This weeks post comes from our friend and Dental Employee Expert, Sharyn Weiss, the CEO of Weiss Practice Enhancement. Weiss Practice Enhancement is a practice management firm serving dentists nationwide. Weiss was the curriculum director and senior consultant at Pride Institute for 17 years and is the author of multiple books for dentists on topics such as how to compensate employees, how to hire, and how to lead great team meetings.
In this post, Sharyn shares tips and tricks on how to hire without bankrupting your practice or upsetting your current employees.
Imagine enjoying a rare, stress-free lunch when one of your employees hands you her two weeks’ notice. Suddenly you’re propelled onto the nerve-wracking, roller-coaster world of hiring. As you review job ads, one thing becomes immediately apparent. Your current employees make less than what job applicants are demanding and apparently getting.
Should you raise your current employees’ compensation to match what seems to be the new going rate or do you maintain your employees’ compensation levels and hope they won’t realize that their new colleague will make more than they do?
Dentists believe they have three options:
Option 1: Hire the new employee at the requested salary and increase the compensation of everyone else in that department to match it.
Your veteran employees will be pleased, unless they realize that up to now, they’ve been underpaid. This option will also increase your payroll costs and may set a precedent that raises are not connected to performance and that every time someone is hired, the current team can expect a compensation adjustment. Eventually this option can become untenable.
Option 2: Hire the new employee at the requested salary without raising the compensation of your team and hope they don’t learn about it.
Eventually your employees will learn that their colleague, who has the same job, is making more than they are. This won’t end well. And unfortunately, employee’s salary demands don’t always correlate with their expertise, so dentists can end up with a highly compensated employee who doesn’t meet their basic expectations.
Option 3: Hire new employees at the same compensation level of everyone else in that department.
This is the most fiscally responsible option, but it may prevent you from filling an opening quickly – or ever.
What Should You Do?
Begin by considering the financial ramifications. Can your practice absorb and sustain additional employee expenses? If your practice doesn’t show a profit after you pay your monthly expenses or if your new payroll level will exceed 38% compared to your production, then options 1 and 2 are not sustainable unless you have a plan to raise production and collection.
However, if your research indicates that you are underpaying employees, you’ll need to provide a cost-of-living-increase for your team at some point. Ideally, do this at annual performance and salary review meetings that are held at the same time of year for everyone. This allows you to forecast and plan for additional employee expenses.
Negotiate with the Applicant
Your best step right now is to use the salary request as part of the interview process. An applicant might not have a logical, non-negotiable reason for their salary demands; they may simply be following the advice of their peers. The following are sample questions to help you understand their perspective and negotiate a more reasonable salary.
- How did you arrive at this salary level?
- Does this amount include the value of benefits? (Define what you mean by benefits. Most unsophisticated employees don’t understand benefit packages or their value.)
- What benefits are most important to you?
- My current employees with this job title make $XX when benefits are factored in. Given this information, would $XX be acceptable to you?
- As a business owner, I want you to be able to live comfortably in our community and also provide a salary that matches your skills and your contribution to my practice. Since your requested salary is higher than what my current team makes, what specifically will you do to justify this amount? How will you increase our production / collection /efficiency so that the practice can afford you?
An applicant may point to their years of experience or an impressive job title as justification for a higher salary. However, this isn’t relevant. You need them to demonstrate that they have a valuable skill set that will create more profitability or greater efficiency at your practice. If they can’t demonstrate that, then their requested salary is not commensurate with their skills.
Sometimes dentists promise applicants a salary increase if they pass a 90-day probation period. If you go this route, be extremely careful about your wording and your expectations.
- Don’t describe this a “probation” or “trial” period because these terms can violate your state’s “at-will” guidelines. Simply say you and the employee will review their performance and compensation in 90 days.
- Document exactly what the employee needs to accomplish to merit an increase. Design goals to be objective and measurable. For example, a front desk employee’s goal could be: Within 60 days design and implement a strategy to reduce our no-show and unfilled appointments so that by 90 days our practice has achieved a XX% reduction in open hours.
Attaching objective criteria to your expectations will make the salary decision a lot easier and less emotional.
Final Words
It’s easy to get sucked into the fear that you’ll never be able to hire or retain employees unless you agree to exorbitant salaries.
But compensation is not just about a specific salary; it encompasses all the ways employees are recognized and rewarded for their contribution. Mature, competent employees want to work in practices that boast a supportive culture and kind colleagues. Focus on attracting employees who recognize that their compensation must match their contribution. These are the people who will most likely become long-term, valuable team members.
A Quick word from Holli
“I agree with much of what Sharyn says. It’s essential to consider the financial health of your practice when hiring. However, in today’s market, your job offerings need to be competitive to attract applicants. If your hourly rate is lower than others but you offer better benefits, assign a dollar value to those benefits and add that to the pay rate.
For example, if you’re offering $25/hour and the benefits equate to an additional $4/hour, list the job at $29/hour and label it as “Total Compensation.” During the interview, you can discuss the breakdown as Sharyn suggested and persuade the candidate to join your practice.
Ensure your team is aware of this approach, so they understand where the $29/hour rate came from and don’t get concerned.
I wrote this article a few years ago for candidates about benefits and how they increase pay. You might find it useful for your interviews.”
Now back to Sharyn!
I’ve developed a free Dental Wage Planner tool to help you analyze your current payroll costs and forecast the affordability of raises. Contact me at [email protected] and I’ll be happy to send it to you.
Sharyn Weiss is the founder of Weiss Practice Enhancement, providing practice management consulting for dentists nationwide.
Thank you Sharyn for an another amazing post!
Smile,
Holli Perez
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