November 14, 2022
How to Handle Higher Staffing Expenses at Your Dental Practice
As if finding and retaining quality staff isn’t hard enough, now dentists are facing the ever-growing issue of higher costs associated with staffing expenses. But how do you continue to increase practice production while paying staff more as a result of this structural shift? With the help of Professional Transition Strategies Senior Business Valuation Specialist Jennifer Sims, CPA, we share how to strike a balance between higher dental staff expenses and your bottom line.
More money invested in team member compensation now needs to translate into increased levels of performance … right? Not necessarily. Avoid paying more for the same level of work by first setting out a plan and communicating goals to your staff. Yes, there are ways to cut costs, but a better long-term plan could mean offering more training opportunities for dental assistants or encouraging continuing education classes for front office staff.
Consider compensation packages when hiring new employees or giving raises to existing ones to keep them. Dentists should consider base pay with a production bonus system or non-cash incentives/compensation so the employee has an opportunity to earn more and is incentivized to do so. If salaries continue to increase or stay at a higher level and production/collections don’t increase, earnings before interest, taxes, depreciation and amortization (EBITDA) and valuations will decrease.
To get the most return on your investment, dentists should plan to operate a minimum of two treatment rooms, both producing at equal levels. The way to do this is to focus solely on diagnostic and treatment procedures while leaving the rest to dental assistants. It’s a win-win since it empowers your dental assistants to increase their skill sets while enabling your practice to increase its total production. However, this can be easier said than done since dental assistants who are unmotivated can just go to another higher-paying dental practice.
Higher staff performance isn’t limited to those doing the procedures. Work with front office staff to accelerate the overall schedule of your practice. As overhead costs rise, production and revenue must keep pace. More efficient scheduling — perhaps through the use of cloud-based dental practice management software — leads to better use of the dentist’s time. What’s more, focus on recall and solid treatment planning so patients are getting the care they need and dentists are getting good production from their patients with necessary treatment, and even consider outsourcing certain work and procedures. This can all result in offsetting higher costs and increased profitability year over year.
Contact the experts at Professional Transition Strategies for more ways to keep your dental practice profitable leading up to a potential transition of ownership.