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

Why Guaranteed Hygiene Salaries Donít 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
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