Dental practices across the U.S. are reporting about 20 percent lower patient volume for 2020 compared to 2019, and practice owners may need to consider reducing payroll overhead cost for 2021, according to the California Dental Association.
Employee wages and benefits account for 25 percent to 30 percent of dental practice collections, according to the CDA. The organization recommends monitoring other costs before reducing employee wages and hours, but has released tips should practices have to do so.
Eight tips for practice owners:
1. Communicate. Financial decisions that affect employees can greatly influence morale. Practice owners should explain the reasoning behind decisions, convey to each employee that the decision was not made easily and express that all other expenses were closely evaluated. Employers should have individual conversations with team members so questions can be answered.
2. Lead by example. Practice owners should let staff know if they have taken a wage reduction.
3. Consider each of the three options for reducing labor costs. These options are layoff, furlough and compensation/hour reduction.
4. Document the business and financial reasons for selecting the employees subject to the layoff, furlough or wage/hour reduction. While the financial effect of the pandemic is obvious, the reason for who is selected is not always clear to team members. Document the decision with reasons like job classification and tenure rather than performance or other subjective reasons.
5. Provide the required documents for employees to seek unemployment insurance.
6. Give sufficient notice of the change to employees, preferably via written notice.
7. Don't reduce compensation for any employee below the minimum salary-level thresholds or the applicable minimum wage. Inform employees if the reduction in hours will affect their eligibility for benefits.
8. Before making any employment reduction, seek legal counsel.