If you own or manage a veterinary practice, you don’t need us telling you what you already feel every day.
Hiring and keeping veterinarians has never been harder.
As pet ownership continues to climb, the supply of veterinarians hasn’t kept pace.
Australia is experiencing a severe and prolonged veterinarian shortage, particularly in rural and regional areas, driven by increased pet ownership, low university enrolments, high student debt, and significant burnout from long hours and intense work.
This downturn has a long-lasting impact on essential services for pets and access to care.
The impact of sign-on and retention bonuses
From a financial planning perspective, bonuses can be powerful tools. But when they’re not designed carefully, they can also create resentment, salary compression, and costly turnover among the veterinarians you already have.
Let’s talk about how to use bonuses strategically—without undermining your long-term financial health or your practice culture.
Sign-on bonuses – not a silver bullet
In a competitive market, sign-on bonuses can absolutely influence a veterinarian’s decision.
When candidates are weighing multiple offers, a larger upfront payment can help tip the scales, particularly when there are aggressive bidders in the mix.
That said, the right sign-on bonus isn’t necessarily the biggest one. It’s the one your practice can sustainably afford.
Before making an offer, we encourage practice owners to ask three questions:
- What is our realistic hiring timeline?
A longer vacancy may cost more in lost revenue and burnout than a reasonable bonus. - What are comparable practices offering?
Reviewing job postings for similar hospitals gives you valuable market context. - What non-monetary benefits can we highlight?
Flexible scheduling, a supportive culture, mentorship, and quality of life in your community can all carry real weight, especially for mid-career veterinarians who value time over (or alongside) monetary gain.
Don’t be afraid to think outside of the box as well.
- Payout of referral bonuses to existing team members who recommend a successful hire.
- Relocation bonuses for veterinarians moving a significant distance.
“What about me?” The hidden cost of bonuses
This is where we see practices run into trouble.
When a new veterinarian walks in with a five-figure sign-on bonus, and a higher salary, your tenured veterinarians notice.
Over time, this can create salary compression – where experienced veterinarians earn close to (or less than) new hires, despite years of loyalty and productivity.
The long-term fallout of this can be diabolical.
Disengaged, undervalued veterinarians are far more likely to leave if they feel undervalued, and replacing them is far more expensive than retaining them.
So, if a tenured veterinarian raises concerns, it’s not a complaint to dismiss.
It’s a warning sign.
How to deal with disgruntled tenured staff
If you are finding yourself in this position, open, transparent conversations matter.
Explain why sign-on bonuses are necessary, whilst acknowledging they can feel unfair. Then shift the discussion to solutions.
More veterinarians on staff can mean:
- Fewer on-call shifts
- Shorter workweeks
- Better work-life balance for everyone
Just as importantly, ask your experienced veterinarians what they value most, and it may be time to consider a retention bonus for your existing, loyal staff.
Retention Bonuses – a tool worth considering
Retention bonuses can be an effective way to stabilise your team when the market is volatile.
These bonuses reward veterinarians for staying a defined period and can help ease hiring pressure now and in the future.
Like sign-on bonuses, retention bonuses should come with clear agreements:
- A defined employment period
- Repayment terms if the veterinarian leaves early
- Clarity on how and when the bonus is paid
From a planning standpoint, retention bonuses should be coordinated with salary reviews, benefits, and career development.
They are not to be layered on as a quick fix, as you could very well find yourself in even deeper waters.
In our view, the most successful retention strategies go well beyond bonuses. If your practice is experiencing tension around pay or new-hire incentives, consider these questions:
- When was the last time compensation was benchmarked against the market?
- Are there ways to adjust pay structures to reduce compression?
- Can you reward loyalty with additional holidays, better schedules or fewer weekend shifts?
- Would wellness benefits such as gym memberships add meaningful value?
- Are there clear pathways for experienced veterinarians to take on leadership roles with higher compensation?
Retention isn’t just about a fatter paycheck – it’s about designing a workplace where your veterinarians can build sustainable, rewarding careers.
On a final note, sign-on bonuses may be unavoidable in today’s market, but they shouldn’t drive away the people you already have.
With thoughtful planning, transparent communication and an honest and open approach to compensation, your veterinary practice can navigate this challenge without sacrificing financial stability or your team morale. This way, you’ll build a team that will thrive for years to come, together.
Get in touch with our team to discuss your staff retention planning or assistance with your hiring process.
