The phone keeps ringing and, for about the last 6 months, every question posed by the caller has centered on the fact that it is hard to keep or find good staff members. It started from the day we reopened our business from the COVID shutdown last year and the hygienists decided that they were not going to work in dentistry as long as the government would pay them to stay home. Most of the rest of the office felt the same way. That slowly ended and then they didn’t want to work if they had to use aerosol-producing instruments. I was quick to point out that we did hygiene without Cavitrons and Prophy Jets for the first 2 decades of my career, and I was fine with them doing everything by hand. That went right over their head. They quickly responded that their offices couldn’t get them enough PPEs to “feel safe”. The argument goes on, but it seems now that every member of our team feels they should have more money. Front desk, assistant, hygienist, associate, you name it, they all now “deserve” more money.
The reality is that since 2008 the average dentist has taken home about 2% less every year while overhead creep from decreased reimbursements, increased costs, and diminished business has lowered profits. While the days of longevity-based raises (paying people more if they worked for you longer) and cost of living raises (paying people more as the cost of living went up) died two decades ago when the average office moved to 75% managed care patients, which meant that we could no longer just raise our fees to offset the expected increases in pay. Our employees have failed to understand the math and reality of doing more work but being paid less (25% to 45% write-offs) in reimbursements from managed care plans.
So, what do you do? It should begin with reassessing where you are. If you want a reasonable overhead and staff that are tickled pink with what they are paid, you have to look at the reality of profitability in a world of managed care. This self-assessment needs to begin with you understanding your collections per employee per month. This is quite easy to do. Just take a six to twelve-month period and add the collections up and divide by the number of months you used to get your average monthly collection number. Then add up the number of staff you have. Any employee: associates, assistants, hygienists, front desk, office manager, everyone, then divide the average monthly collections by the number of staff (if you have part time people then the number might be 6.5 or 10.7) and then you have your collections per employee per month. If it is around $14,000/employee/month you are average. Not great, but at least you’re not bleeding out. More like treading water and barely fighting the current. You are losing, but it is so slow you get used to being average. The average dentist gets up every day and goes to work, but their passion is not dentistry. It is that hobby that acts as enough of a distraction that they can tolerate the career where you trade time for money. At this level, you will always have a 67%-75% (at least) overhead, which is not good. If you are in the range of $20,000 to $25,000 collections per employee per month, your overhead should be less than 60% and the practice should be growing every year by 15% to 20%. If you are below $14,000/employee/month you are being swept down stream where you can barely pay your bills and are constantly wondering why you chose this profession.
There is an answer for all of these situations. If you can’t find or keep staff, you need to assume that what you offer in pay plus culture is not competitive in today’s marketplace. Compensation is not limited to the dollar per hour amount they earn. Only in dentistry does anyone look at overall compensation in that context. Great teams are the reflection of what you put into them. People have to want to stay. That falls on you. Pay is not a destination but is constantly reviewed and updated to reflect your business health and the condition of the person you are paying. It must be a partnership where both sides are engaged and participating in making the relationship better. When we do look at the collections per employee per month it means something. You could be over staffed, or underperforming, or you are just right and your overhead is below 60%, staff never leave, and your direct patient referrals reflect the excellence in your culture.
If you find yourself struggling to even hit $14,000 per employee per month, you have to take a hard look at your contribution to the overall health of the practice. Surely at this number your systems and number of patients does not support the quantity of staff you have. If you are having high staff turnover, you can be assured that your pay, culture, and overall atmosphere of the office is lacking. Is it any surprise that staff will desire a better work environment with competitive pay? So, ask yourself what your contribution is to a stable work place that should grow every year in profit. Do you have a prescribed strategy of looking in the right place for the right employee? Do you have the updated policy manual and comprehensive job descriptions that every office needs? Was the selection process for each employee created to have your staff help in making the final decision of whether to hire or not? Do you find yourself always hiring from a position of desperation rather than planned growth? Once you make the selection, do you and your team take the time to onboard that new employee in a way that helps them do a superior job while quickly embracing a winning culture? Do you continue to embrace change and measure each team member’s performance while giving them feedback to improve by spending the time and money to educate, train, and model the results you want? Finally, are you part of the solution or part of the problem when it comes to employee retention and growth?
Our team members deserve the best pay and finest work conditions we can afford. If you find that you cannot compete to get the best staff in your area, please take a hard look to see that if the tables were turned and you were the employee, would you be excited to work for you in this office? It is far too easy for most dentists to blame the economy, the pandemic, poor staff candidates, etc., for struggling to assemble the best team they can. Clearly the fault may lie much closer to home with your own performance, engagement, and efforts.
Give me a call and let me send you a quick and simple Growth Analysis tool that, along with a copy of one week’s schedule and your Profit and Loss Statement will allow me to quickly point out the barriers you face along with what you need to do to overcome them. It is never too late to make tomorrow better. This is how you Summit.
Michael Abernathy, DDS
PS. Please plan to join us “live” on ZOOM next Tuesday evening, April 18, at 7:00pm Central time, for PART 2 in our webinar series Secrets of a Super General Dental Practice. Just reply to this email and ask for the Zoom meeting link. The general topic will be EMBRACING CHANGE and we will give you the tools you need to determine where you are today and some positive action steps you should consider taking in the immediate future to move your practice to the next level. Plan on about 90 minutes or so, including time for your pertinent questions. Hope to see you then.