Important lessons about dental staff compensation

Staff compensation is one of the most important subjects to the dental team; however, dentists often disregard it. And for a subject that is so often dismissed, many staff salaries are skyrocketing the practice overhead. Keeping the topic of compensation taboo creates confusion, anger and alienation usually at the expense of the office in staff turnover.

The office that is comfortable discussing such a weighty issue putting it out on the table, so to speak will ultimately be a friendlier, more trusting work environment. Let’s begin by reviewing the most prevalent concerns and misconceptions often overheard by the dental team.

The dentist’s position: “The biggest obstacle facing my practice today is attracting and hiring good staff.

The staff position: “I wouldn’t recommend dentistry to my friends or family the benefits are nonexistent. I’m career-minded yet I feel that there is no real benefit in staying with dentistry.”

Good employees are not found they are created. Dentists as a whole must determine if their practices are work environments that are conducive to creating self-directed, confident employees. It is the dentist’s responsibility to hire, train, trust and praise their employees in order for healthy work environments to be cultivated. A confident, respected and knowledgeable staff person will the sing praise of their profession. It is when, and only when, this happens that dentistry will obtain a favorable image capable of attracting energetic prospective employees.

The dentist’s position: “Work ethics seem so much lower while salary and benefits are in greater demand.”

The staff position: “I work hard, come in early, work through my lunch and often stay late. I feel this dedication is worth far more than the small raise I just received.”

Work ethics have changed a lot less than most would like to think. Yes, today’s workers seem to expect more benefits and better compensation but it is my experience that it’s not the expectations, it’s the frankness. Workers are much more open than they were twenty years ago and often will be the interviewer rather than the interviewee. This openness has made it appear that younger workers want immediate gratification and that they are more interested in their paycheck than their performance. The day of the silent “Yes sir/ma’am, I’ll appreciate whatever you feel I’m worth” mentality is as dated as a polyester uniform!

The dentist's position: "My staff salary percentage should be between 20-24%, but it is close to 30%. Now it's time for evaluations and salary reviews."

The staff position: “Our evaluations have been postponed for over six months. I know our doctor hates to tell us we’re doing a good job because 30 days later it’s our merit review time to discuss salaries one-on-one.”

Employee performance reviews are essential to keep the lines of communication open and the employees in a progressive rather than regressive mode.

An evaluation should be done verbally at the end of each week during the trial period of 30-60 days. This should be a 5-10 minute exchange of: “Your models this week look much better,” or “I really appreciated the extra attention and concern you expressed towards Mrs. Conner yesterday,” or “As your employer, I see great potential in your ability to communicate our periodontal protocol to recare patients.” Encouragement is the key to new employees moving forward at a faster pace.

It is also important to realize that evaluations at the 90 day, 6-12 months and beyond intervals do not justify an automatic increase in salary. Offering increases at different tiers of learning is a fair way to award raises, not just across the board (same amount for all employees, no matter their performance).

The dentist’s position: “I know my staff members are dedicated and deserve raises yet my accountant tells me I’m 5-10% above the norms, what am I to do?”

The staff position: “If our doctor quit listening to his accountant he would realize we are his greatest asset, not his biggest liability!”

If staff salaries are too high, it is a strong indication that the practice is grossly under-producing. The quick and easy (wrong) way to reduce staff salaries is to reduce the number of staff. Many dental practices are understaffed by one to two employees, ultimately overloading the entire team. This tactic is nothing but a Band-Aid fix to a wound that will never heal.

Hygienists who are properly trained and delegated to will earn up to three to four times their salaries for the practice in increased production. Staff persons, such as assistants or business employees on average earn up to seven times their salary.

My clients who have a high percentage of salaries often hire additional staff under my recommendation and increase the practice production $10,000 to $20,000. Ultimately, their once too high salary percentage falls into the norm of 20-24% of collections. (This excludes all doctor and on-site laboratory salaries, taxes and benefits. Taxes and benefits are separate line items on the Profit and Loss Statement.)

The dentist’s position: “I’ve lost several key employees over the past year to other outside businesses simply because I can’t compete with big business compensation structures.”

The staff position: “Two of our staff went to work out of dentistry for improved compensation. I’d leave too, but I truly love my job, co-workers and boss. He works very hard and wishes he could improve our benefits. I know when the practice improves so will our benefits and salaries.”

Dentists often feel they cannot compete with outside big business. The fact of the matter is, that the practice has the potential to be a “big” business. Staff turnover is costing far more annually than an attractive benefit package.

While newer practices cannot offer the same benefit packages as the well established, more profitable ones, there must be a plan created for future growth that sounds attractive to the employees.

I recommend having each staff member write down the benefits they already enjoy; i.e. vacation, paid holidays, continuing education trips, birthday luncheons, holiday parties, etc. Then ask the staff to make a “dream list” of benefits they would like to see incorporated into the practice. The dentist should meet with their accountant or practice administrator to estimate the costs involved in each of the benefits requested. Once this is finished, create a graduating plan of increased benefits that could be worded:

“We are currently averaging $62,000 per month in collections. Once we average $70,000+ for three consecutive months, healthcare benefits will be included.”

Or:

“When we average $75,000 per month, a 401K Plan will become a reality.”

Sometimes the “dream” sheet of team benefits may sound trivial to the employer, but in reality, if they were not important they would not be mentioned. Remember that if it’s brought to the table, it’s worthy of consideration!

Staff turnover and staff shortages will remain a serious problem in dentistry until recognition and respect prevail. Dentists cannot praise nor compensate staff members who are poorly trained in clinical, business and communication skills. On the other hand, the team will not stay in a practice with low levels of appreciation and inadequate benefits. The remedy to this situation is improved team and practice systems  development, available through many consulting firms and dental training centers.