A few groups help pay realtor fees; others retain a professional relocation company to help with the housing search. Some even offer low-cost home loans or other financial subsidies. Experts in physician recruitment observe that though such offers are exceptional, they expect to see more aggressive physician practices sweeten their offers with these additional benefits.
Not many years ago, only the most desperate—or particularly well-heeled—organizations offered to pay off student loans for new physician recruits. Now it’s the norm. Young residents simply expect help today.
The weak economy and tanked housing market plaguing much of the country provide plenty of challenges—but like the proverbial “rose among the thorns,” there’s an opportunity for practices looking for a new edge in the game: Housing assistance for new recruits.
Before you dismiss this idea as expensive and preposterous, consider the value brought to your practice by a new physician. In the big picture, the additional expense that helps you recruit a star performer will deliver an impressive return on investment—if you structure your deal carefully. Consider offering help like:
- Low-cost “bridge loans”—helping the recruit pay the required down payment for a home in your community;
- Underwriting home financing—working with your bank to ensure the best possible loan terms and offering to co-sign the note;
- Temporary housing—renting a house for the recruit while the recruit waits for his or her old home to sell; and
- Closing costs—paying the points, realtor fees, and other costs required at closing.
Of course, you’re wondering how you can possible associates continues to heat up, you may find it impossible to afford not offering housing assistance. You can try several tactics to minimize your risk:
If loaning money to the recruit, work with a knowledgeable attorney to create loan documents (separate from the employment contract) compliant with lending laws.
Don’t allow the loan repayment term to exceed the employment term. If making a three-year recruitment deal, set up the loan with a three-year balloon payment. Do not imply any guarantee to renew the loan.
Consider structuring part of the expenses as a forgivable loan—similar to typical hospital guarantees. You forgive a portion of the principal amount each year, so that if the recruit leaves the practice sooner than expected, he or she must repay the remaining balance.
You might be able to reduce initial salary or increase practice buy-in arrangements to compensate for the additional relocation expenses. New doctors are often more focused on the immediate challenges like securing a home and less concerned about long-term issues like attaining partnership.
A competent accountant can help you calculate a realistic return on your recruiting investment. Understanding that return can help you and your current partners get more comfortable with the idea of sweetening the offer with housing assistance.