Leadership and Staff Raises

Monday, January 4, 2010

Leadership and Staff Raises

In our recent economic survey we asked area Dentists if they plan to give staff raises in 2009. 41% of Metro Area and 24% of Outstate offices said, “No.” Only 30% of Metro and 54% of Outstate dentists will give raises in 2009.

Staff wages are the major overhead item, so it certainly makes sense to go slow with raises if your practice isn’t growing. I’ve often said that the staff’s compensation should be linked to how the practice does, not just to the economy or the consumer price index (which by the way was up 1.8% in 2009).

Even if you’re not giving raises, you should at least give your staff recognition, direction and hope. That’s leadership.

“Look, we’ve had a flat year but I want to let you know that I do appreciate your efforts (giving specific recognition to each staff person). And, I do need your help in the coming year because despite the economy we intend to press on and make the practice better all the time. Once we’ve gotten a string of 4 to 6 months that shows growth then we’ll revisit the wage situation and consider raises at that time.”

Wage increases should be based on these three major factors:

The market rates for wages. (See the Advanced Practice Management Surveys).

How the practice is doing (practice growth and profitability).

Individual merit.

Smart Wage Decisions:

I believe it’s best to take a look at staff wages as a percentage of collections at least once per year for the sake of determining how much will be available for wages and raises.

If your total gross wages were running at about 25% of collections, for example, last year and they are 23.5% now (because your collections grew) then you are in a position to give raises.

If staff salaries have crept up to 26% or 27%, then it’s time to hold off until your practice revenue catches up.

Using this very simple method, you can keep the biggest chunk of your overhead (staff wages) under control.


About one third of dental practices have team incentives. When they work they can work beautifully. They can really pull a team together and lead to greater production. Some of you have been burned by incentives or are jaded about them. The key thing is that if you have set up an incentive with the staff for practice growth you have to have a plan for growth.

You, as the leader of the practice, have to quarterback that plan. Incentives are not indicated and will fail if the staff is at each other’s throats, there is no realistic plan to grow the practice and the Doctor doesn’t do his/her part to lead by example.

Agree? Disagree? How do you handle leadership and staff raises?

Post your comments!

Then give me a call at 952 921 3360 to discuss these or other issues in your practice. Please call with confidence. I consider this a professional-level discussion.

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’til next time…

Posted by Bill Rossi at 8:29 AM
Labels: Advanced Practice Management, Bill Rossi, Dental Consultant, Staff management