Kiera walks listeners through the science of giving raises without breaking the bank or falling into the feel-good trap. She gives three steps to implement around the topic of raises:

1. Know your numbers

2. Raises are earned; they’re not automatic

3. Communicate with clarity and boundaries

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Transcript:

Kiera Dent (00:00)

Hello, Dental A Team listeners. This is Kiera. And today I am excited to talk about something of, can you give out a raise and can you actually afford it? Like, how do even know there's got to be like some better model than just like a hope, a wish, a prayer? Like how often do I do this? And I thought it just be an awesome podcast to connect with you, to share some valuable tips and to really just empower you to make these decisions confidently, competently, and with ease. So welcome to the Dental A Team Podcast. I'm Kiera. I love dentistry. I love helping you have a better life.

 

a better quality of life, more happiness in your life, more ease, more joy, more flow, truly doing life and business on purpose. We're here about the yes model. So you can say more yes to more things in your life. So that's about you as a human being, making sure that you are fulfilled, that you are flourishing. stands for earnings and profitability and S is for systems and team development. Truly, truly, truly growing you, evolving you, making sure that you have all these pieces in place so that when you're able to live life on purpose, have your business on purpose and truly just

 

magnify all of this. So today, raises aren't just something that are feel good move. Like this isn't something of like, ⁓ hey, like I feel good. Let's just give you a raise or I do it out of desperation. They're honestly a financial decision that truly can impact your bottom line. It can impact your practice. can, and like with hygienists coming through and dental assistants and the economy, it's like, how do we do this? And so I wanted you guys to just see kind of like three steps to know, can I give these raises out? How do I do this confidently? And what's kind of the flow?

 

without risking cash flow. So this is something that we're about. love doing this. Races don't, when they're done right, they increase retention, they boost morale and they elevate their culture. Like that's really what it's about. They're super helpful and they have to be timed and strategic as well. So it's not something of like, let's just willy nilly this, which I used to do. used to say, I don't have a set plan. Like it's just whenever now I'm like, wow, let's actually have a plan for this. Let's go through this. And I want to break this down into three simple steps for you.

 

So first steps before we ever give out the raises are we need to know our numbers. So payroll should be 30% of your collection. So if you're collecting $100,000 payroll, and that includes all fringe benefits, our 401k, everything, should be 30% or less of your total collections. Now that's across the board, it does not matter geographically. Some specialties are a little bit higher, a little bit lower, but the goal is we want it around 30%, or in some offices, they're around 27%. So again, I'm here for like great cases, great...

 

We want to take care of our team members, but we want to know how that's going to be there. So that's what we're looking for. And we want to make sure that we're profitable. So our goal is to have a 50% overhead of that 30% is payroll. So team members, are you hearing? The bulk of our monthly costs should be paying you. That's what it is. After that, our 50 % overhead, 30% doctor pay, 20% profit. That's what we're aiming for. That's what we strive for. That's what we try to get our offices to. So this way, we're not just giving raises haphazardly because

 

There's practices out there that like, let me just give them a raise, but their collections are not there. They don't have the money to do it. They backslide, their profitability is not there. And the reality is we've got to know where we're at right now on payroll. So the only ways to have that is we either decrease costs. So like maybe we can cut labor expenses that we don't need, or we need to increase our production or our collections.

 

So it's really our levers that we have to deal with in this scenario. So when you look at it, before we go in like, oh, we need to get everybody raises, you've got to run the numbers to see where are we at now and where would we be? So I love to have, when I'm running numbers with offices, I love to have a conservative. It's like, hey, this is my bare bones. This is what I can have running my practice. Then I have my like middle tier, like this is where we basically are at right now. And then I love to have on the higher end, what do I have if I'm giving raises out and hiring new people? What does that look on the high end?

 

because then I can look at my total costs and I can see how much do I need to actually add in? What do we need to produce to be able to afford this of a practice? And I look at these three areas on my spreadsheet constantly. I call it my monthly costs. I have my conservative, my middle of the road and my advanced. This way it helps me see. Now, after that, we're going to have our raises based on performance and value. So we don't want, so this is step number two, raises are earned, they're not automatic. I understand that.

 

There are things with inflation, there are different pieces, but the reality is, long as what I do is I look around every year, we have it set up to make sure that what we're paying out for payroll is in the higher end of what is within our area. So you can actually go look on Indeed, you can look on Glassdoor, you can look on other areas to see what is the average pay for dental assistants in our area? What's the average pay for hygienists in our area? What's the average pay for billers, office managers, schedulers, treatment coordinators?

 

And our goal and our practices is to be in the top percent of those. We're not maybe going to be the highest, but we are going to be hopefully in the top 90 % of that. So that way you know, are we in line? Are we not in line? What do we need to do? And then what we're going to do from there is we're actually going to build out job descriptions. So we have an entire thing of dental assistants and all the pieces where it's tiers. So like a basic assistant. So let's say our range for assistants is 18 to $25. Well, at the 18, here's the range of what the assistant needs to do.

 

At the 20, this is what the assistant needs to do. At the 22, this is what they need to do. And at the 25, that's a lead assistant. So it scales it up so you're able to see like, okay, if I want a raise, this is how I'm going to grow in the company to then know what I need to do to be able to get a higher pay. I think this is so valuable for offices and it's also valuable for team members because now team members can look to say, if I want a raise, this is what I need to take on. This is what I need to learn. It's not just like, well, I've been here for two years. Give me my raise.

 

it's no take on more responsibilities because we are going to pay you but it's based on the experience that you bring to the practice as well. So with that, these are going to be performance based raises. And it doesn't mean that like just because someone hit that 22 that I have to give it to them right now. What it can mean is like annually you can look at it, see where your assistants and your team are at front office every position and see who qualifies for raises and who doesn't. Now when I'm running my projections and I'm looking at my costs,

 

A lot of times I will run my assistance on the high end or if I know they're like on my high end of those monthly costs, I'm going to look to see, all right, what do I have today? Now, if they went up one bracket or two brackets and I wanted to pay them this amount because they're doing it, what does that impact my overhead and what do we need to do? Because hopefully as people are expanding on those tiers, they're actually able to take on more, they're able to produce more, they're able to do more within the practice to make the practice more profitable or to grow.

 

So that way it's linked. So it's the tier raises are based on performance and value, making sure they're adding more value to the practice. And this way we can have it. And we have all these broken out for every single position. We call them tiers in it. And it's really beautiful because now for me, I know the high end of my assistants will be this amount. The high end of my hygienists will be this amount. And I'm not sitting here vacillating on these decisions. And then every year we just go through and assess and adjust as needed. But we run the numbers to make sure it makes sense. And then we do an end of year potential review of all of our people.

 

to see who gets raises and I can then put that into my projections for the next year when I'm building out our block schedule, building out the projections on the practice. All of that can make it really, really ⁓ special and also accurate to know what are we going to do and what do we need to hit in order to keep our overhead and our metrics in line. Hopefully that made sense because I feel like it's really like one, know your numbers, two, have your raises tied to performance and value, but based in the projections that you need to have within the practice.

 

And then after that, step three is to communicate raises with clarity and boundaries. So raises do impact your morale. Like, so you've got to make sure communication is key and you don't want it to be where we're giving one raise to an assistant, but then we don't give it to someone else. And then people talk and they get really angry. We also don't want to raise up all of our hygienists just because someone got a raise when they're not qualifying for it. So I like to have reviews with our teams. I like to review where they're at, where their compensation is at, what they're doing.

 

This is all where team leads can also put it into play to see how is this team member doing? How are they going? What's the next level? And then being transparent in what's needed to move from tier to tier. So having those one-on-ones, showing people, hey, what are your goals? And I like to find out team members when I'm having my one-on-ones, what's their personal goal? What are their life goals? And how can they move up to the next level? Now, if you're newer to business ownership, you might not know how you can do these raises. So that's really where I love my conservative.

 

my middle and my high end, so then I can look to see what do I need to produce? What do we need to collect to be able to make sure that we can actually afford this? So when we have offices, I have a lot of offices, like don't make decisions about this on emotional decisions. This is not a zone where we want to like, my gosh, well, Sarah came and talked to me and she's going to quit unless I give her a raise. Well, what that does is it sets a standard across the board for all the rest of your team members to see that. And they're watching, your team's watching to see what are you going to do? And I would rather,

 

like have a hard conversation and let them know like, I'd love to give you a raise. The reality is we know the process, we know the tiers. I know that there was another opportunity that came for you. I'd love to keep you. I'd love to find a solution. I also need to be fair with the rest of our team and I can't adjust policy just for one team member. So this way you can have like truly structured review time. You can not have off the cuff, like someone comes in like, I want a raise. And I'm well, what am I supposed to do? The team now knows how they can get raises and everything's very transparent.

 

very clear. And this way it's very clear for all team members. It's clear for you. It's clear is kind. So ⁓ practices, we have this for dental offices, I'll be honest in dental team. This is something Britt and I have been working through. We have a lot of positions in our company that we have never, ever, ever worked with. So we're very naive of like, okay, well, how much should this person get and how like, what should we have them do to qualify for raises? But for you, you're really lucky.

 

We've worked in the dental office. We know all the tiers. We know what they should be adding in. So you don't need to be like I am in our company where I'm like, how do I give these raises? What should people be getting? What does it qualify? We literally have it broken down for you, easy for you. You can adjust it. And then we just check in your area of what you should be doing for your raises in different areas to make sure you're paying in that top 90 % of your area. So hopefully that helps you with like know your numbers, tie your raises to values and have it tiered and then have set times where we actually review it and communicate with clarity.

 

I will not be doing raises throughout the entire year. We have it, we assess it, we know when we're going to roll out our raises. We talk to team members, we let them know, so it's very clear, it's very transparent, it's very open with them. And this way, you guys don't have to have struggles. And I will tell you, offices that do this honestly use their numbers, their alignment and their structure for raises. It's not based on emotion, it's not based on willy-nilly. They literally can walk in confident, like no, yes, yes, no. Team knows.

 

And that just makes it a lot easier. Then team members aren't like me where I was always like, okay, so it's my one year. Are they going to give me a raise? Are they not going to give me? I don't really know. It was always awkward. And unless we went and asked the doctor, we didn't get a raise and I hated it. So don't make it that way. Like make this where it's something easy for your team, easy for you. You make it something where everybody wins. Everybody knows it makes it easier for your office managers. They're not in question. They can hold the line for you. Everybody wins through this. So this is truly where we want you guys to look at your

 

Like action items are look at your raise process and see do you actually have a process and what can you do to make this where it's clear, confident? For me, I review all numbers in September and October and I build my budget for the next year. That's when all raises go through. I do it really much like corporate, so I know who's getting raises, who's not. We have a lot that are production based within our company, so the more they produce, the better off they're going to be. I don't wanna have to worry about those, but I still need to assess and just make sure are our bases accurate, are the pieces there?

 

Britt and I worked through this for a good solid chunk of time where we're reviewing it, we're looking at it, we're making sure it fits within our numbers of what we need, and then we know what we're able to do. So review it, see if you have it, and if you need help, email us, [email protected]. These are tricky numbers, these are tricky pieces, these are like, how do I know? The tiers are amazing, I'm happy to help you with that. So email in [email protected]. Truly, this is where you can elevate in your leadership. This is where you can be more clear.

 

This is where you have hopefully a little bit more clarity of how do I give raises? How do I know if I can afford it? Giving you the numbers as your guide, giving you the tiers, giving you the parameters within your area, and then having set times where you look at it, you project it out, having your monthly costs. So again, we're looking at multiple different lenses to see yes or no. So we're not emotional, but we're truly directed.

 

This is something I love. I love giving owners ⁓ clarity. I love being a fairy godmother for you where we literally can answer all these questions. You can call us. We'll pick up the phone. We'll help you out. This is what it's like to be part of our consulting. If we can help you reach out, this is what we love to do. And if you're ready to reward and retain your team the right way, reach out. Let's help you out. And as always, thanks for listening. I'll catch you next time on the Dental A Team Podcast.