Cliff's Notes

Everyone Wants a Raise! What happens when a long time employee exceeds their market value?

As a business owner or manager, there are some very difficult decisions that you will have to make through-out your career. Some of the hardest involve your team and their compensation vs production (value).

In a different time an annual wage increase was standard business practice, but in todays economy when operational cost are continually rising, there is not much left over to give to the team, and, you will be expected to give again next year. How can you do it? You can’t keep giving. As an example, a good dental assistant (in northern NJ) will command an hourly wage of $18-$25 per hour. If that quality employee stays with you for 10 years that wage may run as high as $35 per hour and be far above market rates. How do you deal with a team member that has been with you since you bought the practice, is over paid, under produces, but the patient love them? Here comes that difficult decision.

Quality is the key to success and a quality team is one of the most important investments your practice can make. The question is how to compensate them, keep them, and help them “grow” with you and the practice?

There are many creative ways to compensate and retain quality team members. But first you need to up-date and complete your employee management program. Team management is part of both your defensive (risk management) and offensive (production) strategies. We all know the risk management issues, they are the ones that cost you money and everyone is try to sell you. The offensive side relates to production and we don’t talk enough about it.

Some of the most successful practices I deal with offer “employee extra’s”. Everything from bonuses tied to production, medical benefits and 401K programs attract and retain quality team members. If you establish realistic incentives as part of your compensation program you will see production increase. As leader you need to motivate your team and compliments only go so far. People go to work for mostly one reason, to make money. And if you want people to help you make money, you have to let them make money. Let them make extra money by incentive programs.

Talk to your financial advisor about establishing a 401k program, one that requires several years for vesting. Matching funds can be tied to production goals. You may be surprised how this small investment will pay off. Now, every team member has something to lose if production is flat.

There is a great employee management program that was just released. Check out the link and please contact me with any questions or concerns.

http://www.dentalpracticepro.com/

May 7, 2016 - Posted by Cliff's Notes Blog | Uncategorized