Finance32: Dental School’s Missing Curriculum
Finance32: Dental School’s Missing Curriculum
Great clinical skills simply are not enough for dentists to achieve financial success. Let Buckingham Strategic Wealth's Practice Integration Advisors share what else you need to know to realize your lifetime goals and obtain financial peace of mind.
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Striking a Balance: Navigating Salary Expectations When Hiring Dental Staff

Striking a Balance: Navigating Salary Expectations When Hiring Dental Staff

12/5/2023 9:26:01 AM   |   Comments: 0   |   Views: 60

From landing the right talent to ensuring the new hire is a good fit to offering a competitive compensation package, the dental staffing landscape can be difficult for practitioners to navigate. But what happens when you find the perfect candidate for your practice, but they are asking to be paid more than your current team? To properly address this issue, you need to have a strong handle on the cash flow and profit from your business.

Take a deep dive into the cash flow of your practice.
Having a discussion around the health of your dental practice will allow you to assess how much you are able to offer a new hire. If you don’t know how the funds of your business are being used, then you aren’t equipped to make an educated decision regarding team compensation.

Start with the top line of production and collections and work your way down through all the expense categories of your practice. Simply reviewing a profit and loss statement may not provide you with the details you need in this analysis; it’s important to break this information down into employee, lab, dental supply, facility, marketing, minor and discretionary expenses. This evaluation allows you to:       

        
  • Review each cost category             
  •     
  • Determine what the cash flow and profit of your business look like            
  •     
  • Decide if your expenses are in line with industry standards    
  •     
  • Calculate your overall employee overhead

Review the compensation of your current team members.
Part of this process is evaluating the compensation of your existing employees. This includes examining the hourly rates of your current staff, assessing if any team member should receive a raise and confirming if the current team is receiving competitive wages in your area. Losing an integral team member is a big hiccup for your practice in this labor market. After reviewing your current team members, I suggest modeling any hourly rate increases in your cash flow to show the financial impact of increasing compensation. You can then examine the impact of the new hire on your overall cash flow and how your employee expenses would line up with industry standards. This exercise is designed to give you the confidence and power to know how certain choices will impact the profit of your business.

Look at your current benefits.
It is important to not overlook all the tangibles you currently provide your team. This can equate to a few dollars per hour and may help close the gap between the ask from a potential hire and what you can afford/choose to offer. Considerations include:       

        
  • Insurance benefits to your team.       
  •     
  • Retirement plan funding. Some dental practices can provide their employees 3% to 5% of compensation with a 401(k) plan.
  •     
  • A competitive vacation policy.
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  • Other monthly allowances such as spa benefits, team lunches, etc.

Ensuring you present the offer with a complete picture of benefits can provide the potential new team member with an accurate depiction of your practice and your culture.

What’s next?
These considerations can have a big impact on hiring and retaining valuable employees. If you have questions, please schedule an appointment with a member of the practice integration advisor team. And you won’t want to miss my colleague Brian Roemke’s upcoming blog on how a bonus system may fit into your practice.

About the author:
Practice Integration Advisor Katie Collins, CFP® helps dentists organize their financial lives so they can focus on what truly brings them joy. Her duties include leading client relationships, gathering and preparing data and implementing the financial plan. Katie’s objective is to provide clarity for clients as they navigate through their careers and manage their small business.

For informational and educational purposes only and should not be construed as specific investment, accounting, legal, or tax advice. Certain information is based on third party data and may become outdated or otherwise superseded without notice. Third party information is deemed to be reliable, but its accuracy and completeness cannot be guaranteed. Neither the Securities and Exchange Commission (SEC) nor any other federal or state agency have approved, determined the accuracy, or confirmed the adequacy of this article. R-23-6546

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