10.27.17 Issue #816 info@mckenziemgmt.com 1-877-777-6151 Forward This Newsletter

Grow Your Practice with a Two-Tier Hygiene Salary Structure
By Sally McKenzie, CEO

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Hygienists are producers. The more they produce, the more revenue they bring into the practice – which is why they shouldn’t be compensated with a guaranteed salary like other employees on your payroll.

If hygienists know exactly how much money they’re going to make each month, no matter how much or how little they produce, they have no reason to improve their performance. It really doesn’t matter if they meet their production goals or if they spend time calling patients on the past due list; they earn the same regardless. They even get paid when they attend CE courses or sit in on team meetings, both times when they’re clearly not producing.

When paid a guaranteed wage, your hygienist’s salary will likely start to creep above 33% of his/her production – which is the industry benchmark. That means your overhead goes up while revenues go down.

I know some dentists who opt to pay their hygienists a straight commission. It might seem like a better option, but it really isn’t. Not only do hygienists not care for this model (they don’t like not knowing how much they’ll get paid each month), it entices some to put quantity over quality so they can receive a larger paycheck. While this thankfully doesn’t happen often, it can lead to huge problems when it does and potentially cost your practice patients and damage your reputation.

All this can be avoided if you switch to a two-tier salary structure. Through this system, the hygienist receives a base pay plus commission. This gives hygienists the financial security they crave, along with the opportunity to increase their pay each month. Not only can they add to their base wage with a little hard work, their job becomes more rewarding – which shows in their interactions with patients. It also fosters loyalty to you and your practice.

Not quite convinced it’s time to make the switch? Here are a few more reasons I suggest you consider moving to a two-tier hygiene salary model:

Practice production and revenues will start to rise. When your hygienist knows that more money can be earned if production numbers increase, this will certainly provide motivation to go above and beyond that 33% benchmark. And every time your hygienist does increase production, he/she will get a bigger paycheck while the practice brings in more revenues.

Here’s an example of what this looks like. If Laura your hygienist works 10 days a month and is paid $300 a day, that’s $3000 a month. To meet her goals, she needs to produce $9000 a month. If she produces $10,000 one month, you could consider paying her a commission of 15% up to 33% on the $1000 she produced over her monthly goal. That’s a win/win for both the hygienist and the practice.

Salaries won’t get out of control. Hygienists who are on a two-tiered system are typically happy with their base pay and excited at the opportunity to earn more. They’re satisfied, and their salary won’t become a financial hardship on the practice. If you pay your hygienist a guaranteed salary, however, there’s plenty of opportunity for it to grow above the industry benchmark, including high cancellation and no-show rates, lack of a periodontal therapy program and a less than stellar recall system – sending overhead costs out of control and hurting your bottom line.

Determining raises becomes easier. With the two-tiered system, when your hygienist earns a raise, it’s easy to figure out what that raise should be. How, you ask? You base the bump in pay on a percentage increase on the commission, as long as it’s less than the 33% maximum.

Let’s look at how raises play out if you pay your hygienist a straight commission. With this scenario, your hygienist will get a bump in pay every time you implement a fee increase. This can be especially frustrating if the hygienist is underperforming or struggles to get to work on time. So even though the hygienist hasn’t exactly earned a raise, he/she gets one anyway, leaving no reason to improve performance – all while practice revenues take a hit.

You no longer have to worry about hygienists asking for a higher commission rate. This scenario plays out all the time. The hygienist, who’s paid straight commission and has been with the practice for years, asks the dentist to raise the commission rate, to the point where it exceeds 33%. The dentist ultimately gives in to keep the hygienist happy. Unfortunately, the hygienist stays happy while the business suffers.

With the two-tier system, this isn’t an issue. The structure is clear – the hygienist only gets more money if it’s earned, not simply because it’s been another year.

You want your team members to be successful, and for them to do their part to help the practice meet its full potential. A two-tier hygiene salary structure gives this important team member the opportunity to grow, while also contributing to practice success. Switching to this model will lead to happier, more fulfilled hygienists and a more robust bottom line.

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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