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VIDEO - DUwHF #894 - Paul Edwards
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AUDIO - DUwHF #894 - Paul Edwards
Paul Edwards is the CEO and co-founder of CEDR HR Solutions, a leading provider of custom employee handbooks and on-demand HR support for dental practices of all sizes and specialties across the United States.
With over 25 years of experience as a manager and business owner, Paul is well-known throughout the dental community for his expertise in the HR issues that impact dental practice owners and managers. He specializes in helping dentists successfully handle employee issues and safely navigate the complex and ever-changing employment and labor law landscape.
Paul is the author of HR Base Camp, a blog and podcast channel for dentists and healthcare providers. He is also a featured writer for The Profitable Dentist, Dentistry IQ and Dentaltown, and regularly speaks at dental seminars, conferences and CE courses across the country, including the Greater New York Dental Meeting, Yankee Dental Conference, DOCS Education, AADOM and more.
www.cedrsolutions.com
Howard: It is just a huge honor today to be podcast interviewing my buddy for years, Paul Edwards.
Paul: Hi, Howard.
Howard: Thank you so much. I live in Phoenix and he lives 90 miles south to Tucson.
Paul: Yeah, yep.
Howard: You're about ... what are you, about 2 hours from the Mexican border?
Paul: We're about 10 hours ... we're about 10 degrees below Phoenix, is what I like to say in temperature.
Howard: Oh, in temperature 10 degrees?
Paul: Yeah, so a couple hours ... yeah, a couple of hours away from the border.
Howard: Oh, my god, I love that area there.
Paul: It's gorgeous.
Howard: And by the time you get to the Mexican border, it's a mile high.
Paul: It is and it's much cooler and it's just gorgeous.
Howard: Oh, my god.
Paul: Yep.
Howard: I got to tell you about that. But tell me, you probably already know him because he's done 3 continuing education courses for us and he has, you know, like, 2 000 posts on Dentaltown. His CE "From ordinary to extraordinary. How to create a self-managing team" filmed live at the Townie meeting in 2017. That was an amazing course. His other course was "Handbooks and policies. What every employer needs to know". He did that about a year ago. That is priceless. And the third one "The devil's in the details. How your office policies can help you or cost you". And that was recorded live at the Townie meeting in 2015. He's the CEO and co-founder of CEDR HR Solutions. I call it 'Cedar'. Do you?
Paul: It's 'Cedar', yeah.
Howard: 'Cedar' HR Solutions, a leading provider of custom employee handbooks and on-demand HR support for dental practices of all sizes and specialists across the United States. For listeners around the world, HR is Human Relations. You only manage 3 things: people, time and money - it's the people. With over 25 years of experience as a manager and business owner, Paul is well-known throughout the dental community for his expertise in the HR issues that impact dental practice owners and managers. He specializes in helping dentists successfully handle employee issues and safely navigate the complex and ever-changing employment and labor law landscape. Paul is the author of HR Base Camp, a blog and podcast channel for dentists and healthcare providers. He's also a featured writer for 'The Profitable Dentist', 'Dentistry IQ' and Dentaltown, and regularly speaks at dental seminars, conferences and CE courses across the country, including the Greater New York Dental Meeting, Yankee Dental Conference, DOCS Education, AADMO and more. And what I want to ... the reason I asked Paul to drive an hour and a half this morning, is because you young kids that just started your own dental office, you got to stop and think at least once a day: America has 1 million attorneys and they're the ones in Congress that write all the laws and they're fed ... their total revenue is about a trillion Dollars. So, when you look at the United States economy of 19 trillion, a trillion goes just to feed the lawyers. And dentists, they don't have HR manuals and they think everything's cool and a handshake and whatever, until they fire some employee. Then they realize that they're going to go find some attorney and that attorney wants to make more than a dentist and then they get in trouble. It's a brutal world out there.
Paul: It is, and I think, Howard, it changed about 10 years ago when we had a little bit of a meltdown in the economy. And I think a lot of attorneys ...
Howard: You talking about 2008? Or the one ...?
Paul: I don't think 2008 is the ...
Howard: Or are you talking about the one next year in 2018?!
Paul: Well, I can't quite predict that far ahead, but ...
Howard: Well, how old are you, Paul?
Paul: I'm 56.
Howard: So, I'm 55.
Paul: Yeah.
Howard: And you recognize patterns.
Paul: You do.
Howard: It seems like about every 10 years of my lifetime ...
Paul: Mine too.
Howard: I mean ...
Paul: It's been the same way.
Howard: I mean, it's like I don't care what any of the numbers say, I don't care what inflation, Wall Street, whatever.
Paul: Yep.
Howard: And the reason it's cyclical, the greatest economists I ever read on the issue is because, at the end of the day, humans are emotional, imperfect animals. So, I buy a house for a rental property and it doubles in value.
Paul: Yup.
Howard: And then you say, "Damn, look what Howard did! I want to buy a house. I'm going to jump in there." And then your friend ... then everybody jumps in.
Paul: Yeah.
Howard: And then it's a bubble, and then it pops.
Paul: Yup.
Howard: And the only way you could get rid of the cycles is if you had artificial intelligence making all of your business decisions in stocks and bonds and real estate. So, as long as the homosapien, emotional animal is making the business decisions, you have the cycle.
Paul: I think so.
Howard: And I've seen it every 10 years.
Paul: I have to. I have just ... I mean, I just remember coming out of college and it just ... you just kind of watched the cycle come through and it seems like there's always some event, you know, that that triggers it each decade or so, and in this last one it was that bubble, I mean, and we saw a lot of people ... we saw, at that time we were just really getting CEDR started in 2006, 2007. And our conversation had to be ... for the first 3 or 4 years ... had to be about how to lay people off, and how to do it the right way, and how to keep your team intact, and, you know, it's really an emotional thing because our employees - they're a human resource, they're human, they're a part of our team. And if you want to ...
Howard: Right, right. Ryan and I know a very close friend who had a construction company in 2008. He had 325 employees and they laid them all off for 50, and his wife said he just walked around crying for a week.
Paul: Yeah. Well, it's one thing ...
Howard: 'Cause the people had been with him for 20, 30 years.
Paul: I mean, you know, you and I have always ... I think anybody who's listening to this has experienced hiring somebody that it was, kind of, a mistake and it's pretty easy to get rid of that person because it was a mistake. It's not a fit, it's not the right thing. It's another thing when you're going through an economic downturn and people are being let go simply because of economic reasons, it's not something they did or didn't do. It was hard and it's, you know, a lot of those calls in that first 3 or 4 years were a lot like the calls I take when we've discovered there's embezzlement or something going on. I mean, the doctor almost needs therapy. You know, you're a therapist over the phone. You're just saying, you know, "You're not a bad guy. You haven't done anything wrong here. I know this is this is hard on you." So, yeah ...
Howard: And, it's so emotional, I mean. I know patients in the last 3 years where they ... when they were at work, their home was invaded, they dumped all the drawers.
Paul: Yeah.
Howard: The wife couldn't live in the house anymore.
Paul: It is. It is indeed.
Howard: She felt violated and they'd gone through her drawers and she just could not go in that house.
Paul: Well, I just think all this highlights how human it is to be an employer. It's hard to separate that ... I don't know, I mean, it's almost a parental feeling. You spend more time with the people at work than you do with your own family.
Howard: Yeah.
Paul: You develop relationships. I mean, we do a lot of associate work, associate agreements and coaching and doing those agreements and that's a big part of it. When I'm speaking with the doctors as, you know, even in that thing we frame it as 'this is a marriage you are about to enter into with this person'. The difference is that you get to do some negotiating this time. When you bring up your agreement, your prenup in effect, you know, you don't get that look that you get from your future wife.
Howard: Well, prenup is another classic example of the business cycle, because you're in love and it's romantic and you don't want to make it ugly and get a lawyer and get a prenup, knowing full well that half the marriages fail, and the rich dentist is going to be paying the stay-at-home spouse.
Paul: That's true.
Howard: And it's girls and boys.
Paul: Yeah.
Howard: I know a female dentist my age and she's just livid that when she married her husband, he decided to quit the job and help raise the 2 girls, and, my gOd, 10 years later was that so ...
Paul: Yeah.
Howard: Was that the worst financial decision she ever made. I mean, she had to support that guy for a decade.
Paul: So, it's kind of like of an employee handbook. It's the same kind of thing. It's, I guess, I never really thought of it like a prenup, but I think in a lot of ways it kind of defines things and it sets things out ahead. And, I think a lot of people look at employee handbooks like there are these constraints or these, you know, you're putting in these rules and when you put this document in, you're telling your employees, I don't trust you, or, you know, we need these policies in place for some reason. And, I think that's hard for some dentists to, kind of, get past.
Howard: So, your website is CEDRSolutions.com.
Paul: Correct.
Howard: I wanted to talk to you. Number 1: what percent ... you've been in this a long time ... what percent of my homies do you think have an HR manager?
Paul: I think almost ... I would say probably 95 percent of the dental offices we speak to out there, if not more, have a - I'm air quoting for people listening to this, for people watching here's the air quote, I'm air quoting - "an employee handbook".
Howard: Well, I'm proud of you guys.
Paul: Yeah, yeah.
Howard: I would ... what would that have been 10 years ago?
Paul: 10 years ago it was probably a little bit less than that. I think that the qualification I want to make out there is that most of them have this homemade book, you know, this thing that they've put together. And that's what you do. I mean, you get into a business - Howard, you remember, you probably still have to do it every now and then - you're like, "Wow, some things around here aren't going quite like I want them to go, and we probably should make a rule up about this.
Howard: Well, it's funny because people will act all sometimes sad or depressed and they talk to you and they say, "I'm having some staff issues." I'm like, "Dude, who doesn't have any?" I mean, look at the Arizona Cardinals. Are they having any staff issues?
Paul: I know. I know.
Howard: Their running back just fell on his damn wrist and might be out half the season. I mean, name ... look at Uber. You think, well, they're worth 75 billion Dollars. Yeah, they just had to fire their CEO on sexual harassment ...
Paul: Yeah.
Howard: I mean ...
Paul: Google just had a major lawsuit filed against them just a couple of days ago.
Howard: The girls?
Paul: Yeah, because of the disparity in pay.
Howard: And they say ... and the lawyers say it's structural.
Paul: Yeah.
Howard: Only one third of Google employees are women.
Paul: Yeah.
Howard: And they're showing how they make less across the board.
Paul: And you know what, Howard, I just want to point something out. You said structural, and that's one of the important things, is that it's easy to pick up structural issues inside of any kind of company and attack it. So, for instance, you have someone - and we see this on Dentaltown all time – “I'm having trouble with this employee. I think she's, you know, she's always late”, and everyone's like, well, just focus on her and, you know, your in and out will state you can fire her, just go after her and do these things, and then, you know, when you get down to the nitty gritty of it, there's usually something else behind it. You know, she just came back from maternity leave or, you know, there's some other mitigating factor going on there. And so, I think it's easy to overlook all those mitigating factors when you look at something like that and just say, well, you can just let this person go. Because structurally, I can look at all of your time cards, if I'm an attorney and I'm coming after you, I can look at all your time cards and I can quickly show that you have lots of employees who are late over the last 6 months, but you picked that employ to begin to enforce and do the 'gotcha' with. And so, it's not always so simple as just enforce your rules.
Howard: And a lot of it's the ... I mean, you know, the Mafia always said, "The fish rots from the head down."
Paul: Yeah.
Howard: And the corporate culture comes from the head.
Paul: Oh, wow, yeah.
Howard: The dentists are all mad 'cause the assistants come in late. You know how many offices the dentist is the last person to get to the office and the first one to leave?
Paul: Yeah.
Howard: Do you know how many? And then a lot of them don't think it's fair, like, the dentist will take 3 personal phone calls from his wife all day long, but you can't have a personal phone call.
Paul: Right.
Howard: And she's like, "I can't even concentrate on making a temporary because I don't even know if my kid got dropped off."
Paul: Right.
Howard: So, if it's good for the goose, it's good for the gander. But why, what plausible reason could there be that Google's employees are only a third women versus half, and that across the board ...
Paul: It's systematic. It is. It is the argument that's being made out there in the world. It starts back with Lilly Ledbetter in 2007. Lilly Ledbetter worked for Goodyear for over 20 years. She, on her way out, on her retirement ... I think maybe she'd even been there for 30 years ... on her way out the door, someone basically slipped a note and said, "Lily, there are men being hired here today who are starting at a higher rate of pay, doing the same job you've been doing for 30 years." And I'm paraphrasing how that came about. When they looked into it, lo and behold that's exactly what was going on in Goodyear. It's just systematic. As the men were coming in, they were getting paid more than the women. And even so much so that a woman with 30 years wasn't getting paid as much as a brand new graduate coming in with an MBA. And so, Lilly Ledbetter sued, and the Supreme Court said, look, the way the laws are written right now, you would have had to have discovered that issue within ... I think it was 180 days of the first time that it happened. So, at some point in her early career they discriminated against Lilly, if you look at the definition of discrimination in pay, and she didn't pick it up and the way the statutes are written is that she didn't have any recourse. And they actually changed the law to make it so it would be at the time of discovery, so that when she found it out 30 years later, she could actually do something about it.
Howard: Now, you lot, that was a bad story about Goodyear.
Paul: Uh-huh!
Howard: So, since Mr. Goodyear is my favorite guy in the world, I've got to do a good story. You know why he's ...?
Paul: Please.
Howard: You know why he's my favorite guy in the world?
Paul: Why?
Howard: 'Cause we got a city out here called Goodyear.
Paul: Uh-huh, yeah.
Howard: Do you ... what do you know Goodyear for?
Paul: I know Goodyear, obviously, for what I think most people do - for tires.
Howard: Tire's.
Paul: Yeah.
Howard: So, what he did, he was a chemist and he learned how to vulcanize rubber.
Paul: Yeah.
Howard: And the first application was a denture franchise across America.
Paul: No kidding!
Howard: So, you'd bring in your ill-fitting, wooden, horrible dentures. He would vulcanize this rubber, pour it in there molten, but it wouldn't burn you ...
Paul: Uh-huh.
Howard: But seat it, it would cool, and you had a suction denture.
Paul: Uh-huh.
Howard: George Washington would have given away his farm for this.
Paul: For this, yeah.
Howard: And it was so amazing that he set up franchises all across America. And people would get on horse and buggies for two weeks to go get a Goodyear vulcanized rubber denture.
Paul: What made him think of doing it for dentures?
Howard: So ...
Paul: Was he a dentist?
Howard: He was a dentist. So, I don't know if he was a dentist 'cause back ... G.V. Black, the father of modern dentistry, didn't even go to dental school.
Paul: Right, right.
Howard: They were apprenticed back then.
Paul: Yeah, yeah.
Howard: And then he was, towards the end of his career, I think he was about, like, 60 and this man - I don't know if you've ever heard of him before, Henry Ford?
Paul: Yeah, I've heard of him.
Howard: Called him up and said, "Can you put a layer of vulcanized rubber around that wooden and metal rim?”
Paul: Uh-huh.
Howard: And then I think he ordered 10 million tires …
Paul: Wow!
Howard: … from Mr. Goodyear. So, everybody knows him for the dentures, so we contacted Goodyear - the CEO of Goodyear.
Paul: Yeah.
Howard: And I told this lady there about this story - about you can't have a city of Goodyear ...
Paul: And not know this story.
Howard: ... and she thought, “That is so darn cool.” So, at the Goodyear City municipal, they actually contacted the dental society and they are gathering things ...
Paul: No kidding!
Howard: ... trying to get the vulcanized rubber thing, because that was just an incredibly, amazing story. Dentists invented cotton candy. I mean, they've invented a whole ... they've been very entrepreneurial.
Paul: Yeah.
Howard: I mean, anybody who goes to 8 years of college to learn how to help someone get out of pain is thinking about how ... what the customer needs.
Paul: Yeah.
Howard: And that's the basis of business.
Paul: Yeah.
Howard: Dentists are like, "Well, what's wrong?" You know, they're getting to the point. Well, what's business? Not "I'm making something and I'm going to shove it down your throat!" They're like, "What does that guy need? What is his problem?" And they solve it.
Paul: Well, Howard, I think amongst ... while we're talking about entrepreneurs - and it's one of the things that I love about working with dentists - and we work across medical: we have acupuncturists, chiropractors, I mean, we have, you know, we work across that entire industry. About 85 percent of our clients are dentists and that's ... when someone says, "Well, what's the difference between a doctor, you know, an M.D., and a dentist? Is there any difference between the two?" And I just say, "Most dentists are entrepreneurs." And a lot of them are even torn between how much they love the mechanical model nature of what it is they do of fixing people and looking in and doing that thing - are torn between that and actually the management, the growing of their business, the entrepreneurial side of it. And that, for me, just personally gets me excited working with dentists.
Howard: Yeah, I ... so, I've been out here 30 years this Thursday and, like, I'm hard on my homies, but Vince Lombardi was hard on his players. I mean, you can't win a Super Bowl if someone's going to sugarcoat everything! So, that's why I call it 'Dentistry Uncensored'. I'm pretty brutal to the people I love the most.
Paul: Right.
Howard: But the thing is dentists and vets and chiropractors are a league ahead of physicians; like only ... in Ahwatukee, only physicians' offices still have the glass wall.
Paul: Right.
Howard: You go there, you knock, then they slide you the card.
Paul: Uh-huh.
Howard: If you go - and I've done this; I've gone to every single dental website in Ahwatukee, and I've gone to every single M.D. At least 80 percent of the M.Ds don't even have an email on their website or a contact form.
Paul: Yes, because they don't want you to get in touch with them.
Howard: It's like, "Here's the phone number and here's the address." It's like, how lame are you? So, dentists in Phoenix are all in retail, visible locations. The physicians, you know, by time you find your dermatologist for the first time, you're like, "Who the sh*t picked this location?"
Paul: Yeah.
Howard: And then, when you go back the second time, you're like, "What street was it I turned down?" and " Where is it? All these buildings look the same!"
Paul: Yeah.
Howard: So, yeah, dentists just crush physicians. I mean, if you think your office is not up to par, just go visit your doctor.
Paul: Oh, pretty much.
Howard: They're pathetic.
Paul: I agree.
Howard: But I wanted to get you in here. You are so in touch with the dental community in H.R. I wanted to talk about what you're seeing in the field. What issues are you solving? Now, obviously you're a problem solver. What issues? They're commuting to work. What issues are you seeing out there that you might be discussing and she's driving to work thinking, "Oh, damn!"
Paul: Oh, damn, yeah. Okay, so, first, Howard, we have the ... when we built our model, we build what I missed as an entrepreneur - which was having a solution center, somebody could call and talk to about my employee issues. So, we have one of those. It takes over 10,000 calls from our members every year. So, we do get all those issues. You know ...
Howard: 10,000 H.R. calls a year?!
Paul: Over 10,000 H.R. calls a year! This year we're on track to do almost 13,000. And they're from the most simple thing to the most complicated, and it's very, very interesting. I will tell you, the biggest trend over the last 2 months - and this isn't all that sexy - but Apple watches are showing up on all the employees' wrists now. And so, that's the biggest complaint that we're getting: is that the Apple watches are very distracting, and they want to create a policy around that issue. That's one of the biggest ones. You know, the other issues that come in that I think all of us face at some point. You know, you feel like your team is not engaged. You have high turnover. You have ... you know, the other thing about dentists, Howard, is they're so empathetic, you know, with what you do and, I mean, you work in someone's mouth, you know, unlike a surgeon who's knocked you out and he's digging away, and you're fixing something. You know, when you're a dentist, you got somebody awake in front of you. Well, not if it's me, because I'm doing oral sedation even to get my teeth cleaned! But it is that you are so empathetic that, when you have trouble with employees, you ... and you're like, "You know, I have to get rid of this person." The next thing you think immediately is, how it's going to impact them personally and their family.
Howard: So, they're driving to work, and they can't take notes. A lot of them follow me at @HowardFarran. I just re-tweeted your last 2 tweets @C-E-D-R-Solutions. CEDR Solutions. C-E-D-R-Solutions. One was "Not following HIPPA requirements just cost one practice 2.5 million Dollars".
Paul: Yeah.
Howard: "Can your company afford a HIPPA breach?". The other one "Does your practice have outdated policies, unlawful pay practices? Fix these dangerous compliances now." And we just re-tweeted that to our 23,000 homies. Thank you so much for following me on Twitter.
Paul: Thanks, Howard.
Howard: That's a big compliment. But, back to when you said these people call you, that means they're already a member or a client?
Paul: Yeah, yup.
Howard: What does that cost? How do you become a client so that when you have an H.R. issue ... because the reason Dentaltown was so successful was because the internet connected ...
Paul: Helped.
Howard: It was 1 in 2,000. They were lonely.
Paul: Yeah.
Howard: And with Dentaltown, no-one has to practice solo again. So, a lot of dentists wear so many hats, I think that'd be amazing that when you're thinking about this, to be able to call a professional who's here and around.
Paul: Yeah.
Howard: What does it cost to be a member and all that?
Paul: You know, if you're a practice with say, I think, you know, 1 to 10 employees or so, you're looking at about $149 a month.
Howard: 149 a month.
Paul: It's unlimited access to us. We promise to reply within a day.
Howard: But 149 a month.
Paul: Uh-huh.
Howard: Now, so, does a member ... what, do they still need to buy a manual from you?
Paul: They do. They pay for a manual, which is about ... I mean, since we're talking about it, Howard - it's about 2,500 bucks and they're getting a manual which is actually made for them. So, it's not a template. Although we work off our own templates, because, you know, some things don't have to be changed.
Howard: Well, it can't really be a template because aren't the laws in California different than Arizona?
Paul: Look, the laws - there are 7 different jurisdictions in New Jersey that passed 7 different paid sick leave laws, all of them carrying severe penalties. So, you couldn't possibly put the same handbook in place there. But, yes, the handbooks are different everywhere. If I could do one template, it would be amazing!
Howard: But you can't really scale a legal deal.
Paul: No, and I really have to tell you, I abhor the "Here's a Microsoft Word document. Here, take it. It's close already. Now, you work on it and then you go show it to your attorney." I don't like that model. I mean, it's kind of like you giving me the tools I need to work on something that's going on in my mouth, leaving me in a room with them and a mirror, and maybe even an assistant that knows a little bit about it, and saying, "That's all you need." I mean, it's ...
Howard: Yeah, it's like when dentists tell me about these tax shelters, I always tell them, I say, "You know, everything is tax deductible."
Paul: Yeah.
Howard: Until you get audited.
Paul: Until it's not.
Howard: And they you're going to go to the IRS Court. You're going to find out they don't have juries of your peers.
Paul: No.
Howard: It's going to be you, the IRS judge and you're going to get spanked really, really hard.
Paul: And it's a tough way to get an education.
Howard: Yeah.
Paul: And it's what entrepreneurs do. We all do it. We all start by, "I'm going to put up my ... I'm going to build my own website. I'm going to ..." I mean, how many things have you started building, Howard, and you're like, "I want that, and I need it for my business!", and you start off on that path? And I think the handbook just is a natural thing that people ... it's a natural trap that they fall into.
Howard: Isn't it funny how when Congress passes all these laws, you know, it doesn't apply to them and their employees?
Paul: It's amazing.
Howard: You know, the overtime. And then, when it comes to their getting money, the IRS, they decided to remove the jury system.
Paul: Yeah.
Howard: You know what I mean?
Paul: I know.
Howard: It's like, it's like government plays by these rules and the little people play by these rules! But on that ...
Paul: I just ...
Howard: ... on that $2,500 H.R. manual ...
Paul: Yeah.
Howard: What is the average size of someone getting spanked by an employee in an H.R. issue in a court of law?
Paul: Oh, man, if you go ... if you've got ... if someone's got any kind of legs underneath what they've got going on - and remember, 99.9 percent of all lawsuits never make it to court - they are always settled, they never get into court. So, that's what they're shooting for. So, they're actually picking a number that you can obtain, to get yourself ... to extract yourself out of this, and it's really ... it's a little infuriating, but it's a math problem; and you sit down with your attorney and your attorney says, "Well, we could probably win this if we fight it. But if we do fight it, my fees are going to be about this much. If we fight it and we lose, they're going to win about this much and then you're going to have to pay that attorney's fees." And so, everybody's just doing the math. The average, Howard, it's generally 25 to 35 thousand Dollars - and that's if you just ... it's like, you know, it's a flesh wound. You know, just ... you're just barely ... they barely nick you. Easily, we see these lawsuits skyrocket into the 60, 70; and, of course, we've seen them in the quarter of a million and higher.
Howard: Yeah.
Paul: But the realistic number is 25 to 30 grand.
Howard: And the average trial in Arizona is about 40 grand.
Paul: Yep.
Howard: And then go miss work. Let's say you produce $5,000 a day, and you miss ...
Paul: Time suck, yeah.
Howard: Last time I went to jury duty ... you know, I always go to jury duty ...
Paul: Yeah, me too.
Howard: ... but you always get out by noon and you come back after lunch and you get out and right as I was ... it was like 15 minutes til I got to leave.
Paul: Yeah.
Howard: Howard Farran.
Paul: Howard Farran.
Howard: Served three weeks at the trial, and they give you this per diem deal - I think it was something like $12 a day.
Paul: Yeah, yeah. It's truly service.
Howard: It's like 3 weeks at $12 a day. I think that didn't cover the gas to and from downtown! I mean, it was ...
Paul: Or the parking. Yeah, yeah.
Howard: Yeah. But that was, man, that was ... you know, I went in there with a positive attitude. I said, “Well, come on, you've never seen a court trial. You've see them on TV, that's all, TV”.
Paul: Yeah.
Howard: Oh, my god, is that a brutal process!
Paul: It is brutal. It is a brutal process, and if you get sucked into it - even if you don't end up in court - you and your managers, it's such a time suck. It just takes all ... it just takes the wind out of you. If you have any momentum going, forget what you're up to when that comes in. And look for it to last about a year and a half.
Howard: And it's the same thing, these dentists, you know ... I think that people like us, like myself, who stayed out of courts and boards and all that stuff, is when Grandma wants her money back, give her money back. What's the alternative? She files a claim against the Board.
Paul: I know.
Howard: And then you have to cancel a day and you got to go down to the Board. Then you've got to hire your local dental attorney, Jeffrey Tanner, and you're doing all that and you go through all that and she lives 6 blocks from your office. How is she going to talk about you ...
Paul: I know.
Howard: ... at church and the grocery store for the rest of her life? I mean, Walmart, you can take a sleeping bag back with dirt all over it ...
Paul: Right.
Howard: ... and a tear and they're just like, they take it back.
Paul: They take it back.
Howard: It's like 1 percent. 1 percent returns. And I look at the dentists, they're going all crazy over some stupid root canal, crown, whatever.
Paul: Yeah.
Howard: It's like, were your refunds last year 1 percent? That's what Walmart does, and you should bench yourself off the very biggest and the best of the Fortune 500.
Paul: We do. We do that too, Howard. I mean, if you're not happy, we just ... we want to quickly get you your money back. I mean, that's how we work.
Howard: So, it's 25 ... it's $2,500 for the H.R. manual. Then 149 ... does that keep your manual updated or ...?
Paul: That keeps your manual updated. So, if you're in, say, California, New Jersey, New York, Florida, any of those States where there are legislators - and that's who's doing this. It's State legislatures; it's not so much the federal government. They haven't really changed the rules much on the federal level for the last 30 years. I mean, the National Labor Relations Board - you guys see me post about that often - they have upped their game but it's mostly State and local legislatures that are passing all these laws. So, we keep them updated. We let them know, you know, sometimes you'll say, "I want to change a policy. I want to change my benefits. I want to do something differently." And, Howard, I just want to kind of highlight this: the paid sick leave laws. You know, we just had it passed here in Arizona by referendum and they've passed and are being enacted in over 44 different municipalities, cities and States right now. So, with that, they are killing the PTO model because of the way the laws are being written.
Howard: What's PTO about?
Paul: Well, PTO is generally what you do ... it's paid time off. So, instead of trying to split vacation and sick leave and, say, you know, you take these number of days to be sick and then you've got to hold your left foot up and that means it's sick leave; you hold your right foot up, it's, you know, vacation. Instead of doing that, you lump it all together and say, "Fine, I'm going to give you, you know, your first year, I'm gonna give you 8 days of PTO. You can use it for a mental health day. You can use it take your kids to a soccer game. You can use it to be sick. You can use it for vacation." And, you know, as typically the model is, as they are there longer and longer in service, they earn and accrue more and more of this PTO time. The problem with that is that - and I'll use Arizona as an example - when they put the paid sick leave laws in, they have to be treated differently than vacation time. You don't want to tie the two together. You don't want to have them in one lump sum. So, now, where you had this pretty darn convenient and easy thing to administer and keep track of, you now have to split these two out and return to that paid sick leave side and the vacation side.
Howard: And this is why Americans, especially business owners, cannot stand the government. It's because they always have a big heart, but they don't have a brain. Like Obamacare was beautiful, I mean, no pre-existing conditions, I can keep ... it worked for me, I get to keep older kids on the policy.
Paul: Yeah.
Howard: But, they didn't pass one thing to make it faster, easier, cheaper.
Paul: They needed to keep working on it.
Howard: And then when the costs went up 25 percent, I mean, we have a health care system that's one third paperwork ...
Paul: Yeah.
Howard: ... and who causes so much of paperwork? A government HIPPA, a government OSHA, a government employment law, a government H.R. law. And they don't realize that we love their big heart, but they don't have a brain. They can't ever streamline a process like free enterprise does.
Paul: Yeah, it seems like once we put people into power, they lose their ability to think like entrepreneurs, like dentists, like you and I, like, you know. I mean, how many times have you put a solution in place and you know you're not done yet. This is just our first step. We had to do something. Let's get this where it needs to be.
Howard: Yeah.
Paul: And that happens in employment law as well. We really have watched State legislatures put legislation in place. And if you are looking at the conversations that's going on in the background - and that's our job: we're watching what the attorneys are saying, we're watching what the State legislators are saying, we're seeing things come together - and they basically imply, this is as good as we can get it. We're going to have to flush the rest of it out in court. And what they mean is, some of these things are going to have to go to court in order for them to get settled. And they're just looking at you and I when they do that.
Howard: And everybody always looks at their paycheck and looks at how much taxes are taken.
Paul: Oh, yeah. Who's this [00:30:57] [sounds like: FICA] [0.0] person?
Howard: But they don't realize that a larger tax is the hidden tax of regulation in this society.
Paul: Yeah. It's there.
Howard: Yeah.
Paul: Yeah.
Howard: And, I mean, like, so many dumb stuff, like in Ahwatukee, you have 2 high schools, 4 middle schools, 8 elementary schools.
Paul: Uh-huh.
Howard: You would think 8, 9, 10, 11, 12, 13, 14 - 14 nice parks to go play with your kids in. Oh, no!
Paul: No, no, no. This is locked up.
Howard: We'll chain link fence it off. Someone might fall off the swing and sue the school for a million Dollars and all that stuff.
Paul: Or perhaps, let their 3 minpins in and poop all over the place.
Howard: Yeah.
Paul: I'm not saying I did that, but ...
Howard: I mean, when we were little, I mean, you know, going to the school's playground, I mean, me and my five sisters swung on those swings ...
Paul: But there were no fences.
Howard: ... a gazillion hours.
Paul: Yeah, those playgrounds didn't have fences around them.
Howard: Yeah.
Paul: Nobody would even think to fence in a playground.
Howard: Yeah. Oh, my g*d. So, let's go top to bottom.
Paul: Okay.
Howard: What is the ... 'cause you're in touch - I'm not even smart enough to be asking the questions to you, because you're in the field answering all these phone calls. So, go through the top, you know, start with an inverse triangle.
Paul: Okay.
Howard: What are your calls coming in for the most? What problems are you seeing and solving? Next, next, next - just go down the pyramid.
Paul: Okay. So, if we start at the top, it's the basic problems that we all ... that I kind of started alluding to earlier, you know, it's something surrounding engagement. It's drama, lots of gossip or something going on in the practice. It is an employee who is just not doing what it is that they're supposed to be doing. Typically, Howard, it shows up as the person's leaving early. They're on a team and they're leaving early and they're coming in late.
Howard: That'd be the number 1.
Paul: Yeah, I think that's the number 1. They're really these personality things which, you know, that's a whole other part of what we do in answering these problems. 'Cause you can call your local attorney and he'll say, "Well, write her up", or "Fire her. You can fire her for that." And the cost of turnover to fire someone who's been trained and been there for a long time, is really high. I mean, in ... there are studies out there that show it's 25 percent, 50 percent, 100 percent. If it's a high-level person, 150 percent, if you're continuing to turn that person over.
Howard: And it's so much worse than the generation I saw. The Google, Facebook, all those - their average Millennial programmer stays 2 years.
Paul: Yeah.
Howard: Our generation ...
Paul: Used to stay longer.
Howard: My mom's brother got a job with Mobil Oil, in the mail room ...
Paul: Yeah.
Howard: ... at 16 ...
Paul: Right.
Howard: … and he stayed there until he was 65.
Paul: Yeah, yeah.
Howard: And the Millennials, I mean, so, when I talk to the CEOs of corporate dentistry, I mean, some of these big deals could hire 500 dentists right now because the turnover is so high.
Paul: Yeah, yeah. So, issues in the office related to turnover, things that are causing turnover, things that are causing turmoil, things that are causing the doctor to lose sleep at night. I mean, we joke about it. We've been talking about our next deliverable, you know, when we're done with the handbook, is to just send everybody like a wine, a really nice corkscrew, and say, “This is the other half of H.R., you know, a good glass of red wine at the end of the day can solve a lot of things in H.R.”
Howard: Yeah.
Paul: And then, you know, we come down ... and then we come down from those kind of ethereal, personality, human relations sort of issues that go on in all the offices and for which we have lots of conversations for helping you talk to people about stuff like that. Then we start to move down into the more ... the things that are going to be more related to policy laws and things like time off for pregnancy in the workplace, new paid sick leave laws. You know, somebody has left your practice and they've got your laptop and they happen to be the doctor's personal assistant, so it's like, "I want my laptop, my dog and my dry-cleaning back. How can I get those things back from this person?" And they're talking about withholding the final paycheck, they've written a policy that says that - which is incredibly illegal, no matter where you are - to hold an employee's paycheck for a piece of property. And we just, kind of, move down the level until we get into the ... just the mechanics, Howard, every single day. If you've got a team of ... you know, once you hit 8, things start to change. Once you hit 12, even more. By the time you hit 22, you long for the days when you had 12 employees; and then when you had 12, you were like, "Wow, this is a lot more difficult", because you start to see turnover and, you know, you ...
Howard: And I can vouch for that. It's, you know, these dentists, the Heartland with 700 offices and Pacific with 500 ...
Paul: Right.
Howard: ... and [00:35:35] [unclear] Dental, 300. [0.7] So, they want to do that.
Paul: Yeah.
Howard: And the most common bankruptcy is at about that third office.
Paul: Right.
Howard: Because when you're in 1 office, you're just muscling it all.
Paul: You can.
Howard: And when you're in 2 offices, you can muscle it. But by the time you're at the third, your ...
Paul: You have to have systems.
Howard: ... your lack of systems ...
Paul: Yeah.
Howard: ... overwhelms you and takes you down.
Paul: And so, you know, that's one of the most exciting things in H.R. for me. It's a big initiative for us, as we're going into this next year, is to really be able to bring up the other side of human resources, which is the strategic H.R. planning and how it fits into more strategic planning for your practices; because, you know, a lot of doctors have been with us for 10 years or longer. We've been around 11 years. I have, like, 30 people who have been with me that entire 11 years, and they've all grown and they're all meeting new challenges and they've got this employment law thing figured out. They've had us, they have the books right and all the different entities and the different states and that stuff. It's now. Why aren't my people engaged? Why don't they do it? Why do they do it like I want them to do it? Why don't they think like I think? Who would think like that, you know. And so, there is another side of this that is not brute force. It is planning and putting people on the same page and having them understand, you know, what your purpose is at this practice. You've probably heard this, Howard, it's attributed to Southwest Airlines, but I think it's just a parable in general about airlines. One day someone says, "We should put olives. The other airline's putting olives on their salad. We should put olives on ourselves", and, of course, the pencil pusher comes up and says, "Well, if we put olives on every single salad, every single day, it's going to cost us $425,000 a month to put those olives on those salads, and is olives on salads our mission here at this airline, or is it delivering people on time to their families for the lowest affordable fee? And if that is our purpose, then why are we putting olives on the salad?" And I think we lose sight, as managers and owners, that we can put a structure in place where people can run our businesses, where we can be ... [00:37:52] [sounds like: Greg Stanley] [0.5] is one of my favorite people in the world, and Greg, you know, the first time I heard it, I was like, "This is genius." You know, I mean, Greg is a pretty bright guy, and it's like, "Doc, if your thumbs aren't wet, something's wrong here." And I think, if you really want to be a high producer and you want to be doing the things that you want to do, which include time away from your business, spending less time at home complaining about employees and work, and more, you know, connecting with your family and stuff; learning how to do the strategic planning part of H.R. will serve our doctors well. And we're really focused on this with young doctors coming out of dental school. We're making it a much larger part of our initial conversation with them.
Howard: You know, and the reason people like you and [00:38:35] Greg Stanley [0.4] are so intelligent is because you're so connected to so many people. I mean, every time - Greg's up the street - every time I've ever walked in there for 30 years, he's on the phone with the dentist.
Paul: He is?
Howard: And you just sit there at the desk and you listen to him talking to this dentist, I mean, he's listening to problems all day, every day for 30 flippin' years [00:38:53] [sounds like: eventually]. [0.5] And I asked Greg last time he was on the show about a year ago, I said, "So, what's new problems?" And he goes, "I haven't heard new a problem ..."
Paul: I haven't heard a new problem!
Howard: "I haven't heard a new problem in 10 years! They're the same."
Paul: Yeah.
Howard: H.R. is so tough because, you know, it's so funny because when you go to those zoo, you don't hold those animals to any high standards, but you don't consider yourself an animal. You call yourself a human, and you put clothes on, but you're a wild, savage ape. You're a primate, and they're extremely hard to manage. And management is everything. So, you mentioned earlier, embezzlement.
Paul: Yeah.
Howard: Are you seeing that very common?
Paul: You know, Howard, during the meltdown, when we were, you know, kind of talking about that, I did see a lot more. We did get a lot more embezzlement calls, but they still come in all the time.
Howard: So, you're saying when the economy melts down, that's where people do desperate things.
Paul: Desperate people do desperate things, yeah.
Howard: And there are a lot of red flags on embezzlement, you know, if someone is desperate. You know, I've been seeing a lot of Fortune 500 companies, when they get a new hire, they want a ... they run a credit report on them.
Paul: Yes.
Howard: Because if you have really bad credit and you're really desperate ...
Paul: Yeah.
Howard: ... you're more associated with a lot of other ill behaviors.
Paul: Yeah.
Howard: Do you buy into that?
Paul: Well, you know, Howard, I'm going to - and this is a good H.R. moment for everybody out there - it is no longer legal to run a credit check on someone unless you have a reason to run that credit check.
Howard: Seriously?
Paul: Yeah. So, if ... look, if they're collecting money, if they're collecting money at the front door, then you're perfectly within your rights. If they're handling money. If they're gaining access to people's credit card information, you know. Any of those things, you can do that. And we do advise it. You can do it on the classification which is 'professional', and that would be associate doctors. We recommend that they run credit checks.
Howard: Well, you know how I get my free credit reports on people?
Paul: Yeah, yeah.
Howard: I just hack into Equifax!
Paul: Equifax, and just ...
Howard: And obviously ...
Paul: Could you share that information with me, please?
Howard: It must not be very hard. I think everybody's doing it.
Paul: Yeah.
Howard: So, associate contracts.
Paul: Uh-huh.
Howard: A lot of dentists just download a boilerplate off Google.
Paul: Yeah.
Howard: They just go into Google and type 'dentist associate complex' ...
Paul: Yeah.
Howard: ... print it out ...
Paul: Or get it from a friend, yeah.
Howard: What do you think?
Paul: Well, you can imagine what I think.
Howard: Do you do that?
Paul: We do associate agreements and, frankly, I'm going to go back to just Greg for a sec because we mention him. Greg actually got us started doing associate agreements, because that's what he was coaching in Growing your Business, and he was like, "Could you guys do associate agreements?" So, we've done hundreds of them with thousands of different associates. It's one of the things that we're very, very good at. I don't know - we might be the leading ... we may be doing most of them in the country. We're pretty darn good at it.
Howard: So, you have lawyers then on your team?
Paul: Oh, yeah. We have ... CEDR has anywhere from 10 to 15 attorneys on staff at any given time. Those ...
Howard: Holy, moly!
Paul: Oh, yeah! Those are ... but they're converted, Howard. So, these are people, these are attorneys who have decided they don't want to be in the game of suing people and they want to be doing something different in their life. And so, we bring them in, we reform them, we train them, and we turn them into a problem-solvers. So, they're not just ... they can't just kind of help you solve your H.R.-related business issue, they can help you resolve it with an understanding of the letter of the law down to the T, what it is that, you know, which will affect this situation when you go to try to solve this problem.
Howard: What I see the most from my perspective - I don't know what your perspective is on the associate [00:42:46] [unclear] - [0.3] but what I see most common is that the associate leaves with the patient list.
Paul: Yep. I've had hygienists do it sometimes too.
Howard: And then they contact them all and say, "We've moved."
Paul: Yeah.
Howard: "We're now at this location." And, what, are you seeing any of that?
Paul: Oh, yeah! Yeah, yeah, we do see that sort of thing occur. And that's why when you do an Associate Agreement, you want to have it done by somebody who knows dentistry and they understand the working relationship between a dentist and his associate, or multiple associates. And so, there are a lot of things that you can borrow, download, in handbooks and in agreements that can really get yourself in a lot of trouble. And I'm just ... I want to give one thing away here, Howard. I want everybody out there who's ever been given an Associate Agreement, to go look at the Associate Agreement and go all the way to that last page with all the little legalese that says this is separated, etc., etc., and I want you to look at who the Associate Agreement ... who the agreement can be applied to, and what you generally see is a kind of a disclaimer that says neither party can assign this agreement. And it sounds and makes perfectly good sense in almost every other business relationship. I'm saying, "Look, Howard, you can't assign this agreement to somebody else and have them enforce it on me. So, if something happens to you and you pass away, somebody else can't come and enforce this." And it works both ways. But, if we're in a state where we've been able to establish a reasonable non-compete, and we have all these things in place and, Howard, I'm coming in - and we can do it in Arizona - and I'm coming in to purchase your practice, and I see that you are non-compete is not assignable to me, I'm going to go, "Howard, I know you wanted 1.7; I'm going to have to offer you 900,000. Because we have no control over your associate, and he or she could just move right across the street." That's an example of an error that I see made in these associate agreements all the time. And if you're not working with dentists and not understanding what happens when you're 65 years old. You build the practice up, you make it worth as much as you can, and you pass it on to another associate. That's the natural course. There's your final 900 to 2.5 million Dollars that's going to go into your retirement. And so, there are lots of places inside of your associate agreement where you can get really, really good clarity with it. And that's the biggest feedback that we get, is, "Wow, it was 35 pages long. It did seem a little bit scary, but when we started reading it, we couldn't find the thing in it that we wouldn't want to be talking about."
Howard: The big corporate chains, you know, those 35 that have more than 50 locations, they always try to convince the kids that these contracts are all non-negotiable, it's just as is. Do you find that in the field it's true? Do some of these chains say, "No, we won't make any changes to our contract."
Paul: Yeah, I do. I do find that, and I do want to tell you, in our model we take a different approach. We kind of have the same conversation going on. By the time we've gone through the agreement with you, and we've talked about what your profit and loss is, what you're paying your associate, how that's going to affect your books. Everything that we go through, we want it to be a win-win. There's nothing worse than having ... no-one should win in this model. The associates should get paid well, you should end up at the end of the day making your 20 to 30 percent off of your practice, even with your associate in there working. And so, in that regard, there's not a lot of negotiation that goes on. If the guy comes in and says, "I've been told I have to get 35 percent. That's what a dentist is supposed to get." Once I do the math with the doctor, he realizes, "Wow, on days when I'm not in there, and we're not producing shoulder-to-shoulder, I'm actually going to be paying out of my pocket to have that associate working in my practice. That part's not negotiable." But, one of the good things about our agreement is that it has been reviewed by many other opposing counsel and many good suggestions have been made, and we've had an opportunity to improve it over and over and over again. Yes, when you look at the big ones, they come out and they typically have their boilerplate and that's what they're going to make you stick to. So, your choice is: sign it or don't sign it.
Howard: What do you see the average associate compensation?
Paul: 30 percent.
Howard: 30 percent of what?
Paul: 30 percent of net production.
Howard: Net production.
Paul: Yes.
Howard: So, that's after the PPO adjustment, production ...
Paul: Yeah. After all of the adjustments. Whatever those adjustments are.
Howard: You usually see 30 percent of adjusted production?
Paul: Yup.
Howard: But is the employer paying the lab bill?
Paul: The employer's paying the lab bill.
Howard: Yeah, and then that's tough, because when the associate pays half, they send it to Glidewell for $99.
Paul: Yup.
Howard: But when the ...
Paul: The associate does it ...
Howard: ... the owner does it, they send it up the street for 140 bucks.
Paul: That's not how the agreement reads. The agreement reads, "You'll send your lab where we tell you to send your lab.
Howard: Oh, so, a lot of the agreements define that.
Paul: Yeah, yeah. I know, we just define that stuff. If somebody wants to negotiate that and say, "No, I have to use this particular lab", then they're buying into, "I'm going to have to charge you for those labs."
Howard: Yeah. The highest morale killer that I've seen in corporate is, you know, the, you know, it's tough ...
Paul: Yeah.
Howard: ... when you have assistant turnover, you know. Or you're going in, and you've got this big case, and you get some clueless assistant or she's on some - what do they call that, from these dental assisting schools, they go out and do their 40 hours?
Paul: Oh, yeah, yeah. She's an intern.
Howard: She's an intern for a month and you're just like, "Man, do you know how hard it is to see 12 patients in a day with someone you've never worked with before? Whereas, if I was with Julie, we can crank." And so, the assistant turnover is a huge morale builder with the deal. But the other one is, a lot of them say, "You have to use this lab", because they usually own the lab or they get a kickback.
Paul: Kickback.
Howard: So, they get like, you know, 12 cents of every Dollar and the lab bill goes to them personally.
Paul: Right.
Howard: And they hate the lab.
Paul: And they don't like the lab.
Howard: They hate the lab! So, I notice the ones that have the lowest turnover - I believe Heartland Dental is the one with the lowest turnover, and they give them a list of like, you know, 12 or 13 labs.
Paul: And they can pick the one that they like to work with.
Howard: Yeah.
Paul: And I think ... when I'm thinking about the couple of agreements that I've actually stuck my nose into, the last few, I have not seen them listing or saying that they would offer a variety of labs. You know, I'm actually going to make that suggestion. I going to put that in for our team and ask the ... and just tell our host doctors, "You might want to give your associate an option of 2 or 3 different labs."
Howard: But, how would an H.R. contract, an H.R. manual, affect embezzlement though?
Paul: Well, it can affect it in a couple of ways. So, one of the ways that it can affect it - and I see this mistake made a lot - is the Supreme Court gave us this about 8 years ago. If you ... basically what we're going to do is remove a person's expectation of privacy when they're on our systems, and it has to be said almost in those words. In fact, the Court that ruled on this said, "If you'd like for them not to have an expectation of privacy so that you can use what you find in your systems if you need to, then you should actually use those words: 'you have no expectation of privacy'." And we take that a step further and we let them know that it could include that we could see into their own personal e-mail account what they're doing.
Howard: Where do you see the most H.R. activity on Dentaltown? Is it under practice management?
Paul: Uh-huh, yeah. You guys have 3 - you have staff management and issues, front office, Ask-a-consultant - under practice management. Those are the 3 that I'm most asked.
Howard: Staff management. What was the other one?
Paul: I think it was staff management and issues ...
Howard: Yeah. Is that the most? Do those categories work for you?
Paul: Yeah, they work really well.
Howard: Or do you think they should be consolidated?
Paul: No, I think it's actually really ... your membership does a really good job of kind of keeping their questions in the right places on those things.
Howard: And your courses are pinned to the top of those.
Paul: Yeah, a couple of those are pinned to the top.
Howard: So, talk about your courses. This one is 'Handbooks and Policies. What every employer needs', and here's what's neat. Let's see if I can do this.
Paul: Yeah.
Howard: I'm not the sharpest tool. I go to your course on Dentaltown.
Paul: Yeah.
Howard: I hit that. So, then I hit Twitter.
Paul: Yeah.
Howard: And I just push that on Twitter.
Paul: And on it goes.
Howard: Then I hit it again and I go to Facebook.
Paul: Right. So, I did this course about a year ago. Tom came to me and we were just kind of talking about ...
Howard: Tom Giacobbi?
Paul: Yeah. Tom Giacobbi came to me and we were just talking about courses and he said, "You know what would be great is if we could get a course out of you that really kind of covers the whole subject of H.R., so that if they watched it and they were kind of new to the game or just getting ready to get into the game of having employees, it would help them understand what it is they're facing and would also provide them some practical knowledge." So, I sat down, and I thought, "Well, yeah, Tom, I can do that!" Howard, you do this stuff. It took quite a bit of time for me to lay all of that out and figure out what the key areas were that people would need to know before they start a new business. And so, that's what it is. It's about an hour of me jumping from topic to topic to topic. And I scripted it. I went back and forth and scripted it, so I could be super-clear and that's what it is. It's kind of a crash course in H.R.
Howard: That is as amazing. I just think ... By the way, so, I just pulled ... if you take this course ... you know, the greatest compliment a patient can give is a referral from your loved one. So, if you take an online CE course, it says Share, and you hit the share and you can post it to your Facebook, your Twitter, your LinkedIn, but that's a hell of a compliment when someone does that.
Paul: It is.
Howard: And also on the magazine, you know. These ... we never have ... we never paid anyone to write any of our content since 1994.
Paul: Nope.
Howard: We've had a monthly magazine every month since 1994. And so, if you read something ... I mean, some of these cases these dentists might have to do 10 different cases of this crown before the photography turns out on one. But, I mean, some of these, you have no idea how when me and Tom Giacobbi talk to some dentists and say, "You know, you need to write an article." I mean, it can be a year, a lot of work. So, if you read it and you learned one pearl and you learned, "Well, that was cool", share it. It's a great compliment. So, we were going through the pyramid. I've only got you for 7 more minutes.
Paul: Okay.
Howard: What other issues are you seeing?
Paul: Well, you know, I think, Howard, the issues that you all see out in your office, those come in by the thousands. The ones that begin to kind of get to the bottom of that are the issues where I think the strategic H.R. planning has to start taking place. There are no easy solutions to constant turnover. I don't have a magic bullet to make you a better manager if you're not a better manager. So, you know, what I want to say is that at the bottom of that inverse pyramid, we're beginning to see failures on the part of leadership. This isn't the employees. But it's hard to get on the phone and say, "You know the problem is?" I mean, I could do it with you, Howard. I can go, "You know, Howard, I've listened to you for 5 minutes. Let me tell you who the problem is here." And if I say, "It's you, Howard," you'll be like, "Okay, Paul, how?" You've been doing this for a long time. You've heard a lot of people. I mean, you told that you've done over 900 of these podcasts. You've gotten pretty good at listening. That area is, I think, amongst the hardest, is when you're beginning to learn that being a manager of 15 people is not the same as being a manager and an owner with 6 to 7 employees. So, the issues come up where you're stuck. I think that's one of the biggest H.R. issues we get. Things aren't getting any better around here, people aren't improving. Doesn't matter what we do. Doesn't matter who we write up. Doesn't matter how many meetings we have. We're not getting anywhere with this team.
Howard: I just love reading in the H.R., so many of these H.R. issues like you say, are emotional. Like this guy says, "Just found out that my front office coordinator is applying for other jobs. What should I do?"
Paul: Yeah.
Howard: That's emotional.
Paul: Yeah.
Howard: I mean, as if there's one person in the NFL playing quarterback ...
Paul: I know.
Howard: ... [00:55:15] [unclear] [0.1] that not every single person is looking at.
Paul: So, can I tell you something that I do with my leaders? I sit down with my leaders and they hear this reinforcement from me - and your guys are probably going to be listening to this and go, "What are you doing?" I actually say to them, "Give me all you got while you're here, and when you're ready to go it will be because we have developed you and evolved you so that you can move on, and if you're ready to go, let me know, so I can help you move on. Let me help you get the next job and your job, when you leave here, is to make sure you don't leave a gap. If you have any respect for me at all and if you have any appreciation for what we're doing here, don't leave a gap. Bring the next person up behind you."
Howard: Other issues that are always ... two other issues, I'll tell you. One is always, what is illegal to ask in a job interview, and the other one is, they're always asking, "Well, Friday, where the office is going to take them to a continuing education course, and the office will be closed, we're not having production, but we'll all benefit. So, I don't want to pay her, do I?", or they'll have a lunch and they'll say, "You know what? We're going to have ... Wednesday we're going have a mandatory, we're going to eat lunch here. I'm going to go buy you pizzas and a sub, so you can't leave. So, I don't have to pay you."
Paul: Right.
Howard: Address those.
Paul: Okay, so, let's pick California first on the lunch-and-learn. Even if you do pay them and you pay them a wage for that, you also owe them premium pay on top of that. So, California has a law that says that if you miss your lunch pay, you have to get paid time and a half during that time period. So, that's an easy mistake that gets made all the time in California. In all other instances - they call it ... Howard, they call it 'being made to suffer to work', is actually the legal terminology. And what it means is that if you're doing anything that has to do with work, you have to be paid for it. So, you can take them on a CE and pay for hotel rooms and give them $600 cash and pay for all the courses and pay for their flights and do all of those things, you still have to pay them for the time that they are attending. So, it's just like it is at work. So, you do all those other things, you still have not met your obligation as an employer. Here's the next part of that. It was being tacked on to the 40-hour workweek. So, if we've worked 36 hours, and we flew for say 6 hours and then we were in the meeting for 6 hours one day and the following day we were in it again for 4 hours, is being tacked the to the regular workweek. We do not get to make the rules up about this. And so, you know, the main thing - there's these 4 things that, all 4 have to be true, and there's no way all 4 can be true. You're not going to get out of it - but the main one is that it doesn't really benefit the practice for them to be at this event. And so, that's always going to be the case. Why would you take them with you? So, I made it voluntary. Well, that's all they want. It would have to be voluntary. It would have to be outside normal work hours. They would have to perform no work that they normally do. So, your hygienists aren't going to be in there cleaning teeth while they're at the event, your front office is going to be answering phones for the event while they're there, but then that fourth one kicks in. Which is it benefits the business because they're there doing that continuing education. So, you have to pay for that time and you can pay a differential rate of pay. You can establish a lower rate of pay for those hours, as long as you do it in advance, and then you get into this weighted average of the overtime and all the hours that are worked.
Howard: So, what can I ask you in an interview? I can't ask you what? Your age, your sexual orientation?
Paul: You can't ask me ... you can't say, "Hey, that's an interesting name. Where are you from?", "Have you ever filed a lawsuit against another employer?”
Howard: You can't ask that?
Paul: No. "You look to be in your mid-20s. Are you in childbearing age?" You can't ask any of those questions. You've got to ...
Howard: We ask for ...
Paul: Transportation, you can't ask for that either.
Howard: We ask for a doctor's proof of your tubal ligation.
Paul: Of your tubal ligation.
Howard: Yeah.
Paul: You know what? I think that's okay.
Howard: We have to see the doctor say, "Yeah, I clipped them both and put the little clamps on each side."
Paul: I just ... that brought something to me.
Howard: Can you ask where her husband works?
Paul: You could ask where a family member works.
Howard: You could?
Paul: Yeah.
Howard: Because, man, I have lost so many amazing staff when I was young, because, you know, her husband's in the army. Well, goddang, [00:59:31] [unclear]. [0.1]
Paul: Right. Right. But you know ...
Howard: IBM. I used to say IBM stands for 'I've been moved'.
Paul: Yeah, but you have to be careful. The IBM, you'd be okay, but you have to be careful, and this is what you do. This is what doctors do. You've got your right-hand person and you make these comments about, "Oh, g*d, it's in the army. You know we can't hire her." Well, that's not legal. You can't hire someone because they're married ...
Howard: You can think it, but you can't say it.
Paul: You can think it, but you can't say it. So, you have to be careful about that approach to it. But you can ask leading questions, and this is one of my favorite questions, and I've learned to really listen to this question. It's part of a behavioral interview, where you're asking something to get back more than one word. Can't say 'yes' or 'no'. They can't answer 'yes' or 'no'. I'll say, "What do you do? What stimulates you when you're away from work? What do you do for fun?" And that's where you'll hear, "Well, I've got 3 kids and they're playing soccer. So, I've got that." And then you can expand on the answers that you're getting to that sort of thing to see if maybe you have someone who's an even better fit for the position. You know, it's like, "Wow, we have this other position. It sounds like you might be really good for that", and you can also get a sense of who they are and what they do.
Howard: And another red flag that we have down here in Phoenix. I've watched this for 30 years. I got burned on it 3 or 4 times ...
Paul: Yes.
Howard: ... in my first 10 years. Now I avoid it like the plague. Phoenix is ... it's warm, it's desert, it's cool. So, all these young girls from Idaho, Montana, North and South Dakota, they all leave high school and they come down here and they're just going to party. No Mom and Dad. Great weather. The minute she's pregnant, guess where she wants to live?
Paul: Yes, she wants to go back.
Howard: A block away from Mom.
Paul: Yeah.
Howard: And, oh, my gosh. So, one day they tell you they're pregnant, and then before they start showing, they're like, "Well, I'm going to move back to North Dakota", and it's like, yeah, I mean ...
Paul: Yeah, no.
Howard: I mean, I see it.
Paul: You just have to say, "Congratulations!"
Howard: I'll tell you the longest employees that I've ever had stay with me, I mean, were born ...
Paul: Right here.
Howard: ... right, you know, close, in my referral area of my practice. 'Cause if they were born in that house, their Mom's up the street, their family, and even if their other siblings move away, they all went to schools and high schools. So, it's kind of the referral base for Thanksgiving, Christmas. They're 10 times more likely to call home. Like, I have so many dentist friends from other countries and they still think of the country they came from as home ...
Paul: As home.
Howard: ... for at least 20 years.
Paul: I'm from North Carolina and I still call it home. I mean, I haven't been there, lived there in 15 years, but …
Howard: And their quarterback got hurt yesterday.
Paul: He did, yeah.
Howard: But, yeah, I mean, man, that must have been very painful to see. You knew there was no way they wouldn't win the Super Bowl.
Paul: Yes.
Howard: There just wasn't even a chance.
Paul: But that's not what happened.
Howard: That guy, Cam Newton, could run to the line, do a flip over the tackler ...
Paul: And just keep on going with 17 people ...
Howard: ... where, man, he's like all broken, his neck doesn't work, he's in all these braces. You know, a friend of mine - I've got to say this carefully because you could figure it out, but I have a friend, he's very, very, very involved in the NFL. And he says that when Manning was suiting up for those games, I mean, towards the very end of the career, it would take him 30 to 40 minutes to put that uniform on.
Paul: Just to get the whole uniform on.
Howard: I mean, he was so stiff and sore and busted up and everything.
Paul: Well, I want to talk about what the Broncos did real quick. Their purpose was clear that day: hit him like he's never been hit before, hit him often, hit him hard. And that's what you watched that team do. And you can put that ... of course, you don't want your team lining up at your dental practice waiting for patients to come in and nail them as they come through the door. But that sort of genuine, clear purpose can get amazing things done with a group of humans; and that's 12 people on the field and that's 12 heartbeats in your office that you can, if you get people aligned with the purpose and your mission and your culture, there's nothing they can't do, and we saw that happen on that field. Unfortunately, you know, it happened to Cam but - he had a bad day.
Howard: So, my god, we're into overtime ...
Paul: Okay.
Howard: ... and they're sitting in the parking lot at work, thinking, "When are those two old guys going to shut up and I can go in?"
Paul: I know, I know.
Howard: So, just, and what are they going to find at CEDR Solutions? C-E-D-R. Where does CEDR come from?
Paul: It's a funny story, Howard, I'll make it very quick. We originally called the company The Center for Employment Dispute Resolution because we thought that that was a great idea. And what we learned was that if you left that sort of a message as a kind of a sales call, the doctor would come to the phone with his voice sort of shaking because it sounded like a government agency, and that's not what we intended. And after about 6 months of once you figured out I wasn't a government agency and you screaming at me because I scared you by leaving a message like that, we decided we would change it to CEDR. So, it's just ...
Howard: You know what I thought it was this whole time?
Paul: What?
Howard: I thought the CE stood for 'continuing education' and the DR was 'doctor'. I thought it was 'Continuing Education Doctor Solutions'.
Paul: I love that. I will probably play off of that. Howard, that's brilliant!
Howard: That's what I saw.
Paul: No, I love that.
Howard: Continuing Education Doctor Solutions.
Paul: So, if they go to the website, they'll find all sorts of stuff on our blog. They can look through. They can get in touch with us. You know, we even offer to help out with single issues. So, if somebody is out there listening and you have a problem, we have kind of a 'get out the jail free' card - a little homage to Monopoly - and you can give us a call and we'll help you through your issue. The one thing that we do ask is that you allow us to look at your employee handbooks before we solve your problem. Because, I mean, that's really the crux of this. One of the reasons why I'm excited to be here, Howard, is folks need to understand that these employee handbooks are way more protective of you than you realize. There are all kinds of laws out there that protect you as the employer if you get it right; and then the other side of that is once you're in front of a government agency or you're in, you know, the lawyers are coming, you want this document to help you. The last thing you want is something in it that says, "No gossiping allowed", or something that says, "We don't pay for CEs because both of us benefit. They're all voluntary." Or I could go down that list. It's not unusual for me to find 50, 60 errors in a self-made employee handbook.
Howard: Did I tell you my dental assistant named her newborn baby boy Howard after me?
Paul: No way!
Howard: Yeah. Well, I was the father.
Paul: Oh, well, that makes sense.
Howard: That makes sense. Is that legal? Is that covered in the H.R. manual?
Paul: It is covered in the H.R. manual.
Howard: I'm kidding! I'm kidding! Well, hey, seriously, Paul, thank you so much for driving an hour and a half all the way to Phoenix to see me.
Paul: Howard, it was fantastic.
Howard: Are you going to stop by Dentaltown on the way out or are you going to head back or ...?
Paul: You know, I think I've got ...
Howard: Have you been to Dentaltown?
Paul: I have not been into your headquarters. I've been to your events and, you know, I'm always on, but ...
Howard: It's on the way to I10.
Paul: Should I drop in on them?
Howard: Hell, yes.
Paul: Is there something I should tell them when I get there?
Howard: Oh, I don't know.
Paul: Do you want me to find anybody while I'm there?
Howard: Well, I would love to go by and see the editor, Sam, because ...
Paul: I would love to see Sam.
Howard: ... because I love your stuff, because ...
Paul: Oh, thank you.
Howard: My job as a leader to these kids - 'cause podcasters are young - is that I know ... you don't have to encourage them to go learn implants and Invisalign.
Paul: Yeah. No, you don't.
Howard: That's all they want. They're chefs in the kitchen.
Paul: Yup.
Howard: They'll find a new recipe for beef stroganoff. My job is to try to say, "I know you want to learn how to make beef stroganoff, because you're a chef, but you need to pay attention to something you don't want to pay attention to."
Paul: Right.
Howard: It's kind of like your mom telling you to make your bed. I argued with my mom for 18 years, saying, "But when I get in bed, I just mess it back up."
Paul: Yeah, yeah, yeah.
Howard: And she's like, “No, that's how you start your day.”
Paul: Yeah.
Howard: Whether you're in the army, the navy, the air force, the Marines.
Paul: There is something else that happens around that thing that you're doing, you know.
Howard: And, so, yeah, I like to stick to their mode. That's why - and thank you for putting up 3 courses on Dentaltown - because I know what they're interested in. My job is to lead them where they need to be right, where they're not going to end up there on their own intuition.
Paul: Well, we want to keep contributing.
Howard: So, yes, stop by Dentaltown.
Paul: I will.
Howard: And say hi to Sam. And then the lady in charge of our H.R. there is Stacy.
Paul: Okay.
Howard: Do you know Stacy?
Paul: I don't know Stacy.
Howard: She's in charge of our H.R.
Paul: Okay.
Howard: So, it'd be nice [01:07:57] [unclear] [0.1] to Stacy.
Paul: I'd love to.
Howard: All right.
Paul: Howard, thank you.
Howard: Thank you so much.
Paul: It was a pleasure.
Howard: And, by the way, if you're wondering if we disagree on anything you should listen to, I'm in Phoenix with ASU and he's in Tucson, so U of A.
Paul: Oh, you had to bring that up right at the end - just because it's your podcast, you're in charge.
Howard: But it's the best ... U of A is the best place to get a degree.
Paul: It is a good place.
Howard: You know why? Because all you've got to do is drive through Tucson real slow with your windows down and they'll throw a diploma in the back seat.
Paul: Howard, I love that.
Howard: All right.
Paul: Thank you.
Howard: Thanks for coming by.