Episode Details

Would you rather read the transcript? Click here.

Today, I walk through four compensation models that work for testing and therapy practices –  percentage split (fee-for-service), salary + production bonus, salary + profit share, and flat hourly – plus when each model makes sense. I break down the math behind forecasting (capacity, reimbursement, payroll taxes, PTO, benefits), show where owners get into trouble (overpaying early, ignoring utilization, fuzzy admin time), and share a step-by-step rollout plan with transparency practices that improve retention and engagement. You’ll leave with clear guardrails to pay people well without sinking the ship.

Main Topics

• Why compensation causes the most stress for owners and how it became confusing (00:00)
• Percentage split (fee-for-service): ranges, pros/cons, when it fits (02:23)
• Salary + production bonus: structure, turnover impact, transparency keys (04:24)
• Salary + profit share: culture/retention upside and owner transparency (06:51)
• Flat hourly per billed hour: predictability vs. reimbursement risk (09:18)
• Forecasting the math: eval capacity → revenue → sustainable pay (11:40)
• Aligning pay with values: quality, timeliness, client satisfaction (16:30)
• Pitfalls and guardrails: utilization, admin caps, COL raises, communication cadence (18:55)

Cool Things Mentioned

• The Testing Psychologist mastermind groups and business consulting
• Reverb: the premier AI-powered report-writing platform for testing psychologists
• APA Work in America Report (context on workplace stress): www.apa.org/pubs/reports/work-in-america/2024/2024-work-in-america-report.pdf [American Psychological Association]
• BLS Occupational Outlook—Psychologists (national wage benchmarks): www.bls.gov/ooh/life-physical-and-social-science/psychologists.htm [Bureau of Labor Statistics]
• BLS Occupational Employment & Wages—May 2024 (wage tables): www.bls.gov/news.release/pdf/ocwage.pdf [Bureau of Labor Statistics]
• Pay transparency and business outcomes (SHRM research summary): www.shrm.org/topics-tools/news/inclusion-diversity/shrm-research-pay-transparency-improves-business-outcomes-close-wage-gap [SHRM]
• Profit sharing & retention (PayScale brief): www.payscale.com/compensation-trends/new-research-finds-profit-sharing-increases-employee-retention-and-engagement [Payscale]
• WorldatWork Pay Transparency Study (policy approaches): worldatwork.org/research/pay-transparency-study [WorldatWork]

Featured Resources

I am honored to partner with two AMAZING companies to help improve your testing practice!

PAR is a long time supporter of the Testing Psychologist podcast, and I will continue to bring you featured items from their catalog! Listen to each episode for specific product recommendations and links. Learn more at www.parinc.com.

TherapyNotes is the leading EHR system for mental health practitioners. I’ve used