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Howard Speaks: Ask Away—I'll Answer by Dr. Howard Farran

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Categories: Practice Management, HR and Accounting;
Howard Speaks: Ask Away—I'll Answer 

by Howard Farran, DDS, MBA, publisher, Dentaltown magazine

If you haven’t checked out Dentaltown’s Facebook or Twitter feeds lately, you might not have seen my latest project: I’m answering your questions, live!

The topic of each “Ask Howard” video is something that was asked by a Dentaltown member who posted a question on Facebook or Twitter and used the hashtag #askhoward. I’ll answer the questions in individual videos posted on our social media feeds and on Dentaltown.com.

The topic of my first video: How do you compensate your hygienists for additional cleanings they do?

Keeping employees is key

As I mention in my book Uncomplicate Business, human resources is everything. If you get an A grade in the HR component of business, you can get a C or D in the time and money components and still reach all your dreams, but if you get a D in HR and an A in time and money, you’re going to be stressed out of your mind forever. So reducing employee turnover is key.

If you look at the S&P 500 and compare two airline companies, one of which keeps an average employee 10 years while the other keeps them only five years, the one that keeps employees for 10 years usually makes twice the profit. I think it takes employees five years before they make an indelible mark on your company. Part of the reason I’ve been successful is I’ve got team members who’ve been part of the team for 10, 20, even 30 years. But if I see a new hygienist every time I walk into your practice, I know that things aren’t going well for you.

My formula: base + bonus

People are complex and unique, so there’s no blanket statement that works universally about the “right” way to treat your employees. However, most relationships are based on trust, which I believe requires two things:
  • Being transparent, not opaque and secretive.
  • A system of checks and balances. (You’re not an authoritarian dictator just because you own the office.)
As a dentist, your day has variance—your morning can fall apart with cancellations, but a three-unit bridge and a crown scheduled in the afternoon can make it up. Hygienists don’t have that variance; they do cleanings and exams, maybe six-month bitewings, and everything is consistently priced. If they get a cancellation and they’re paid only on commission, they know they’re out for an hour. Some dentists ask, “Why doesn’t she go up front and work recall during that hour?” You’re not paying her an hourly rate, only on commission—do you want her to work for free? If you’re such a fan of not getting paid for work, why don’t you come and work in my practice for free? It’s OK when it’s your hygienist but not you?

When I first opened a practice, I thought the “obvious way” to pay hygienists was as a percentage of production. When we were having a robust day, nobody ever said thanks for that 35%, but when there were cancellations, I saw a lot of pouting and resentment.

Then, one day, I lost a great employee, and I realized that after enough times of sticking your tongue in an electrical outlet and getting shocked, you have to realize there’s some electricity coming through. So now I pay hygienists and hygiene assistants an hourly base wage—and if our team does well, I include additional bonuses based on production. (If we did this much last month and we do X% more this month, that means $100. If we do 2X% more this month, $200.)

I think bonuses are appreciated more when they’re given out in cash. If they happen regularly, they should be included in the paycheck, but there’s something about cash that puts a kick in people’s walks. (Be sure to check with your accountant about what they’d recommend for your practice, though.)
Ask Howard your own question!

For a chance to have your question answered, post it on Facebook or Twitter and use the hashtag #askhoward.

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