. Many of my colleagues in the profession will know that unpacking what you need to know about contracting VS employment in private practice is something I could rabbit on about for hours.

Unfortunately, too many psychologists are going into private practice roles early in their career, without sufficient information to help them make an informed choice about what is going to work best for them.

Private practice can be a fantastic way to do the work you love, however it can also be an express road to burnout. Far too many early career psychologists experience burnout in their first few years in the profession, and this is something that needs to change.

In my opinion, universities and supervisors could do a lot more to educate the next generation of psychologists about their options, including what to look for in a role and what to be wary of. This is particularly true if your university or supervisor provides suggestions about work opportunities. It is worth considering if they really know the terms of employment being offered, and if the suggestions are in your best interests (or do they perhaps, know the practice owner?). You would think, that after so many years of investing in our education, universities would be formalising the education around industry norms relating to work conditions.

Here is a list of some of the things you’ll want to consider when reviewing a contract or discussing an opportunity in private practice:

Hourly Rate. Don’t just take this number at face value. Consider what is and isn’t included: supervision, CPD, annual leave, sick leave, superannuation. Employment roles tend to have more inclusions i.e., supervision and CPD (on top of what legally needs to be included), but a lower hourly rate. On the other hand, contracting roles tend to have a higher hourly rate and can seem very enticing. However, it is so important to consider:

• What is the client paying per appointment?

• What is the percentage fee split between the psychologist and the practice?

• What are the typical cancellation rates at the practice?

• What is included for your percentage fee split? Room rental, administrative support, marketing, utilities?

• Are there KPIs? How many clients do YOU want to be seeing per day and per week?

• Can you accommodate fluctuations in your income week to week, or is this going to be too stressful?

• Do you want to be doing your own accounting, tax, and putting aside your superannuation?

• Will you be paying for your CPD and supervision?

Although contracting may appear highly lucrative, by the time you have taken into account the above questions and financial considerations, you may find you can earn a reliable, steady (and sometimes better) income in an employment role (even if the hourly rate seems SO low at first in comparison). Bear in mind, your employer will be paying all of the business costs and overheads, and has to pay you whether or not clients turn up. They are weathering a lot more risk in order to provide you a reliable income. Contracting can be a financially attractive option, but you’ll be paying a lot more out of your own pocket for costs, and you will be working pretty hard (i.e., seeing a lot of clients!) to be able to guarantee yourself a steady enough income.

So with the financial considerations out there, you might be wondering why people do choose contracting? Well, a lot of psychologists will choose contracting because of the freedom and flexibility it supposedly offers. And I put supposedly in italics, because unfortunately, there has been a long history of practice owners exploiting psychologists in contracting roles. As a contractor, you are technically running your own business. You should therefore, technically, be allowed to:

• Set your own rates

• Choose your days and hours of work

• Choose how many clients you see per day (i.e., NOT have KPIs)

• Choose which client presentations you do/don’t work with

• Choose when to take time off

• Choose if you will work at other practices as well

• Choose what CPD you’ll do

• Choose who will be your supervisor… the list goes on.

Unfortunately, in some cases there are practices that do not work in this way. At its most extreme, this is called sham contracting, and it has been a serious problem within the industry. Basically, you are employed as a contractor, i.e., you don’t have any of the benefits of being an employee (sick leave, annual leave), yet, you will be treated like an employee where your boss calls all the shots (i.e., none of the freedom and flexibility that contracting is supposed to offer!)

Sham contracting has been such a significant issue that there have been some cases where practices have been ordered to back pay superannuation to workers, because they have been deemed to be employees (rather than contractors) in practice.

In addition to the above, you might also want to consider aspects such as:

• Who will my supervisor be? If they are the practice owner, this is a dual relationship and may represent a significant conflict of interest if not well managed. For example, if you are needing to make some changes to your work arrangements for personal reasons, how will the practice owner feel and treat you, if they know this impacts their bottom line?

• If the practice pays for my CPD, will I be required to pay back the cost if I leave the practice within a certain timeframe?

• What are the restriction of trade clauses? Some practices won’t want you working within the same state for a year after your resignation. Seriously?! How are you meant to earn an income?

• Will you truly be getting to do the work you love? Or will the practice be designating the type and number of clients you see? How well does the practice fit within your areas of interest?

• How does the practice owner consider ‘ownership’ of clients? The word ownership makes me want to vomit, but its something to consider. Some practices will claim to ‘own’ clients if you decide to leave, but in reality, clients can choose who they want to see and where they will attend services. And clients tend to be pretty good at googling names. What is important to consider is if the practice owner will act ethically in the best interests of clients, and work with you if the client chooses to follow you. Or, will this be the start of WWIII?

• Who owns the file when you decide to leave the practice? What might that mean for future requests to access files, or subpoenas? What does that mean for client confidentiality regarding file access?

• If you receive a job offer, and you feel they are putting the pressure on, is accepting the role in your best interests, or theirs? Of course, you want the employer to be excited to offer you a role! But there needs to be mutuality to the decision, not a sense of pressure, coercion, or suggestions that you might ‘miss out’ on work (trust me, there are plenty of opportunities available).

• Are you adequately prepared for the challenge of working (mostly) alone in private practice? For some psychologists, it can be incredibly isolating. For others, they will thrive with the level of independence.

• Are you prepared to do the extra training and work you will need to do to get your head around private practice processes, such as Medicare training?

These are just a few of the things you might want to consider.

I’ve been pretty blunt in this blog post, but for good reason. It breaks my heart when I hear about fellow colleagues quitting and leaving the profession merely a year or two after attaining their registration because of a poor experience where they have been exploited in their work roles. We are supposed to be a profession that upholds professional ethics and does not exploit, but unfortunately it is still happening.

Let me be clear, I have never worked in an exploitative practice. I LOVED the practice I previously worked at and ethical standards were always highly upheld. The practice owner was very ethical and as an Independent Associate, I was genuinely employed in a contracting role that offered true freedom and flexibility. I specifically sought out a workplace that was ethical in this regard because I’d heard too many horror stories of exploitation and burnout, and I was forewarned enough to know what to look for and what to ask about.

I hope this blog posts helps you to be forewarned and forearmed. You have worked so hard to get this far, do not let someone take that away from you! Take your time, do your research, and go where you need to go. Ultimately, that is what we can do as individuals and as a profession in order to stop these exploitative practices.

If you'd like a confidential space to discuss an employment or contracting opportunity and if it is the right fit for you, please reach out. I am more than happy to offer some mentoring and support.

e: info@kendallallsop.com.au