03.06.09 Issue #365 Forward This Newsletter To A Colleague

Hygiene Salaries Holding Their Own, So Far
by Sally McKenzie CEO
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The stock market may be tumbling, gold prices may be soaring, but hygiene salaries appear to be steady or increasing in spite of the economic woes of the nation. RDH Magazine’s annual salary survey results were recently released, and California and Washington rank #1 and #2 on the pay scale once again. Illinois, however, has dropped out of its third place position, and Alaska, which didn’t even make the top 15 paying states last year, moved in. The 2008 top 15 states for hygiene hourly rates are:

  • California $48.68 Washington $46.37
  • Alaska $41.94
  • Nevada $41.25
  • Arizona $39.67
  • Connecticut $39.53
  • Maryland $38.82
  • Colorado $38.00
  • New Jersey $38.00
  • Massachusetts $37.73
  • Virginia $37.73
  • Hawaii $37.00
  • Oregon $36.95
  • Illinois $36.00
  • Idaho $35.75

The lowest paying state is Alabama. The states rounding out the bottom five on the hourly pay scale are:

  • Alabama $18.26
  • Mississippi $21.50
  • Kentucky $27.00
  • Maine $28.15
  • Michigan $29.18

RDH reports that the average hourly rate in the majority of states (35) is between $30 and $39.

As for the economy and how responding hygienists rated the financial health of the practices in which they work, 50% reported that business is good but has slowed down somewhat. Another 34% reported that not only is business good, schedules are always full. However, 14% reported that their practice owners are very concerned about revenues, and 2% said the practice’s financial health is weak but the doctor is not concerned. Survey results were collected from August into November 2008. Although the economy has been suffering over the past several months, it is interesting to note that some 84% of practices appear to be maintaining “good business.”

Of those hygienists responding, just over 50% reported that they had received a raise in the last 12 months. However, 52% reported dissatisfaction with the intervals at which raises are given, which is an increase of 12% over last year.

Certainly, compensation is one of the most emotional and challenging issues practices face. Nonetheless, salaries should be reviewed annually. I wouldn’t encourage practice owners to forego salary hikes unless they have to, but pay should never be increased—no matter what the economic condition of the country—until a Salary Review is conducted. This mathematical tool enables practices to quickly and clearly determine how much of a raise they can afford while keeping total salary overhead in line with the industry.

In addition, remember that raises must be based on individual ability or achievement. This is the most effective compensation system because it is contingent upon demonstrated results. Moreover, it enables every team member to understand that individual job success equates to practice success, which is linked to increased compensation.

Employee salaries should account for no more than 22% of total overhead, not including employee benefits, which will run an additional 3–5%, or the doctor’s compensation. For example, if your staff salaries for January are $14,300 and your average monthly collections are $65,000, you are within the recommended industry range of 19–22% of monthly collections (albeit at the top of the recommended range).

Spell out exactly how the compensation system works in the practice, what is available, what formulas are used, what it takes to earn more money and how much more an employee can earn in a position. Employees must understand how compensation is established, including benefits, bonuses, special perks and their role in influencing their pay. Once you have an established system, follow it. As one hygienist reported in the survey, “Annual increases are based on increased production, [but we] always have to ask; they are never just offered.” Don’t make compensation promises you don’t intend to keep.

Next week, is hygiene pay outpacing hygiene production?

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

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