Dental Employee Compensation: Are You Paying the Right Amount?

Dentists who aren’t particularly business savvy and who don’t have a lot of experience running a practice can find determining staff compensation overwhelming.

In the DentistryIQ article “Dental practice compensation: How to do it right,” Sylvester Gonzalez, Director of Operations at Benevis Practice Services, an Atlanta-based Dental Service Organization, writes that it can be overwhelming to effectively manage dental team compensation, as it requires a careful review of finances, team member performance and comparable market salary data.

“Compensation is one of the highest controllable expenses of a dental practice,” Gonzalez writes. “Because financial and personnel skills aren’t usually taught in dental schools, it’s completely understandable why many dentists find these tasks somewhat daunting.”

To help dentists successfully manage practice compensation, Gonzalez gives four strategies.

1. Review profit growth

Gonzalez writes that in order to spend money, a practice needs to make money, which is why all compensation decisions must be based on the fiscal health of the practice.

He recommends to start by looking at annual revenue and profit growth. Staff raises and bonuses, he writes, should be based on overall practice revenue growth and increased profits. If the practice has no revenue or profit growth, Gonzalez recommends delaying raises.

“Many dentists feel obligated to give salary increases or bonuses, but doing so without any growth means they must likely take money out of their own pockets,” Gonzalez writes. “Team members should know upfront that raises or bonuses are dependent upon the practice meeting or exceeding projected revenue and profit goals.”

2. Evaluate competitive market compensation

The next thing to do, Gonzalez writes, is to look over what you’re paying your staff and make sure if it’s commensurate with market and industry standards. When they do this, many dentists learn they are actually overpaying or underpaying their staff.

Gonzales recommends routinely checking on market wage data and bonus practices for hygienists, dental assistants and front desk employees in your area because having these numbers will help establish appropriate compensation levels for both existing team members and new hires.

Reliable wage data is available from several online sources such as:

  • The American Dental Association
  • The Bureau of Labor Statistics

3. Gain employee buy-in

Employees perform better when they know they are valued and a vital part of the team.

Gonzalez writes that employees want transparency and a clear understanding of their compensation plan with no back-end surprises.

“Give employees the tools to help them perform their jobs well,” he writes. “Provide constructive feedback and coaching so they know how they’re doing. For the practice to reap rewards, everyone must do their best and work together.”

4. Develop a productive team

The first step in developing a productive, happy team is to realize that no employee is indispensable.

Sometimes, that employee deemed indispensable is one no one likes and are only motivated by pay increases because they are good at doing an important function for that practice.

“This situation causes dissatisfaction and tension within the team,” Gonzalez writes about indispensable employees.

To avoid this issue, Gonzalez suggests carefully detailing each team member’s job responsibilities, performance goals and expectations, along with requirements for positive attitudes and teamwork.

“All team members should do their jobs well and be positive team players,” he writes.

Putting strategies into practice

Once you do the above, complete Gonzales’ below action items to get the ball rolling on implementation.

  • Determine appropriate market pay scale for each position: Obtain a salary survey and establish salary bands. Salary bands are groupings of prevailing salary rates based upon employees’ or candidates’ level of experience. Determine entry-level, mid-career, and senior-level pay rates for each position. This valuable information guides dentists’ hiring and raise decisions.
  • Develop comprehensive job descriptions for each position: Think through each position’s duties and responsibilities. A good job description concisely explains required skills, duties, education level, and hours, so employees or candidates understand the position. The description should also include a synopsis of expected employee behavior. Be as accurate as possible so that employees know what to realistically expect. It’s up to the dentist to make sure employees do their jobs well. That’s why it’s important to be as specific as possible about all job responsibilities.
  • Explain the compensation process to your team: Answer questions and always be transparent. It’s essential that team members thoroughly understand their job responsibilities and expectations. Meet individually with team members to ensure their understanding of the compensation plan and expectations. Take time to answer questions. This process will pay handsome dividends in the long run.
  • Ensure team accountability based on responsibilities and performance standards: Don’t wait for year-end to inform your employees how they’re doing. Establish regular constructive feedback and coaching to improve performance with frequent reviews and evaluations. Your team will appreciate it! If an employee’s performance is not meeting expectations and the dentist doesn’t address it or provide help, there’s only one person to blame—the dentist.
  • Review revenue, team performance, and potential raises at fiscal or year-end:Determine top performers based on clearly communicated standards and reward them first. Next, look at employees who didn’t meet expectations and consider alternative options, that is, provide development or look for new talent. Have formal reviews with team members to discuss their performances versus expectations, and provide feedback about things done well and areas for improvement. Explain how decisions were made and always reward based on established standards. If possible, complete the review process at the same time every year. It sets a rhythm for you, the team, and the practice.

Katie Devereaux

Resume Coach and Blogger at Dental Temps Professional Services
Katie Devereaux is a writer and editor, who graduated from the University of Florida with a Bachelor’s Degree in journalism. She has written for several publications in Florida, Alaska and Illinois.
Katie Devereaux

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About Katie Devereaux

Katie Devereaux is a writer and editor, who graduated from the University of Florida with a Bachelor’s Degree in journalism. She has written for several publications in Florida, Alaska and Illinois.