In the previous post of this series we discussed staffing costs and how to analyze them, along with questions to ask yourself if your costs are below market averages. In this post, we will review the staff cost analysis and address questions to ask for costs above the market average.
As a quick refresher, for the sake of this entry I am defining staff costs as wages and benefits paid to the entire practice staff (front office, assistants, and hygienists) and I typically adjust staff costs for family members or other employees being paid through the practice that wouldn’t be qualified as “practice staff” (i.e. adjustments for, personal assistants, marketing personnel, janitorial hours, etc).
After we have adjusted your staff costs to achieve a true “Apples to Apples” comparison, you are then able to see if your numbers fall in line to the market averages of 31%. If your numbers are above this level some important questions to ask yourself are:
- Is my practice building for growth? In practices that are growing, it might make sense to be slightly overstaffed for the time being to retain good employee’s that will be needed in the future.
- How qualified are my employee’s? In order to fulfil one or two front office roles it is not uncommon that a practice needs to hire an additional employee to make up for some skills that might be lacking in their current employees. A common example of this is when one employee is good at dealing with patients and another is good at dealing with insurance and billing. If there isn’t the need for two full time front office employees sometimes a practice needs to “overemploy” to fulfill the needed job duties.
- Do I have long term employees? Long term employees that have been with a practice for many years tend to be paid on the higher side of industry averages. Many times this additional cost is worth it for a doctor to know they have a good employee in that position.
- Do I have job duties delegated to the proper levels or do I have too many hours worked? In many instances doctors will try to please staff members by offering additional hours that may not be needed. Examples of this are having staff come in when the office is closed or having hygienists work recall if their schedule is open. Many times having time available to staff to catch up is a good thing, but it can go wrong when nothing is being done or getting accomplished on these days. If this type of a scenario is needed in your practice, having the employee work on marketing efforts is a great use of their time.
- Am I over compensating my staff members? If you think this might be the case, please ask your Fluence manager for our latest salary survey and ask that they go over it with you.
After realizing that your staff costs are above the market average it is important to address the reason for this. No two practices are the same so what might be a high level in one practice might be an acceptable level in another. The true purpose of this is to find the reason costs might be high and if needed, to make any necessary adjustments.
Please tune in next time when we review advertising costs in your practice.