If you pay your hygienist a guaranteed salary, it could be hurting your practice.
Surprised? Think about it. While you know exactly how much you need to pay your hygienist each month and your hygienist knows how much to expect in every paycheck, this payment structure doesn't offer hygienists much incentive to improve their performance. They take home the same amount no matter how much, or how little, they produce each month.
Sally McKenzie, CEO of McKenzie Management.This limits earning potential, which likely leaves this important team member perfectly happy staying with the status quo -- especially if you also offer yearly raises regardless of performance.
Still seem fair? It's not, yet it's the payment structure most dentists use. Most dentists in my experience simply have no idea how much it can be hurting their practice; even when they find this out, they're often reluctant to change. Their hygienist is happy with the arrangement, after all, and they're afraid that this valued team member might start looking for another job if they try to change it.
Time for a change
I suggest you start treating your hygienist like a producer -- because that's what your hygienist is. Hygienists should earn no more than 33% of what they produce. They really should be put in the same category as associate dentists, who typically make 30% to 35% of their production.
Let me give you an example. Say your hygienist earns $40 an hour and works an eight-hour day. That comes to $320 a day. If your hygienist produces $960 a day, meeting the 33% of production benchmark, you're in good shape. The hygienist gets one-third in compensation, you can apply one-third to hygiene department expenses and the last third comes back to the practice as profit. Unfortunately, this isn't how it plays out in most offices.
Why? Many practices don't have a scheduling coordinator who is trained to schedule hygienists to produce at three times their salary. Putting minimal effort to the recall system is another factor that limits hygiene production. No one is responsible for getting hygiene patients in the chair, which means your hygienist can't produce. Now this isn't the hygienist's fault, but that doesn't change the fact that you're not meeting practice production goals. The worst part? You're also losing money, yet you still have to pay that guaranteed wage.
Don't ask your hygienist to dial for dollars
Many dentists think they can boost production numbers if they simply have their hygienist work the phones during down time. If you're nodding your head in agreement, think again. You don't want a team member who makes $40 an hour spending time on the phone. You want that team member producing.
Remember, you need to start thinking of your hygienist more like an associate than an employee. I'm guessing you'd never ask an associate to keep their schedule productive. The reality is, asking producers to help get patients in the chair doesn't increase your production numbers. It keeps them from producing, which is hurting your bottom line. Instead, empower another team member to revamp your recall system. Trust me, if you do, your hygiene production will grow.
A better payment structure
OK, so now you're convinced a guaranteed wage isn't the best payment structure for your hygienist, but you're probably wondering what is. I suggest considering paying hygienists a guaranteed base plus commission. They still get the base pay they want, plus they also have the opportunity to boost their salary. This gives them incentive to increase production numbers, which can only mean good things for your bottom line.
How to talk to your hygienist about the new payment structure
You are now likely worried about how your hygienist will react to the news that you're changing the payment structure. And you're right -- your hygienist might be resistant at first. It's important to take the time to explain the benefits of the new structure -- for both the hygienist and the practice. Your hygienist gets more earning potential, while the practice brings in more money.
When you're ready to hire a new hygienist, play up your guaranteed base plus commission payment structure in your advertising. This will attract candidates who understand the benefits of this model and who are willing to work hard to increase their salary.
It's time to grow your production numbers and your bottom line. One of the best ways to make that happen is to ensure hygienists produce three times their wage. Moving away from the guaranteed salary structure will get you there.
In my next column, I'll tell you about the benefits of the two-tiered hygiene salary structure, and why you might want to implement this payment method into your practice.
Sally McKenzie is CEO of McKenzie Management, which offers educational and management products available at www.mckenziemgmt.com. Contact her directly at 877-777-6151 or at [email protected].
Disclaimer: The comments in this article are not meant to be taken as financial advice. You always consult with a tax professional before making any significant changes in your financial or practice situation.
The comments and observations expressed herein do not necessarily reflect the opinions of DrBicuspid.com, nor should they be construed as an endorsement or admonishment of any particular idea, vendor, or organization.
