Is Your Dental Practice Quietly Falling Apart? Here’s Why

I've heard the horror stories. You're hiring for an open position, you have an ad out, you have an interview scheduled, the person no shows the interview. I've also heard where you go through your entire interview process. You have your first day set for your fresh team member and then they no show. Or let's talk about the person who makes all the way through, you hire them and they end up performing less than ideal. These are all very real things that I'm hearing all day long as far as what's going on when it comes to hiring in the dental industry. But here's the good news. Understanding the root causes and current landscape is the first step towards towards building a resilient and thriving team. Welcome back to the Next Level Practice podcast where we don't just talk about the business of dentistry, we fix it. I'm your host, Kelly Dahmer, CEO of Next Level Practice. In today's episode, we're diving into a very requested topic, which is the current state of dental hiring and how you can be overcoming the challenges that you're faced with today. You're posting job openings, you're conducting interviews, you're making offers, sometimes to a warm body that's not the wrong fit. And then guess what, you find yourself back at square one just weeks later. Now, don't get me wrong, the dental industry is grappling with an unprecedented staff crisis. And According to the ADA Health Policy Institute, about 62% of dentists have identified staffing shortages as their top challenge. In 2025, we're going to be exploring the statistics that highlight the severity of the staffing shortages and also discuss how it's impacting practices nationwide. Yours is probably included. This episode is the first in a three part discussion where we're going to delve deep into strategic solutions for recruiting, for hiring and for onboarding your Rockstar team members. So today, here's what we're talking about. The extent of the dental staffing shortage and what implications that has on your practice. Current payroll percentage goals and how staffing costs are affecting your overhead. And then setting the stage for understanding how that's going to lead into strategic solutions and recruiting, how your hiring works and also your onboarding or training for retention of great team members. So let's talk about the current landscape and dentistry for hiring. The dental industry is experiencing seeing a significant staffing shortage. The ADA reports that about 62% of dentists are actually worried about recruiting and retaining staff. In my experience, that number is much higher, but at least 62% of dentists are actually reporting that it's clear that this shortage is leading to an increased workload for your existing team and really impacting your patient care. Right. So some things that have occurred over the last five, six years that have really painted this landscape. The first was the great resignation in 2020. You'll all remember when 2020 happened, a lot of people in the dental industry decided that it was time to retire. So that is what the great resignation was. There was a lot of unknowns in that time. It was very uncertain. It was very difficult to practice everyday dentistry and a lot of practices actually had to shut down completely. And a lot of maybe fourth quarter team members, or maybe they weren't even kind of nearing the end of their career, decided that it was time for them to just retire altogether. Since then, there has been less retirement happening. However, we now are in what's called the great reshuffling. And I don't know if you've noticed, but it seems like a lot of people are making career changes and that's what the great reshuffling is. So now we have maybe hygienists leaving to go do something completely different. Maybe they're doing something in marketing. I think a lot of this is also due to the fact that the work from home virtual environment is really appealing for a lot of practices. I think a lot of this is also due to the fact that virtual and working from home, which is now such a common option for people, is ideal and obviously not possible when you're practicing clinically. So a lot of people are making career changes to be able to have that flexibility and that work life balance, as they call it right now. The good news is, is I've also seen a lot of places that are requiring employees to return to office. So hopefully we see people settle and level the playing field for businesses that must be practicing in office versus those that have the ability to be hybrid or remote completely. How do we minimize the challenges that that current landscape of reduced employee pool and dentistry and also people leaving dentistry to have a different work life balance? Well, we want to create a work life balance integration for them inside of the number one thing that you can be doing to support you in that is what's called creating an ideal place to work that is tied to a vision, a purpose, and having values that your employees can really align with. This is especially important for younger generations. Yes, it's important that they're making a livable wage and are excited and motivated by their pay. We'll talk about that more later. But studies have come out that have shown that younger generations are more likely to join a company based on alignment to their personal mission as well as the company mission, and also stay with them if they feel like that a mission is something that's alive and a priority for the practice to be fulfilling on. It's number one. If you don't have a vision, if you don't have a purpose and a values, it's something that's create. And no, it's not a business plan, it's not what you do throughout the day, it's who you are, right? There's a difference between doing and being. So make sure that it's something that is impact driven. It's talking about the experience that you're creating internally for your team, externally for your patients. So if you don't have a vision, a purpose and a values in place, number one is to create, create one, have your team create it with you, get their buy in, get their involvement so that they can really feel fulfilled and engaged in that process and then make sure you're utilizing it regularly. It's not just something that's in calligraphy on your wall. It's not just something that's in the middle or towards the end of your job ad when you're looking to recruit. It's something that's discussed daily in morning huddles. It's discussed in depth in your monthly team meeting. If you're having problems with a team member, it's something that is brought back for realignment in a crucial conversation. So make sure that it's being utilized regularly in the practice so that your purpose and values is alive and well. That's going to really help with employee engagement, specifically with that younger and middle generation inside of your practice. The other thing to really keep in mind is if you're managing from a place of scarcity or fear of loss of an employee, that's a bad spot to be in and it's going to cause future problems for you down the road. So let me say that a different way your team is going to perform at the lowest performers standard of level, meaning that your A players over time, what's predictable is they will slowly decrease to your C player level if if you don't hold their C players accountable and or potentially if they're not the right fit, look to replace them. It's something that's predictable if your A players are being held to the same standard as your C players and they see that your C players can do the job with half as much effort and still be treated the same. They're going to catch onto that and they're going to want to form at that level because they understand that that's what's acceptable for your practice. What's even worse in this scenario is if you have a group bonus that's being paid and your C players earn the same amount as your A players in a bonus format, that is a recipe for disaster. So pay attention to that because it can be really, really easy to look at these trends inside of the dental landscape when it comes to hiring and not hold team members accountable because you're afraid of them leaving. Let's talk about how that industry has really shaped the financial implications for our practices and what that means. Right. Because from a financial perspective, team costs, costs are a major component of your practice overhead. And I like to say, right, your team can either be your biggest cost or your biggest investment. How does know if they're an investment is what's your productivity of your team that you're receiving for the time and money that you're investing in them. Now, the industry benchmark suggests that team salaries should be between 20 to 25% of collections. However, with the current hiring shortages, many practices are exceeding these percentages and that's affecting your profitability. Now I like to say especially with a really high performing team with a good performance based bonus in place, you're seeing that number be between 30, 33%. That's a good benchmark, especially post great resignation era. However, it's very important that we understand the cost of employee turnover because I think a lot of times we look at the salaries on the P Ls, say what percentage of my overhead is, is going to that. But what's more important to understand is the direct and indirect costs of that turnover and what that's doing to your team. So the direct costs, obviously hiring, you're putting out money for ads, you have someone who's dedicating time to screening resumes, conducting interviews, maybe working interviews are happening, putting together the offer letters, all of that takes time and does cost money. There's also a loss of production. Obviously, whether you have a clinical team member that you're looking to replace or it's an administrative team member, we're running a small business. And so each person should be a key man or woman on your team. And so if you are short one team member or multiple team members, that's that's going to result most likely in a loss of production. Otherwise your team is going to be overworked and maybe that's possible short term for us all to rally together and long term it's really not sustainable. Right. So that's an indirect cost. Your team being overworked, your team being overwhelmed. There's a difference, by the way, between overworked and overwhelmed. The other problem that we see is specifically when we have team members who've been there for a long time is there's a loss of knowledge or processes when a person leaves. So if you don't have SOPs in place, that's a standard operating procedure, really good habit to make sure that you are consistently putting those processes down in a procedure. You're updating them, you're reviewing them. One thing that you could do is play a game with your team to say, hey team, you know, for quarter three, what we're going to be doing is for each SOP that's submitted and approved, you get $25 gift card or something like that. Right. So incentivize your team to get processes in place so that you can minimize that loss of knowledge. That does happen when team members leave, obviously as well. If you have team members who are leaving and your, your patients are seeing consistent team turnover, your team sees consistent team turnover indirect. Is that damage to your brand and your image in your community as well? I'm having a lot of conversations with our clients right now about employees asking for raises. So yes, take a look and see. When was the last time you did do a raise to your team? Right, there's the cost of living has increased, inflation has gone up. And so it is important if it's a standard process for you to be doing a percentage of a base increase, that that would be something that you might want to continue doing. However, we always recommend moving to a performance based compensation when it comes to increases. We recomm recommend that the team be in a good habit of tracking the return on investment that they're providing for you. Is it a 20 to 1 ratio on collections for their salaries? It's really easy to calculate when there's a performance based incentive in place for your team member because let's say their goal is to be filling the doctor schedule or your hygiene schedule to x dollar per day. If they can calculate how many days they successfully hit that, that's an easy way for them to show a return on investment for them. Right. So instead of it being maybe like 13 per column per day that they're, that maybe they're requesting to move to $15 per day, that way you're only giving an increase based on when they're performing and doing what the practice needs in order to be successful. So that's a really good practice to have in place. You'll want to set new agreements with your team. If they're expecting annual raises just for being there and showing up, you might want to continue with that. Or maybe if you do a 3% base raise, you drop it down to one and a half. You put the rest inside of a performance based raise. So if you need help with that, just let us know. We can support you with that. And it's definitely a good business habit to get into agreement so that it's expected that raises are on performance, not just longevity of being there. Okay. The other thing, as far as the financial implications of this industry, staffing shortages that we're experiencing, do you have good systems in place or are you just constantly putting out fires all day long? Because if you are hiring someone new and they come in and they walk into chaos, lack of systems, no training protocols, most likely that person's gonna leave unless they're like, all right, let me roll up my sleeves and get to work here. I love a good challenge, but that's where you're gonna receive that revolving door. If it's just constant chaos happening, there's no good system place. It's also possible, like I said, that overwhelm or overworking of your team. If there's constant chaos and putting out fires and that happens long term, you're going to see more turnover happen with your existing team as well. And the last thing to keep in mind as far as how to mitigate some of this turnover and the cost of that turnover. Listen, we can't control what people do, okay? So there's going to be turnover that happens naturally whether we're outgrowing a person or a person outgrows us. And we want to be able to support them to move on, to be successful when it's appropriate. When that happens, you have to expect that the team is going to be overworked and overwhelmed. And we also want to have good structure in place so that we're hiring the right fit with an appropriate time. We don't want to rush that process and we want to be able to be transparent with the team so that we can have a conversation with them about what they're experiencing, what the expectations are going to be and what we're committed to. As far as finding a plus Rockstar Dream Team members to step in and enhance culture and enhance the growth of the company, as well as helping your patients get healthier. Right so are you transparent with your team or are you constantly just smoothing things over and putting icing on poo poo pie? There's a certain level of transparency I think is really important among your team, especially when you're down a person to say team, you know, I appreciate how hard you're working. This is temporary. We're going to get through this. Here's the goal, here's what we're doing about it versus not saying anything at all and having your team just experience that overwhelm that can have another effect on employee turnover and that direct cost of losing team members. So now that we really better understand what got us to this point inside of the landscape of hiring for the dental industry and specifically what those financial implications, whether direct or indirect, are for our practice, we're going to be talking more about how to find the right team members, how to put the right ad out, what to do when you're hiring to make sure you're finding the good fit and really sifting through to find that diamond for your team. So we're going to be talking about that on our next week's episode. We're going to provide you with actionable strategies to navigate the landscape effectively. So step one, assess your current staffing needs, evaluate your practices workload and determine where additional support may be most needed. Don't just put a warm body in there because your team member is like, hey, I'm overwhelmed. I need help. Really evaluate and see if that's needed. The next takeaway for you today is to understand our industry benchmark. Aim to keep your team salaries inside of that 30 to 32% range to maintain healthy overhead in your team. Compensation for financial health for the practice, make sure you're receiving your P and L. You're calculating what that percentage is. That includes payroll taxes. That includes 401k. That includes maybe scrubs. If that's provided for your team as well. All of those are included in the team cost for your practice. This and three, prepare to understand how strategic hiring is really going to support you. Recognize the importance of how a structured approach to recruiting and onboarding is going to support your practice. We're going to discuss that in next week's episode. Okay, so let's recap. The dental hiring crisis is real, but with the right strategies, you can navigate these challenges effectively. To help you get started, we have prepared a practice expense tracker. We mentioned earlier that 30 to 32% is the ideal range for your team salaries. So this practice expense tracker is going to go through every single exp and what the ideal percentage of allocation is for that overhead category. So download it from the Show Notes to benchmark your practices expenses and clearly identify areas for improvement. You want to make sure that you're receiving productive return on investment for all of your expenses, and you can always book a call with me if you need help talking with your CPA to get your P and LS an appropriate time. If you need help calculating those percentages or understanding if you're going in the right direction. The link is in the Show Notes to book a call with me so that we can connect and I can support you with that. So stay tuned for our next episode where we'll delve deep into proven methods for recruiting and hiring your top dental talent and really having that dream team come to life.