Staff is asking for a cost of living increase. When do I know I can afford to give one?

Cost of living raises were started by the large corporations as an easy way to keep a large number of employees 'happy' with small 'raises' rather than what the employees might have received (or not received) based on their performance during the previous twelve months.

To consider giving a raise, employers must ask themselves the following two questions:

1. Has the employee given 110% of themselves within the time frame the employer is considering? Have they surpassed your expectations in using their skills and the learning of new skills? Are they a team member who is actively contributing to the success of the practice?
2. To ensure that a practice utilizing a Bonus and Incentive program maintains stability in the practice growth, and does not disturb the overhead percentage allocated for payroll, it is essential to check the financial reports for the past six months.

If the team has consistently received a monthly bonus for 5 months, rewarding a raise at this time will not disturb the overhead percentage allocated for payroll.

Some months, my hygienist takes home more money than I do. How do I make sure that my hygiene wages are fair and still meet my personal/family financial needs?

This is a common complaint with owners of a young practice (less than 7 years old) though it can and does happen in established practices as well. The formula to follow is Hygiene wages should be 30/40% of hygiene net production. We find most practices fall in the 33-35% range.

To determine a fair and competitive percentage for your practice, it is essential you take into account how the following three criteria will impact the equation:

1. Location of practice: West Coast, Midwest, East Coast, International, etc.
2. Availability of hygienists. Are hygienists hard to come by, or is there an over abundance of hygienists in your area?
3. Do you offer benefits?

Practice in California? It is sadly quite normal to see hygiene wages closer to 50%!

Practice outside California? When hygiene wages are higher than 35%, you’ll need to work toward bringing the hygiene overhead in line.

Recommendation: Review following criteria to start reducing hygiene overhead:

1. Do you have a daily production goal for hygiene?
2. Do you have a plan in place on how to structure the day in order to reach the goal?
3. What percentage of hygiene appointments are perio related? Standard of care indicates for most practices, 40% of all hygiene patients are in some type of perio treatment.
4. Do hygiene fees actually reflect quality of service provided by the hygienist and practice?
5. Is prescribed restorative treatment being reviewed during every hygiene appointment?

I bought a practice where the previous owner carried balances for the patients. How do I stop being the bank for my patients without offending them?

You did not mention how long ago you purchased the practice. If, within the last 12 months, take things very slowly until the first year is up. We need you to meet the majority of your patients and establish a relationship with them before making any radical changes. After the first year is the time to make any necessary changes. Assuming the changes in financial policies will be integrated with upgrades in the facility, equipment, décor and an expansion of dental service, I believe the vast majority of patients, if they have accepted you, will accept the changes and your concern regarding carrying a balance.

What a wonderful time to implement a patient financing program. However, if the previous dentist has been lending money for free, then the practice will need to implement finance charges to make an interest free patient financing program an outstanding benefit to patients.