Ep 2. What’s Going on with the Labor and Staffing Market?!
We don’t need to tell you that the job market is strange right now. In fact, it’s unprecedented. And unless you’re very lucky, you’ve probably experienced it in your dental office whether it’s in terms of staff leaving, never coming back after the pandemic lockdowns, inflation and rising wages, or having difficulty hiring. So in this episode, we wrap our minds around these odd market dynamics with some eye opening statistics and what this means for your dental practice (0:59), look at what you can do right now to find and keep great staff while maintaining high production and profitability, including administrative staff (8:48), dental assistants (14:19), and hygienists (16:23).
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Questions From This Episode
Why is it suddenly so hard to find dental staff?
It's a combination of factors stacking on top of each other: a wave of people reconsidering their careers and relocating during the pandemic, supplementary unemployment benefits that in some cases matched or exceeded take-home pay, rising inflation eating into real wages, and large corporations aggressively raising entry-level pay and offering signing bonuses. Practices aren't just competing with the office down the street anymore, they're competing with every major employer in the area.
Should I just raise wages across the board to compete for entry-level staff?
Not necessarily uniformly. Entry-level wages are the ones under the most direct pressure from corporate competitors, so it's worth considering hiring one more experienced, higher-paid person instead of two entry-level hires, since a genuinely skilled hire can often outproduce two less experienced ones. Track collections divided by number of staff as an efficiency check, that number should hold steady or improve as you add or upgrade staff, not decline.
How do I invest in a dental assistant's certification without losing them to a competitor right after?
Work with an employment attorney to draft an agreement tying any tuition or certification funding to a minimum commitment period, typically two to three years, with a repayment obligation if they leave early. This lets you support genuine career growth, which is a real retention tool on its own, without fully absorbing the risk of funding someone else's higher-paid hire down the street.
What do I do if I genuinely cannot find a hygienist no matter what I try?
Widen the search radius, since hygienists are often licensed to work anywhere in the state, and consider advertising in denser areas where people may want to relocate. If that still doesn't work, bringing in an associate doctor can temporarily cover hygiene-adjacent capacity in many states, since an associate can legally work solo where a hygienist alone cannot. The two things not to do are trying to do the hygiene yourself long term or simply letting those patients go unseen.
Is outsourcing certain positions, like insurance verification, a reasonable staffing solution?
For narrowly scoped, non-core functions like insurance verification or collections, yes, that can work well. Avoid outsourcing anything central to office function or the patient experience, like reception. Whoever you outsource to should be tracked on productivity and performance just as closely as an in-house employee, and replaced or brought back in-house if they aren't delivering.
Episode Transcript
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I normally try to think up a scenario or a question to set the scene at the start of these episodes, but I'm going to change course a little this week and just start by asking directly: what is going on with the labor and staffing market? In about 30 years in this industry, I have never seen more difficulty finding a hygienist, an assistant, or administrative staff, you name it. That's what we're covering in this week's episode of Dental Business Rx. I want to go over the actual statistics behind this issue, then look at what you can do right now to keep your office properly staffed.
My name is Jeff Blumberg, and I'm your host, and I'm the Chief Operating Officer here at MGE. Let's jump into the numbers. I did a presentation on this at our Owners Conference, our annual event for graduate clients, back in May, since this has been building since essentially the start of the pandemic. I want to give you a point of comparison, since I'm recording this in August of 2021, is this situation getting better or worse compared to a few months ago?
First, there's a survey from the National Federation of Independent Business that tracks small business optimism and how difficult it is to fill open positions. On optimism: back in May, their optimism index was at 99.8 percent, fairly high, recovering from a pandemic dip. As of the end of July, it was at 99.7, a slight dip, but not significant.
Then job openings. Back in May, when I first presented this graph, it showed the highest number of job openings ever recorded, over 8 million openings nationally. As of this past month, that number is at 10.1 million, up by 2.1 million. And you've probably seen the headline: 10.1 million job openings against only 8.7 million people actively looking for work. We're now in a situation where there are more open jobs than there are people looking to fill them.
How does that translate to small business specifically? Back in May, 44 percent of small business owners surveyed by the National Federation of Independent Business reported having a position they simply could not fill, they'd advertised and gotten no applicants. As of July, that number rose to 49 percent. Nearly half of small businesses in the country currently have a position they cannot fill. This tracks with what we're hearing anecdotally from our own clients, and keep in mind, MGE clients are sharp, they know how to hire and onboard staff well. We're still hearing: can't find administrative staff, people no-showing scheduled interviews entirely, trouble finding a hygienist, trouble finding an assistant.
So why is this happening? There isn't one single cause, it's a handful of factors compounding each other. Here's one that doesn't get talked about as much: a huge number of people have genuinely reevaluated their life plans since the pandemic began. More people have relocated within the US over the past 16 months than in years prior. People are staying home, working remotely, homeschooling, or simply moving. A recent survey of US workers under 40 by the Washington Post's Schar School found that nearly one in three had seriously considered changing their occupation or field entirely. A lot of people are actively reconsidering what they want to do.
Then there's the factor most people default to discussing: supplementary federal unemployment benefits, active since roughly April 2020. That supplement was originally 600 dollars, later reduced to 300 dollars a week, and was set to expire September 6th, though about 24 states had already opted out of the additional 300 dollars by that point. But consider the math: someone earning 15 dollars an hour, roughly 600 dollars for a 40 hour week, may, depending on their state, be receiving close to that same amount through combined state and federal unemployment. In some cases, someone can genuinely earn close to as much staying home as they would coming to work.
I'm not saying everyone in that position is choosing not to work, and I'm not going to wade into the broader debate about it, it's a genuinely complex issue. But pretending it isn't a contributing factor would be naive. Combine fewer available workers with the demand surge from reopening after shutdowns, and you get a classic supply and demand imbalance: less supply, more demand, prices, in this case wages, go up. Same as coffee: less supply, more demand, price rises. Basic economics, just applied to labor right now.
Making this more complicated, larger businesses have entered this fight aggressively. You're not just competing against the practice down the street anymore, you're bidding against major employers. Chipotle raised their minimum wage to 15 dollars. Companies like Royal Farms and McDonald's have offered 500 dollar signing bonuses. A McDonald's location here in the Tampa Bay area actually made national news for offering 50 dollars just to show up for an interview, and reportedly nobody showed up at all. Pull up a list of companies raising wages right now, banks, big box retailers, major employers across the country, and it's a long list. Target, if I'm remembering correctly, is even covering associate college tuition at select partner schools.
So you're not just competing with the dentist down the street, or the optometrist across town, or the doctor sharing your building, you're competing with every major employer looking for entry-level and skilled labor alike. Given that, what do you actually do about it? You can't absorb the same kind of financial hits a Walmart or a Target can. Let's get into position specific solutions: administrative staff, dental assistants, and hygienists, plus a couple of broader points to close with.
Starting with administrative, front desk positions. I genuinely don't know how this will play out long term, whether the federal supplement expiring pulls more people back into the workforce, or whether the Delta variant's impact complicates things further and the supplement gets extended. I could be wrong either way, and depending on when you're listening to this, you'll already know how it played out. But here's one thing I do know: if I'm going to pay more for something, I'm going to expect more in return.
One factor I haven't mentioned yet: inflation. I don't have the exact current Consumer Price Index number in front of me, but last I checked it was up around 5.1 percent. Without getting deep into what that means broadly, your dollar has less purchasing power, and so does your employee's. You've probably noticed this yourself in groceries or gas. Your staff is experiencing the exact same squeeze, and they need more income just to keep pace. Related tip while I think of it: if you haven't raised your fees recently, it's worth considering a modest increase, maybe around 5 percent, so you're not pricing yourself out of being able to retain good staff who are themselves getting priced out of goods and services.
On salary expectations specifically: what people are now asking for may push your hiring into a different tier of candidate than you're used to. Here's what I mean. For a truly entry-level position, say a new receptionist with no dental experience, many large corporations are now offering 15, 16, sometimes 20 dollars an hour for entry-level work. If unemployment benefits alone are paying someone close to 15 dollars an hour with no commute costs, I'm not necessarily going to offer 16 or 17 dollars to compete for that same entry-level candidate, especially factoring in training time.
Entry-level wages are the ones facing the most direct upward pressure. But someone already earning 22 or 23 dollars an hour, wages vary by region, keep that in mind, an excellent scheduling coordinator, maybe without dental experience but with healthcare background, or a genuinely skilled insurance coordinator who knows their field well, that person is often worth as much to your practice as two entry-level hires combined. Headcount doesn't automatically equal productivity. One highly competent person can regularly outproduce two less experienced ones.
So if market pressure is pushing you to raise pay for a role you used to fill at 13 dollars an hour, it may be worth considering hiring one more experienced person at closer to 22 dollars who can do the work of what might otherwise take two entry-level hires. This isn't a perfect solution, and it doesn't help address the broader entry-level hiring crunch, there will always be people wanting to break into dental admin work, but from a practice efficiency standpoint, it's worth genuinely considering.
One statistic worth tracking here as an efficiency check: collections divided by total staff count. If you're collecting 100,000 dollars a month with five staff, that's 20,000 dollars per staff member. You want that ratio to hold steady or improve over time as you train people up. If you hire a sixth staff member while collecting 100,000 dollars, you'd eventually want to see collections trend toward 120,000, not stay flat, and certainly not drop. If it drops to 80,000 after that hire, that's a separate problem worth addressing directly. Higher earners in the 22 to 26 dollar range tend to be less dramatically affected by this entry-level wage spike specifically, inflation still impacts them, but not to the same degree as the entry-level bonanza happening right now.
Now, dental assistants. What we've been advising clients to do is incentivize career growth directly, we were doing this before Target announced their tuition program, for what it's worth. Say you have a newer assistant, maybe hired initially as a sterilization assistant or floater breaking down and cleaning rooms. Give them a visible career path toward becoming an EFDA, an expanded function dental assistant. Once they've hit certain benchmarks for longevity and productivity, you can help fund certification, X-ray certification where your state allows it, and eventually help finance EFDA training for someone who's proven themselves over time. It makes them genuinely upwardly mobile within your practice.
The obvious risk: you help fund someone's path to becoming an EFDA, and shortly after they tell you an office down the road just offered them 5 dollars more an hour. This is exactly where an employment attorney earns their fee, and you should have one you can reliably consult, the couple thousand dollars a year you might spend on that relationship can save you considerably more down the line, especially if an agreement isn't drafted properly. What I'd recommend: have an attorney draft an agreement tying any education funding to a commitment to work for you for a set period, typically two to three years, with a repayment obligation if they leave before that term is up. Push upward mobility for your assistants regardless, it's a genuinely strong retention tool when structured properly, and it's a great career path worth supporting.
Now, hygienists. Of every position, I've heard more difficulty finding hygienists than any other role. Here's an interesting example: we have a client in Southern Virginia who historically had a terrible time finding associate doctors, since he's in a fairly remote area with limited associate availability nearby. Then the pandemic hit, and people started leaving major metro areas in large numbers, suddenly he had no trouble finding associates at all, but started struggling with other positions instead. Similarly, we had a client in Upstate New York who couldn't find associates, and we suggested advertising in the city, since plenty of people were looking to leave a one bedroom apartment they'd been stuck in for months. That worked, people wanted space, a yard, somewhere different.
Hygienists specifically have been more of a genuine puzzle. First thing I'd try: incentivize career growth the same way as with assistants, some kind of CE support plan, though I'd wait until they've proven themselves and hit clear benchmarks before investing, and I'd want a similar retention agreement in place. Certification or expanded capability can also translate into higher pay for them directly, which helps with retention on its own.
But say you're practicing somewhere like Tampa, where I'm based, and you simply cannot find a hygienist locally. In most states, a hygienist licensed in that state can practice anywhere within it, so widen your search. Look at hygienist listings across the state, consider reaching out through a hygiene journal or publication, or an email list that hygienists actually read. You might find someone practicing in Miami who'd genuinely welcome relocating to the Tampa area. Same logic applies wherever you are, if you're in Fresno, try advertising in LA, you never know who's looking for a change.
But say you've tried all of that: widened your search, offered CE incentives, and you're still coming up empty. Here's a bit of historical context that's relevant. Back in the early 1990s, in the Chicagoland area, there were five dentists for every one hygienist. If a practice's hygienist called in sick or took a week off and they needed a temp, nine times out of ten that temp was another dentist covering hygiene duties, not a hygienist.
So if I genuinely could not find a hygienist, I'd look at bringing in an associate doctor instead, since associates have generally been more available than hygienists lately, and it solves a couple of problems simultaneously. In many states, a hygienist legally cannot operate alone without a supervising dentist present, some states allow it, but many don't. An associate doctor can work independently since they're fully licensed. It's not always the ideal long term structure for that associate, I understand that, but here's how it can play out.
We typically advise clients to maintain a hygienist to doctor ratio of around one to one, or one to one and a half, two at the absolute maximum. Beyond a ratio of two, the doctor ends up spending so much time on hygiene exams and running between rooms that there's no real time left to properly present treatment, it can become genuinely counterproductive, gloving and degloving multiple times an hour in some cases.
So say you're a solo practice working four days a week with one hygienist also working four days, and you need to add roughly two more days of hygiene capacity immediately. Bring in an associate doctor with the understanding that as they settle in, they'll also pick up smaller procedures or overflow dentistry you don't have time for yourself. A couple months in, that might look like two days of hygiene coverage and two days of associate dentistry, maintaining that healthy one to one ratio: your four day hygienist, your four days as the owner doctor, and an associate splitting time between hygiene coverage and associate work.
Meanwhile, you keep actively searching for a hygienist, and eventually you might land on two hygienists and two doctors, or a part time associate alongside a full time hygienist. I've genuinely seen this structure work well multiple times. What doesn't work: doing the hygiene yourself long term, that's not a real solution, or simply letting those patients go unseen. You have to actively solve for it.
A couple of closing points. First, limited, targeted outsourcing can help in specific cases. Be selective about what you outsource, I wouldn't outsource anything central to office function or the patient experience, reception, for example. But something like insurance verification or collections can work well outsourced, there are companies that handle this efficiently. Whatever you outsource, track that vendor's productivity and performance just as closely as you would an employee's. If they're not delivering, replace them or bring the function back in-house.
Second, as you go through hiring and turnover during a period like this, take training seriously. Once you've identified someone who's genuinely going to work out and you want to keep them long term, make sure you're actually allocating real time to train them properly, and that they clearly understand what they're being trained on. Group training on foundational processes, how a new patient flows through your practice, how a treatment plan gets presented, helps keep the whole team aligned and cohesive, which matters even more during a period with this much staffing turnover and transition.
Anyway, that's more than my usual two cents, and I think I actually stayed under thirty minutes this time, though I don't have the timer in front of me to confirm, since we do advertise thirty minutes or less. One of these days I know I'll blow past that in forty two minutes or less. I hope this helps. If you need any assistance, give us a call at 800-640-1140 for a free practice consultation, or find out more about MGE at mgeonline.com. Thanks again, and we'll see you at the next episode.