The Two-Tier Hygiene Salary: Why itís best for your practice

By Sally McKenzie, CEO Printer Friendly Version

Hygienists are not like your other employees—and that means they shouldn’t be paid the same way. They are producers, which is why giving them a guaranteed salary just doesn’t work.

Just like with associates, the more hygienists produce, the more money they bring into the practice. If they know exactly how much they’re going to make each month, that can possibly cause a decrease in motivation to produce more. No matter how they spend their time, their paycheck is always the same. The money still comes in whether they’re sitting in meetings, attending CE or reviewing recall reports—all activities that don’t do anything to bump up their production numbers.

Dentists typically pay their hygienists a guaranteed wage because it’s what they’ve come to expect. But when that salary goes above the 33 percent of production benchmark, (which it likely will), it damages the practice financially. Overhead starts to rise and practice revenues start to decline, hurting everyone.

For those of you thinking, OK Sally, maybe I’ll start paying my hygienists a straight commission, I would advise against that, too. Yes, it gives hygienists motivation to perform, but they won’t like not having any idea how much money they’re going to be paid each month. It also tempts them to put quantity over quality, which means the patient experience and the care they receive declines. This doesn’t happen often, but if you have a hygienist with this mentality, you’ll start to lose patients.

This is why I suggest considering a move to a two-tier salary structure. You get the best of both worlds. Your hygienists receive a base pay plus commission, so they know they’ll always bring in a minimum amount each month, while also having the opportunity to grow their income. This will motivate them to improve their performance and grow production numbers. They’ll have financial security as well as the opportunity to earn more. An added benefit? Their job becomes more rewarding, and that will show in the way they interact with patients.

Need more reasons to switch to a two-tier hygiene salary? Here are three:

1. You’ll see an increase in both practice production and revenues. When hygienists know they’re going to bring in the same amount of money no matter what, they tend to stick with the status quo. They become content with what they’re doing and see no real reason to up their game. But when they know they can make more if they produce more, they’ll be motivated to go beyond that 33 percent of production benchmark. Hygienists get a bigger paycheck and the practice brings in more revenue.

2. Salaries won’t get too high. Once they understand the benefits, most hygienists love the two-tier system. They’re satisfied with their base pay, which gives them a sense of security, and are excited to have the opportunity to earn even more. They’re happy and their salaries will never cause financial problems for the practice. That isn’t the case with a guaranteed wage. When hygienists earn the same no matter what, it doesn’t matter if their production was down one month thanks to broken appointments or a weak recall system. Their salary creeps above that 33 percent benchmark, leading to financial trouble for the practice.

3. It’s easier to determine raises. Once you switch to the two-tier system, it becomes pretty easy to figure out how much raises should be once they’re earned. You simply base the raise on a percentage increase on the commission, as long as it’s less than the 33 percent maximum.

The scenario is a little different if you opt to pay your hygienists a straight commission. With this system, they’ll get a bump in pay every time you implement a fee increase (which you should be doing yearly). They get the extra money even if they’re not meeting expectations. So, they go home with a raise they haven’t earned, hurting the practice and again leaving them no reason to make improvements.

3. Hygienists will no longer ask for a higher commission rate. Hygienists who work for straight commission often ask for a raise in their rate, especially if they’ve been with the practice for years. If you keep saying yes, it won’t be long before the salary starts to exceed that 33 percent benchmark. The practice suffers, yet most dentists give into the request, again because they want to keep the hygienist happy.

If you have a two-tier system in place, the raise structure is clear. Hygienists get more money when they earn it, not just because they ask for it. This is a much better way to determine raises.

Paying hygienists a guaranteed wage or a straight commission can hurt a practice financially. I suggest you switch to a two-tier structure instead. With this structure, hygienists have room to grow and more opportunity to contribute to practice success. Once they understand the benefits, they’ll actually be happier with their earning potential, making them motivated to produce more and help grow the practice’s bottom line.

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Interested in speaking to Sally about your practice concerns? Email sallymck@mckenziemgmt.com
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