10.20.17 Issue #815 info@mckenziemgmt.com 1-877-777-6151 Forward This Newsletter
 

Why Guaranteed Hygiene Salaries Don’t Work
By Sally McKenzie, CEO

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If you have associates in your practice, you likely pay them between 28-35% of what they produce – which motivates them to produce more. You wouldn’t dream of asking them to dial for dollars to keep their schedule full because this task cuts into their time chairside, and that costs the practice money.

The same is true for hygienists. Like associates, they’re producers, and should be compensated as such. (Make sure you check your state laws.) Unfortunately, many dentists opt to pay their hygienists a guaranteed salary instead, just like they would any non-producing employee. They also ask them to call past-due patients in their down time to help make up for any production shortfalls. This system leaves hygienists with absolutely no motivation to increase their production levels, which means hygiene departments often stay stagnant, which of course eats into your bottom line.

Now I understand why many dentists pay their hygienists a guaranteed salary. They want to keep their employees happy, after all, and most prefer to know exactly how much money they’re going to see in their paycheck each month. The problem is, if the hygienist isn’t meeting production goals or has a salary that goes beyond 33% of what is being produced, which is the industry benchmark, then it’s keeping you from meeting your full potential and hurting your practice. In fact, you’re probably looking at overhead that’s more than 62% of collections.

Let me give you an example to help put this all into perspective. Say your hygienist makes $45 an hour and works eight hour days. That’s $360 a day. If the hygienist produces $1080 a day, or three times his/her salary, you’re golden. The hygienist gets one-third in compensation, one-third is applied to practice expenses, and the last third comes back to the practice as profit.

Sounds pretty good, right? The problem is, this isn’t how it plays out in most practices, especially if the Scheduling Coordinator isn’t trained to schedule hygienists to produce three times their salary, or if no one is accountable for the recall system that feeds the hygiene schedule.

If these systems are struggling, you’ll have plenty of days where your hygienist doesn’t meet production goals. That means the practice is losing money, yet you still owe your hygienist that guaranteed salary. While fault can lie potentially in several areas, not necessarily with the hygienist, the result is the same: the practice suffers.

The Problem with Straight Commission
Paying hygienists a salary based on straight commission is another system many dentists use, but this can lead to problems as well. Employees want security, and the thought of having no idea how much money they’ll see in their paycheck each month makes them more than a little nervous. If their production is down one month for whatever reason, it could lead to some serious financial struggles.

Another problem? Some hygienists might be willing to sacrifice quality for quantity if their reward is more money. While this scenario is rare, it does happen, which means the quality of patient care could suffer – leading to unhappy patients who decide it’s time to find a new dental home.

The Benefits of a Two-Tiered System
You’re probably thinking, “Ok Sally, how exactly should I pay my hygienists if a guaranteed salary and straight commission can damage my practice?” Well, doctor, I’m glad you asked. I believe the best system is a guaranteed base plus commission. Why? Hygienists get the base pay they want to feel financially secure, but still have incentive to increase their productivity so they can earn even more.

Once you implement this system into your practice, I suggest you play it up in your advertising the next time you’re ready to hire. The two-tiered payment structure will attract candidates who are willing to work hard to boost their income. This motivation, in turn, will increase production numbers and revenues. 

Get Your Hygienist On Board
Most people don’t like change, so when you introduce this new payment structure to your hygienists, they will likely be a little leery. Take the time to explain exactly how it works, and not only how it benefits the practice, but also how it benefits the hygienists. Point out that earning potential is no longer limited. They can grow their income while also helping the practice thrive.

Paying hygienists a guaranteed salary could be holding both them and your practice back. Implementing a two-tiered system gives your hygienists the opportunity to grow, while also increasing practice production and your bottom line. Take my FREE HYGIENE ASSESSMENT now.

Next week: Grow your practice with a two-tier hygiene salary structure

For additional information on this topic and more, visit my blog: The Lighter Side

Interested in speaking to me about your practice concerns? Email sallymck@mckenziemgmt.com
Interested in having McKenzie Management Seminars speak to your dental society or study club? Click here.
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Belle DuCharme, CDPMA
Instructor/Consultant
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Termination and Turnover Hurting Patient Retention
By Belle DuCharme, CDPMA

Office Manager Training Case #OM498

“Our practice has had a lot of turnover the past couple of years.” 

“Nancy” (names have been changed) explained the challenges her practice was facing when she came to McKenzie Management for Office Manager Business Training. The doctors discovered the practice had been embezzled by the previous office manager, and cash flow was poor when Nancy took over. The practice was doing a lot of marketing and getting many new patients, but there was not a proportional number returning to the practice at recall. “Why is that?” Nancy asked.

Unfortunately, the former office manager was a favorite of the patients and had been employed there for many years. This manager took it upon herself to take the patient contacts and call them to explain why she left. The reasons she gave were not true, so she was asked to stop. To add fuel to the fire, the owner doctor was losing her patience with the underperforming dental assistants and couldn’t control her disappointment in front of the patients.

They are “empty heads” said the doctor regarding the dental assistants working in the practice. “The job pool is very poor in this area and by the time I recruit, interview, hire, and train a replacement, it’s a huge emotional and financial toll. Sometimes the person I hired is even worse than the one I let go.”

The doctors were doing what they could to try and train the dental assistants and help them achieve better performance. But the dental assistants knew the doctors would be hard pressed to find replacements for them, especially with the low pay they were receiving.

These stresses and/or fears can lead to resolution paralysis, or you put up with the poor performing employee for much longer than you should. Too many employers allow themselves to be held hostage by underperforming employees. This is not a winning situation for anyone involved.

Patients see, hear and feel the turmoil in the practice. They are not there every day and haven’t gotten used to it like the doctors and staff have. When things are said that patients should not hear, that is often a reason why they don’t return. In this office, there was also no one calling patients to make unscheduled appointments for recall or treatment planned. The combination of a bad patient environment coupled with a lack of follow-up equals poor retention.

The morale of the staff often reflects your attitude. If you are unhappy, chances are they will be unhappy too. If you project a positive mental outlook, they are likely to respond the same way.

On analysis, it was discovered that none of the employed dental assistants were certified. They were all trained on the job and were making the lowest wage in the office, and probably also in the area. They hadn’t been dental assistants long enough to know whether this was a career choice for them. When a dental assistant quit or was terminated, it was because more was expected of her/him than they had the experience or training to deliver. The doctors were not willing to hire a seasoned RDA or CDA who was a career professional and had the skills to do temporary crowns and other expanded duties.

Performance is a function of both ability and attitude. You can have someone with a great attitude who lacks ability; you can have someone with a bad attitude and great ability; it is great to have someone balanced between the two.

People with low ability and/or poor attitude may have been poorly matched with the job in the first place. They may be in a position that's too demanding for them. Providing training is necessary when you hire below the skill level you need.

Focus on the resources provided to do the job. Does the employee have what is needed to perform well and meet expectations? Ask the employee for thoughts, ideas, and/or suggestions that will bring about improvement. You can never have a stable practice that keeps patients when you have chaos and resentment in the team. 

McKenzie Management can help you to sort through the systems that are broken and get you back on track. Call today for information about Practice Consulting and Business Training.

If you would like more information on McKenzie Management’sTraining Programs to improve the performance of your team, email training@mckenziemgmt.com

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