Closing the Compensation Gap

Businesses are constantly on the lookout for economies of scale, which is why mergers and acquisitions are routine events. Getting bigger, merging home offices, cutting administrative overhead all are supposed to pay off, at least for owners, in higher margins and a better bottom line. Sometimes they actually do. Sometimes the results are painfully disappointing.

But what does bigness do for employees? The old conventional wisdom held that working for a large company was the route to a more rewarding career track, job security and the best benefits.

Small firms could treat you just like family, but they tended to fall short with health plans and other valuable aspects of compensation. And if they sold out to one of the giants, you could end up starting all over in the back of the line for promotions.

But small firms keep starting up in HME and seem to do quite well amid the big corporate chains. Depending on the talents of their owners or CEOs (often, of course, the same person wears both hats), they can be as tech-savvy and as skilled at sales and customer service as any local office of a regional or national chain.

Also, as health care management consultant Vince Crew, Reach Development Services, notes, they may actually offer more security than large corporations. “Someone working in a large company is more vulnerable in terms of their career than someone working in a small company,” Crew says, because big firms tend to react to bad times by laying off workers — whom the owners, of course, generally have never met. It's harder to fire people who have worked alongside you for 15 years.

Now the big HME companies may be gradually losing another long-standing advantage: their ability to offer better benefits along with competitive pay. The data from HomeCare's latest annual survey of HME compensation, taken during June and July, suggest that the benefits gap between small and large firms is closing, especially in the all-important area of medical insurance.

Among the 459 HMEs responding to the survey this year, the smallest providers were more likely than in 2004 to offer their employees medical coverage, dental plans and pension plans. The larger firms were cutting back in those areas.

While the survey also showed that smaller firms were somewhat less likely than large companies to hike employees' pay, at the same time, they were more likely to give above-average raises.

The 2005 survey's major findings about salaries, bonuses, raises and benefits follow.