Three Small Staffing Changes That Can Boost Your Pharmacy's Profits

July 22, 2020
Don Via, a Good Neighbor Pharmacy Business Coach at AmerisourceBergen
Don Via, a Good Neighbor Pharmacy Business Coach at AmerisourceBergen

Although there's no magic formula for finding the appropriate pharmacy staffing levels, there are subtle shifts you can make that will have a big impact on your bottom line.

Although there's no magic formula for finding the appropriate pharmacy staffing levels, there are subtle shifts you can make that will have a big impact on your bottom line.

Pharmacy foot traffic can ebb and flow from day to day, which makes it hard to pin down how many people you need to keep on payroll. Some days are busy, while others pass by with fewer scripts and less to do. Balancing out the chaos with the quiet takes effort. Although you may never nail down the appropriate pharmacy staffing levels for every hour of the week, every step you take toward a more balanced pharmacy staff-to-script count ratio means better profitability at the end of the year.

And yet, change can be difficult. If you've served your community for years and have staff members with long tenures, you may feel hesitant to shake things up. Many pharmacy owners simply opt to go with what’s worked in the past instead of evolving for the modern-day needs of the business. This is certainly a more comfortable option, but it's probably costing you money.

Because staffing accounts for a large proportion of an independent pharmacy's overall expenses, even minor adjustments can save thousands annually. Here are a few to consider:

1. Match hours and shifts with actual demand

Independent pharmacy staffing models should align hours with measured demand, not just a static weekday 9-to-5 schedule. By reviewing sales volume by hours, days, and seasons, you may find that your busiest windows don't match up with employee schedules. If leaner shifts see higher customer volumes, it can lead to long lines and frustrated customers.

Also consider whether you can cut entire days from the schedule, depending on the needs of your community. One small rural pharmacy I worked with had always been open on Saturdays, even though it was the slowest day of the week. When I asked them why they were open on Saturdays, the owner’s response was because they always had been.

I recommended they try closing on Saturday after analyzing historical dispensing data, and in time that minor change paid off. Within a year, that small business had saved nearly $16,000. Even now, the benefits go well beyond revenue. The owner, who had been working weekends for the last 20 years, said his life completely changed. He finally got back his Saturdays. And customers all said it was great what they were doing for the staff, giving them the weekend off to spend with family. That kind of positive change is immeasurable.

2. Reconfigure staff responsibilities and stations

Technicians' standing areas can make or break a pharmacy's workflow, and inefficiencies on the floor can lead to disruptions. To eliminate that friction, look at the physical layout of the pharmacy and remove barriers; if you can make things more linear, you can more effectively organize script fulfillment from start to finish. Just make sure you cross-train employees on different areas of the fulfillment line. That way, if someone resigns, you can pinch-hit for other staff members without skill gaps.

This can even lead to long-term shifts in responsibilities that produce greater savings. At 1 large independent pharmacy, they implemented these best practices by moving and cross-training staff members. Then, when they eventually lost someone through natural attrition, they realized that person wouldn't need to be replaced. At the end of the day, they were just overstaffed.

3. Create modern-day workflows

The way we get our medications is changing, so pharmacies need to be constantly evolving too. Take e-prescriptions, for example. As more physicians send scripts electronically, stores stand to benefit from adapting independent pharmacy staffing models to accommodate emerging intake procedures. This is a simple fix that involves adjusting the workflow and workstation staffing to account for more scripts coming in electronically and fewer patients dropping them off at the counter.

People are also getting bigger supplies of their medications, including 60- and 90-day refills at each pickup. Aside from ensuring you have the staff to fulfill these bulk requests, you may also want to shift operations in different ways, such as investing in automation for compliance packaging and adhering to proper inventory management to ensure optimal in-stock quantities.

Identifying Opportunities to Optimize

Every community is different and so is every business. The changes that work for yours may vary from others. Therefore, it’s important to look at the data to determine what adjustments you should make, starting with a few key retail pharmacy staffing metrics:

  • Payroll percentage of sales

This ratio compares how much payroll costs your pharmacy in relation to its total sales. Generally, most independent pharmacies average around 13%. If yours exceeds that benchmark, it may indicate problems caused by an inefficient labor ratio, such as overstaffing. Along with this measure, it's also a good idea to consider the pharmacy staff-to-script count ratio.

  • Daily and seasonal demand

Calculate sales percentages and scripts filled per hour, week, and season to identify high-demand times. These metrics can help you optimize staffing schedules or otherwise rethink business hours.

  • Trends in prescribing

Review trends in prescribing, such as e-script volumes or bulk supply refills. These stats can help you adjust workflows to accommodate new trends in medication fulfillment.

Forge a New Path Forward

Bear in mind that we're operating in a new era given COVID-19, and pharmacies need to adapt to new ways of doing business—from increasing delivery capacity to accommodating more curbside pickup to enabling social distancing inside the store. These changes may not be as temporary as many people originally thought, so these shifts in workflow must be routinely taken into consideration.

It's all about balance, which is why you should continue to evaluate labor and pharmacy productivity benchmarks on a regular basis. This will ensure you're optimizing your business year over year, as well as during times of rapid change.

After all, small adjustments can create measurable impact over the course of 12 months, but you do have to be willing to take the first step and sometimes deviate from what you've always done. These moves can pay off in the form of higher profits and improved morale for those independent pharmacies that commit to operating thoughtfully and evolving boldly.

Related: How to Engage With Elected Officials When You Can't Meet Face to Face