Semi-retirement: How to have your cake and eat it

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semi-retirement

If you love being a vet but are sick of managing a business, semi-retirement may be for you. By Angela Tufvesson

More Australians than ever are using part-time work as a way of easing into semi-retirement, and vets are no exception. According to the ABS, 49 per cent of people aged 65-69 work part-time, increasing to 57 per cent of workers aged 70-74. Research by Mercer reveals 73 per cent of people aged 50 and over believe they will semi-retire. Among vets, 33 per cent of the workforce have cut back to reduced hours, and anecdotal evidence suggests a growing proportion do so in the twilight years of their career. Crucially, most practice owners plan to—or want to—semi-retire when the time comes to cushion the effects of retirement and reap the lifestyle rewards.

The options

“Most vets are looking to semi-retire,” says Kelly Gall, a commercial finance consultant at BOQ Specialist. “Most would rather be able to keep their brains active and enjoy what they do. For most of our clients, it’s about the love of the work and doing a good job rather than being motivated by money. As a whole, it’s not as money driven as other professions.”

For most practice owners, selling all or a portion of the practice and continuing to work in the practice in a part-time capacity is the most common model of semi-retirement. Traditionally, practice owners would sell—often in bundles of shares—to a loyal junior associate who assumed responsibility gradually under the mentorship of the former owner. A growing number of corporate groups are now offering a second option: sell the whole practice in one go and become a part-time employee.

Jon Shell, chair of VetPartners Australia which has purchased 44 practices so far, says the corporate ownership model is becoming much more common in Australia. “It used to be that if you sold your practice and wanted to work in your practice, that was only possible if you sold it to someone you worked with for a long time,” he says. “Now you have an additional option with companies like ours where our whole purpose of being is creating an environment where an owner can retire and stay in their practice.”

Most vets are in their late 50s or early 60s when they decide to sell, and most stay on for at least two years after the practice changes hands, says Tomas Steenackers, managing director of National Veterinary Care, which purchases practices with annual revenues above $800,000. “Vets are extremely passionate about what they do and they don’t want to stop straight away,” he says. “They’ve sold the business but they’re still enjoying doing the vet work.”

“For most [vets], it’s about the love of the work and doing a good job rather than being motivated by money. As a whole, it’s not as money driven as other professions.”—Kelly Gall, BOQ Specialist

According to Paul Nadge, state manager for SA, WA and NT at Medfin Finance, private sales are typically more personal but require a longer handover period and more input from the outgoing vet, while corporate sales tend to offer a clean break and greater flexibility minus the personal touch.

“With the corporates you’re in or you’re out,” says Nadge. “You don’t normally see a staggered sell-down of your ownership or equity, so once you’ve sold to them, your practice is gone and you become an employee and negotiate the hours you want to work,” says Nadge. “The corporates own a lot more practices and can probably be a bit more flexible in meeting the work requirements of the exiting owner. From what we’ve seen, in the early stages they like to keep the owners—particularly if it’s a single owner—active in the practice so the clientele is comfortable with the transition process.

“With the other model, when an associate becomes an owner, it’s often a big learning curve for them so most of the time we don’t see a complete exit from the get-go—perhaps a majority stake then the balance at an agreed future date. Even if vets sell 100 per cent of the practice to a private associate who’s worked for them, generally the contractual terms are that the outgoing vet will at least work two to three days a week for a period of 12 months.”

The benefits

With management hassles usually passed onto the new owners, semi-retired vets no longer need to worry about staffing, administration or tax and are free to enjoy clinical work. “Veterinarians really like being veterinarians,” says Shell. “I see a lot of vets who are thinking about retirement. Very few say they are finished being a veterinarian but a lot of them are finished with management.”

What’s more, Dr James Ramsden, president of the practice management group at the Australian Veterinary Association, says easing into retirement offers mental health benefits for vets. “People got burned out and were under a lot more pressure in the past with the hours they worked,” he says. “It’s a little early to say whether [semi-retirement] is a better option, but in theory if you work less you can focus your efforts on doing something else, which is important because, as we’re aware, there’s a high level of mental illness and suicide in the profession.”

Unsurprisingly, the industry stands to benefit from experienced vets no longer weighed down by the demands of running a practice sharing decades of valuable knowledge. “It comes down to having the assets or the value of vets still working in the industry,” says Dr Ramsden. “You’ve got someone who has developed incredible skills over time but they might not be physically up to the arduous amounts of work, so they can still work, they can train the younger vets and continue their connection with clients, and maintain satisfaction in themselves that they’re doing useful work.”

Aspiring practice owners have perhaps the most to gain from the semi-retired cohort, says Gall. “For the most part, the people who come to talk to us about acquiring a practice or buying a share of a practice are usually younger associates,” she says. “It’s a great idea because they have a built-in mentor who’s owned and operated the practice for however many years, and they’re able to have a mentor on board helping with the transition into the business administration side of things.”

Future trends

The industry has undergone a dramatic feminisation since the 1970s, with women now comprising almost 80 per cent of veterinary science graduates and more than 60 per cent of practitioners. Ramsden says because women are more likely to work part-time hours to juggle family responsibilities, the industry is likely to see increased demand for flexible working arrangements among younger vets that mirror the working arrangements of semi-retired vets today.

“The traditional vet would work ridiculously long hours seven days a week and be on call,” he says. “Female graduates don’t want to do that and they’re not that interested in owning a practice that entails working 50 hours a week and selling it 40 years later, so a lifestyle approach to work is happening at a younger age.”

The growing presence of corporate groups and an increasing focus on work-life balance means reduced hours may become commonplace among male and female vets of all ages. “With the newer graduates, they’re working a lot less now than their contemporaries would’ve been 30 years ago,” says Dr Ramsden. “They don’t do the after-hours they used to do, and they’re edging into a more flexible lifestyle much earlier.”

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