How to Ask for a Raise During an Economic Downturn
Economic forecasters expect to see a recession in the later months of 2023.1 The dental profession may feel the negative impact of this economic downturn, forcing them to be more competitive and downsize their teams. Being aware of the nation’s economy and the financial health of the dental practice can help determine when and how to ask for a raise. Forbes suggests three steps to help save one’s job during a recession which may be equally pertinent before asking for a raise.2
1. Do a thorough self-assessment.
- Are you indispensable? Do you offer solutions to problems and help solve issues? Do you take on extra projects and perform excellent quality work? Do you improve the bottom line of the practice? If you were the dentist, do you see yourself as an indispensable team member?
- How can you step up your game? Do you regularly go above and beyond the minimum job requirements and responsibilities? Do you bring value to the practice by adding to production and collections? How do you contribute to the practice’s overall success and the team’s growth? What else could you do to step up your game?
- Do you show up? Do you arrive on time, prepared to work, or are you frequently tardy? Do you call out sick excessively? Do you keep personal and company time separate (i.e., do you check your cell phone during your break time or while on the clock during company work hours?) How can you show up regularly as an indispensable team member?
2. Research pay scales in your area for your job and responsibilities.
Review the two resources below for salary surveys to see how your current pay compares to others in your area. If you receive a fair salary for your position in your area, THANK YOUR DENTIST and be grateful for a good job during an economic downturn. If there is room for increased compensation, work on ways to increase your job performance and the profitability in the practice so you can show the value you bring.
onetonline.org/find/quick?s=Dental…Click to open link in a new tab…
- select your Occupation
- scroll down to Workforce Characteristics – Wages & Employment Trends
- enter your zip code and select “GO”
- switch from annual wage to hourly wage
dentalpost.net/salary-survey/…Click to open link in a new tab…
When considering compensation, don’t forget to take into consideration other benefits you receive that add to the value of your entire package, such as:
- Vacation, sick, PTO, and holiday pay
- Medical and dental benefits
- Retirement plan
- Uniforms
- Continuing education
- Paid lunches and other office benefits
- Flexible unpaid time off policies
- Bonuses
- Gifts
The items above should be considered in addition to one’s pay when evaluating compensation. If your employer doesn’t already, ask for a compensation calculation of all the benefits you receive to review your total compensation package beyond your hourly rate.
You may consider moving to another office advertising a higher hourly pay rate. Before moving, consider all aspects of your compensation and the environment and culture in your current office. If you see an ad that seems too good to be true, it probably is. Don’t be quick to jump ship because the grass is not always greener.
3. Other Considerations to Keep in Mind
If you are analyzing your KPIs and see high production numbers, that’s wonderful, but keep in mind that the higher production, the higher the overhead, which is the cost it takes to run the business.
Dental office overhead is anywhere from 65-75% of collections.
For example, a practice that collects $1,000,000 requires a minimum of $650,000-$750,000 just to run the business. Dental office overhead is high compared to other types of businesses because of the cost of equipment and supplies. Equipping and stocking a dental office treatment room can range from $150,000 to $200,000. This does not include build-out costs and other working capital costs such as marketing, payroll, consultant, legal, accounting, website, rent, etc.
Dental office salaries are one of the highest overhead categories.
Prior to 2020, dental office salaries were about 25% of overhead, and since COVID, they have been inching up to 30% and more.
Dental collections and other expenses.
Collection numbers are also important in evaluating the health of a dental practice. The recommended collection ratio goal is 91-98%; obviously, the higher, the better.
Example: A practice producing $1,000,000 with a 91% collection ratio collects $910,000. Overhead runs about $650,000-$750,000, leaving $160-260k for the dentist to pay off dental school loans, build-out, equipment, and other practice debt. One million dollars is a lot of money, but many costs are associated with producing that amount in a dental practice.
If your dentist is paying off their dental school loans, they often have loan debts of $200,000 to $400,000.
Costs for specialized dental equipment are often thousands to tens of thousands of dollars.
Example: iTero scanners are $20,000 – $30,000 to purchase in addition to the monthly subscription fees. Many dentists incur years of payment plans to afford the high cost of equipping a dental office.
Current Economic Downturn
Finally, the economy is suffering right now. A recent survey revealed that 41% of Americans said they’re changing their financial behaviors to prepare for a recession.3 The fast-food company, McDonald’s, and many technology companies have already begun layoffs.4 5 Hospitals are also struggling and beginning layoffs.6 Some dental offices are seeing a downturn in production as patients are more conservative with their discretionary income when scheduling elective dental treatment. Patients are even putting off preventive and recommended treatment due to finances. Will layoffs hit the dental industry? No one can say for sure, but if the economy worsens, this author wouldn’t be surprised if we see layoffs in the dental industry.
During an economic downturn, if you have a good job, work in a positive culture, and are being paid fairly, seriously consider staying where you are to help build a successful practice and be rewarded for your efforts.
WHAT CAN YOU DO?
1. Help fill the schedule; work on open time, cancellations, and no-shows – think about ways to help keep the schedule full. Increased production and collections mean more money for raises and bonuses.
2. Is hygiene producing three times their compensation? Keep the hygiene schedule full, keep reappointment rates up, and consider reactivation campaigns to target overdue patients.
3. Is everyone on board to help keep the schedule full? Share any open time for that day and the entire week in the daily huddle. Offer open hygiene time to restorative patients who are in the office and do not have a current hygiene appointment scheduled. Offer same-day restorative diagnosis in hygiene.
4. Help to figure out how much it takes to keep the office running every year. Then schedule daily goals. Make sure production is hitting monthly goals. When the schedule is consistently making or exceeding goals, there is money for raises or bonuses. Share the daily goal during the huddle, get everyone involved, and celebrate when it is met!
5. Share your ideas with your dentist to expand services in the practice or ways to cut costs without sacrificing quality patient care.
6. Is your AR under control? Are you collecting on the date of service? Regularly follow up on overdue accounts. AR Ratio goal should be no more than 1.0. This means you should not have more than 1 month of your average monthly production in accounts receivable. The lower, the better.
To calculate:
Total Accounts Receivable /Average Monthly Production = Accounts Receivable Ratio
For example, if your AR is $100,000 and the dental practice produces $100,000 per month on average, the AR Ratio is 1.0. If your AR is $150,000, then your AR ratio is 1.50. If your AR is $50,00,0, then your AR ratio is .50
7. Are dental benefit claims being sent in daily with all the required documentation (i.e., X-rays, IOP, and screenshots of clinical notes) and followed up regularly at 30, 60, and 90 days?
If, based on your research, there is room for improvement in your salary and you are doing all these things, request a meeting with your dentist at their convenience, and submit your request in writing along with reasons that substantiate your request.
Regardless of the outcome, thank your dentist for taking the time to consider your request. In some cases, even if they want to, the economy and financial health of the practice may prevent the dentist from being able to offer you a raise. If you do not receive a raise, ask how you can improve in the future and how you can help the practice’s growth, and then work toward those goals. You may also ask if the dentist will consider another meeting in 6-12 months.
If you do not receive a raise, a bonus system in your practice may be another alternative to earning more money. A bonus system allows the team to be rewarded financially when the practice is successful. It is a win-win for everyone. If your dentist doesn’t currently offer a bonus system, ask if this is something they are open to.
Finally, congratulations if you receive a raise or bonus, especially during economically difficult times! Make sure to express your appreciation to your dentist and continue being an indispensable team member!
1. Davidson, Paul, “Are we headed for a recession? More economists think a 2023 downturn may come later than
they thought,” USA Today, February 27, 2023, https://www.usatoday.com/story/money/2023/02/27/2023-recession-
start-later-growth-stronger/11340981002/…Click to open link in a new tab…
2. Stahl, Ashley “3 Steps that will Save your Job in a Recession,” Forbes, November 9, 2022,
https://www.forbes.com/sites/ashleystahl/2022/11/09/3-steps-to-will-save-your-job-in-a-
recession/?sh=351db33c5f5c…Click to open link in a new tab…
3. Hardy, Adam, “Nearly Half of Americans Think We’re in a Recession, and They’re Saving Up to Survive I,”
Money, March 6, 2023, https://money.com/recession-poll-saving-money/…Click to open link in a new tab…
4. Wiener-Bronner, Danielle, “Wall Street Journal: McDonald’s closes offices and tells employees to work from
home ahead of layoff,” CNN Business, April 3, 2023, https://amp.cnn.com/cnn/2023/04/03/business/mcdonalds-
layoffs/index.html…Click to open link in a new tab…
5. De Avila, Joseph, “The Companies Conducting Layoffs in 2023: Here’s the List,” The Wall Street Journal, March
29,2023, https://www.wsj.com/articles/the-companies-conducting-layoffs-in-2023-heres-the-list-11673288386…Click to open link in a new tab…
6. “High expenses, job cuts — hospitals are still struggling in 2023, “ Advisory Board, March 13, 2023,
https://www.advisory.com/daily-briefing/2023/03/13/hospital-expenses…Click to open link in a new tab…
About the Author
Debbie Jones, RN MN, is the practice administrator for her husband Mike Jones’ General Dental Practice in Newport Beach, CA. She received her MAADOM in 2022, loves learning, and has attended every conference since discovering AADOM in 2018. She is the Vice President of the Dental Spouse Business Network (DSBN) and leads the DSBN Growing Leaders’ Book Club.
