We seem to get a lot of calls about paying staff. Let me take just a moment and set the stage for looking at what you should be paying. Always start with the end in mind. If you have ever read any articles from us about benchmarks, you know that you entire staff cost (including salary, taxes, continuing education, bonus, benefits, staff meetings, uniforms…everything) should be around 25%. This 25% represents everything spent on staff but not on the owner doctor. As an example, if you were producing about $100,000 per month your entire staff compensation should cost about $25,000/month. What we usually find is that offices that are not really taking the time to run their offices based on numbers and results tend to climb up in the 30+% area. They are one of several things: Over staffed, staff under producing, or a staff that is over paid. So how should we pay our staff and where can I found out the information to make an intelligent decision about their pay?
The first thing I would do is go to www.indeed.com. Look at the bottom of the page and click on “salaries”. When the salary page pops up, all you have to do is type in the position and the location and the site will give you high, low, and average yearly salaries for any position. This should at least give you a starting point. With this information in hand you can now compare what is normal for your area to what you are actually spending. If what you pay is higher, you should still be making about four times what you pay your entire staff each month. If not, you need to start looking for the “why”. Are there systems, training, and practice management that would insure productivity in your office? Does your staff inspire patients to show up, follow through, and refer every one they know? If not, then you have some work to do. We can’t tolerate mediocre staff, systems, or results in a business model for dentistry that will guarantee a continued growth of about 15% a year.
The second thing I would do is look at your fees. Have you done a fee survey to know if your fees are at the range they should be for your area? If not, email us and let us send you the fees for your zip code. Go for an 80-90th percentile from the fee schedule we send you.
With this information in hand you can make the fee adjustments that will allow you to control your overhead and budget what you should pay for staff.
Number three: You should raise your fees twice a year, every year. It usually ends up being about 1-3% every six months, depending on the cost of living increases in the economy. I know you’re thinking that you can’t raise your fees on all the managed care programs you are on. That is true, but you still need to raise the fees for your fee for service patients, and any plans you might join in the future. Just a note: If you have more than 60% of your practice made up of managed care, you are doing something wrong. If you are marketing, you should be attracting fee for service patients as well as those that pick you from a list at work.
The fourth area you need to look at is your hygiene department. Does the hygiene department produce at least 3 times what they are paid? Keep in mind that the “paid” part includes every salary in hygiene. So if you have assisted hygiene, you will need to include the assistant’s salary along with the hygienists. Hygiene should be paid on commission and that level should not exceed 30% of their production including any benefits, pay, taxes, continuing education, and any other dollar amount spent on them. If you want to really turn you hygiene department around, email Max for a report I just finished last week entitled “The Hygiene Factor”. It has scripts, philosophy, and systems for hygienists that will push them into $1,500-$2,500 per day production unassisted. We are charging a $15.00 fee for the report. Call Max at 800-252-0955 today while it is fresh on your mind. You won’t be sorry.
One last thing and I will let you go. Just a few notes about hiring: Hire slowly and fire quickly. The most common mistake in staff acquisition is hiring when you are desperate. The second mistake is taking too long to cut your losses. You can’t motivate people. You need to hire motivated people and keep motivated staff working in your office. Keep in mind that ___ years of experience does not guarantee you’re hiring a great employee. Experience brings habits, and stressed staff will revert to old habits. I have often found that highly motivated applicants that have great people skills are the best hires. They have no bad habits and they are willing to learn the systems we use to produce millions every year.
Good luck, and email or call if you have a question.
Michael Abernathy, DDS
PS – Order “The Hygiene Factor” today, while it is fresh on your mind. We are only selling 100 copies.