Remember when you made the decision to become a physical therapist? I bet one of your considerations was the stability of the job market and the clear(ish) path from starting your career to retirement. A new report from the APTA has changed everything for physical therapists. Don't worry, all will be well as long as you plan accordingly. This article is meant to educate you on how physical therapy careers are changing, why you should care, and what you can do to stay ahead of the game.
The Technical Stuff
I'm going to get slightly technical here, but it's important to understand the basics of how workforce projections work to better understand their implications.
The APTA recently published their PT workforce projection model which projects the future supply and demand for physical therapists by 2025. The projections use an attrition rate (the rate at which practitioners leave the workforce) ranging from 1.5% - 3.5%. The key take away from the projections is at 1.5% - 2.5% (fewer people retiring) attrition rates, the APTA is projecting a PT SURPLUS. This is important because it represents a shift from undersupply to oversupply and can potentially impact employment and wages.
Why Should You Care
I know this stuff never seems to matter, especially when we talk about a year like 2025, but let me explain why it does, and how you have been planning for your future for a long time now. Remember when you decided to spend 7 years and hundreds of thousands of dollars to go to PT school? That was you looking far into the future and making a plan to make sure you had a nice life for yourself. You are now done with school, but that does not mean that you should not still be planning. It means that you now need to educate yourself on the reasons to plan and how to do it rather than an institution (your school) guiding you and telling you how and what to do.
Why the APTA projections and human capital are important:
In this example, we will assume that Jane and Sally are both physical therapists. They went to the same school, have the same work experience, and both work at the same private practice. They are the same in every single aspect except one. Sally decided to pursue a residency and later completed her fellowship while Jane did neither.
Since Sally has dedicated the time to further develop her human capital by continuing her studies, she is of more value to the private practice relative to Jane. Sally would be looked upon as better skilled and more qualified to perform her job. The private practice can also now advertise and attract clients based on the notion that their physical therapists have better credentials than its competitors. Therefore, Sally creates more value for her employer, which increases the probability of higher pay and less risk of losing her job relative to Jane.
Also, Jane has done nothing to further her education. After ten years in the workforce, an employer may begin to contemplate if Jane is worth the amount she is paid and look for alternatives. A new graduate with a lot of desire and ambition may not have as much experience as Jane but will be an attractive alternative because they will most likely cost the employer a lot less in terms of salary. Jane’s future in the PT field is now at risk. When it comes to using Merit-Based financing, Sally would get better terms on her loans and financing needs because she would be considered less risky from a financial underwriting perspective. For example, if both Sally and Jane applied to refinance their student loans or apply for a mortgage, Sally would receive financing with a lower rate.
Physical Therapists and Human Capital
Exactly what is human capital? What does that even mean? Why are we even talking about a finance term on a PT website? Human capital is essentially you and what you bring to the table that differentiates YOU from all the other PTs in this world. It’s what makes you competitive in this busy market to employers and patients alike.
This is important to students (#DPTstudent & #PTAstudent) and recent PT graduates (#FreshPT) because you want to make sure you stand out from the crowd and land your first job. As you progress through your career, continuously building your human capital is extremely important especially if the APTA’s projections about a surplus of PTs holds true.
Human capital is also becoming more and more important to your personal finances. This is the case because new products rely on what is referred to as “Merit-Based Financing.” It is particularly critical for recent graduates who usually have little to no work experience or financial assets. What they have, however, is the potential for future earnings and the ability to manage these earnings wisely. In fact, the technology and financial products we are creating at FitBUX for the PT industry are made possible due to the analysis of human capital.
Ok, So What Do I Need to Do?
The most traditional way to build your human capital is to further your education. You are currently doing so in getting your DPT. Further education would be to get designations both towards the end of your studies and post-graduation. For those that are interested, Meredith Victor Castin published an awesome guide on various designations.
Education and designations are not the only way to develop your human capital. Things like learning a new language, joining and leading groups, volunteering, and publishing research reports are just a handful of things you can do that require nothing but an investment of your time…and that investment will pay off in the future. For example, being fluent in Spanish may take you some time to learn but if you are working in a location such as Southern California, your skills are going to be in high demand.