I know, you are not a retail giant grossing billions in annual sales. But there is a business lesson that can be applied to your practice by observing two different business models.
Then you can decide for yourself. Do you want to be Wal-Mart or Costco?
Wal-Mart runs a burn and churn employee model. They hire very unskilled labor, do 3 days of safety training and rules and then all the training is done on the job by more experienced workers.
Why is this burn and churn?
The annual employee turnover rate for Wal-Mart is 44%, which is standard for the retail industry.
Costco annual turnover rate is a measly 6%.
Additionally Costco employees average double the annual productivity over Wal-Mart.
Do you want Wal-Mart or Costco turnover and productivity in your practice?
What eats profits is staff that is inefficient but “knows” how to do everything your office.
You know the employee. They have been there for years; your patients tell you how great they are. But they drive you crazy because they do not listen and are “know best.”
These types of employees can make or break you as you can’t live with them and you can’t live without them. They cost you tens of thousands of dollars a year and raise your blood pressure.
How much time money and effort does it take to train an employee in your office?
What is the cost of employee turnover?
How much profit is being sucked out of your bank account each year?
Costco pays higher wages and has much better benefits than Wal-Mart. However, higher pay and benefits does not translate into more productivity.
Try it at home, pay your assistant 40% more and see if you get 40% more production from them.
Every employee you have wants to make more money. Just like Wal-Mart employees want to make more money per hour. As of July 2015, Costco paid its hourly workers $ 20.89 and Wal-Mart a paid $11.43.
In my experience, you cannot just pay higher wages and better benefits and translate that into more profit. However, I have experienced, you can provide the right training for yourself and your employees and you wil be more productive and provide better service.
This translates into more profit. Not only more production and profit in the short term but the long term.
Do you need help to isolate where to start training your staff? Take my dental practice X-ray now and find out for sure.
More production and profit allows you to pay a higher wage and offer better benefits, recruit and retain more talented staff and build a growing profitable dental practice.
Staff training also reduces the necessity for staff turnover. It is estimated in retail that is costs 50% of the annual salary of an employee when you need to replace them.
If you apply that to your practice, it will cost you $15,000 to replace a $15 an hour employee. Ouch!
However, if you make an investment in training your staff, not only will you save that expense, you will get a much higher return on productivity.
The fastest and least expensive way in a dental office to get more production per staff members is to increase your case acceptance. This is why I created Engineered Case Acceptance for dentists.
Engineered Case Acceptance can double your case acceptance rate and increase your production and profit while reducing your working hours.
I invite you to take my Dental Practice X-ray and find out how much production and profit you can make.
Take a look at your practice; do you run it like Wal-Mart or Costco? Look at your production per staff member and your turnover and you will have your answer.