How should I pay my RDH?

Owner dentists regularly ask me about the different types of payment arrangements for RDHs commonly in place across the US. More specifically, they want an opinion on the best option the prudent option.

If only it were that simple. Two key things determine the prudent option:

Quality of the clinician you manage to secure

Your practice philosophy

Salary, hourly and daily rate (SDHR)

SHDR pay structure provides various degrees of financial security for your RDH, but often comes with drawbacks.

Unlike a corporate environment, there is not a lot of room for advancement within the typical dental practice, and the RDH knows this. Thus, loyalty runs cold unless you have done your job creating a top-notch work culture. Otherwise, you can guarantee your SHDRs are the most aware of opportunities available around town, and are likely pursuing those that seem to come with greener pastures.

We see more complacency among this group, who are often not challenged by significant financial incentive to continually improve their skills, in turn improving their production, and thus yours. They are less likely to happily work to fill appointments when the schedule crumbles, or go that extra mile in customer service to protect your patient retention rate. After all, it is not their business.

You are vested in your business. They have no personal stake, and their future income is not within their control. And, they all know that other payment options (and the opportunity to make more) are out there if they have what it takes.

Newly graduated, they are often completely unaware how much a progressive practice depends on their skills to ‘produce.’ They are often looking for the security of competitive hourly or daily rates, or a salary especially while they grow their clinical skills, etc.

Often, the goal of the RDH is simple: To do what they have been trained to, to do it for as long as their backs, necks and hands hold out, and/or, until they have fantasies of doing bodily harm to the employer who neither values nor respects them with not providing adequate time in the schedule for various types of patient appointments, charting, a lunch break, or time to use the lavatory without getting further behind, among other things.

An across-the-board drawback of SHDR in a production-oriented business is the continual expectation of annual raises. It is hard to determine their worth upon reviews, unless you are tracking their production.

Thus, SHDR is best suited for:

The RDH who is winding down and wishing less stress day-to-day

The RDH who is lacking, or who hasn’t yet acquired strong clinical & chairside skills

The non financially-driven RDH

The RDH employed (or contracted) by a dentist lacking in progressive dental business acumen

One who does not see that RDH production drives the dentists’ production directly

One who is not willing to acquire (or invest in development of) a producer, and pay what they are worth

Base + commission

For the strong, business-minded dental practice owner who understands that RDH production drives dentist production, this is a more prudent option, assuming you have found, or are willing to develop, a producer.

Commission is incentive. Generally, the commission in this agreement is roughly thirty to thirty-five percent of production of specific services (defined by the practice), on top of a livable base salary, much like many salespeople. The commission in this arrangement can be as low as fifteen percent and would rarely exceed thirty-five percent on top of a base salary.

I discuss ‘commission on production’ only, not commission on collections. Collection is simply out of the control of the RDH, so to pay based on collection is about as unfair as it gets, unless you maintain a staff who maintain a ninety-eight (or more) percent collection rate. Say that collection staff member(s) leaves your practice what then?

Make prudent choices. Value your clinicians. Value your reputation as a clinical professional. Pay your RDHs in a manner you would deem fair for yourself were you in their shoes.

Something else to consider is that the livable, but small base salary comes in handy when the RDH schedule for the day has crumbled. Rather than send them home, they can work on other things, including:

Filling the empty time slots

Personal confirmations of upcoming appointments in the book

Chart audits to identify overdue re-care and/or non completed treatment plans

Sharpening tools

Organization and ordering

And much more, while still collecting an acceptable pay for the day

Any arrangement involving commission removes completely the need for raises. Commission increases as their skills clinical diagnostic, disease management, chairside, treatment plan acceptance rate, customer service and your fees increase. Thus, they control their own income potential. This arrangement is a B-rated option for those with strong clinical and chair-side skills (“A” being a pure commission structure), and a desire to achieve the best in their careers, including financial reward. Thus, this arrangement is not for everyone.

When considering putting an RDH on any sort of commission agreement (which is all about production), consider treating them like your associate dentist or your partner(s). Give them an assistant.

Like you, RDHs can operate out of one or more rooms at once, seeing more patients and producing more for your business. An assistant for hygiene (just like for the dentist) can take X-rays, clean rooms, clean and sterilize instruments, assist with the actual exam (for instance, noting pocket depths in your management charting software), confirm appointments, contact the VIP list when the schedule falls apart, etc.

You get these tasks done at an assistant rate, while getting more production out of your skilled RDHs, since they should see at least a third more patients daily if you allow appropriate time slots for various appointment types.

Pure commission on production

Typically, you are looking to pay a flat thirty to forty percent and as much as fifty percent of a clinicians daily production depending on your specialty and demographic.

What is the math?

Assume the RDH is paid a daily rate of $240, four days a week. That equates to $30 an hour multiplied by eight hours and four days a week times 50 weeks or $48K annually. The RDH would need to produce $720 (three times the daily rate) on a daily average before a pure commission agreement becomes to their benefit. They would need to improve their skills, and increase their production to then see the incentive/commission pay off. You now have an RDH delivering better quality care to your patients, and thus, you have more work in your chair.

Every day, more RDHs are benefitting from a commission-type pay structure. Their raise in pay above the average daily rate in the area will make them feel far more valued, improve loyalty and drive their dedication to continual self-improvement and the improvement in the culture of your business.

Working commission requires strength. With a commission-type agreement, RDHs with self-doubt, weak clinical skills, and/or poor chairside manner and customer service will not do well. They will not be your producers. They may or may not then be a good fit, if yours is a highly production-driven business. For a pure commission structure to work, a strong perio program must exist. This program will be the core driver of production for your RDHs, and thus for you.

Consider the options. But first, consider the individual you have brought into your practice, and the philosophy/culture of your practice, which will help you select the prudent option with regard to RDH compensation.

When the RDH schedule crumbles

“The schedule crumbled, and I was sent home.” “Weather happened and our office is closed or closing early.” Should they be paid?

I hear this question/concern almost daily from RDHs, in person and in various online groups, and of course from owner dentists whose staff are questioning, or complaining, about the policy in their office. Even worse, often there is no clear policy certainly not in writing and the dentist owner makes decisions based on his or her mood at the time.

In the light of fairness, the answers in these situations are simple.

Salaried: Paid whether they stay and do other tasks, or are sent home.

Hourly/Daily rate: They may or may not be paid (Read further).

Base + commission:  Paid the base whether they stay and do other work, or are sent home.

Pure commission: Sent home, unless willing to work to fill the schedule, and even then, commission only as usual (Read further).

Expanding on that, hourly employees cannot expect any guarantee of hours. When they accept an hourly job (RDH, associate, assistant, FD anyone who is hourly), they accept these risks. Not working? No pay. But, if they are not sent home, and are in the office working on whatever needs to be done, then they are working to keep your business going, and should be paid their contracted hourly rate. An option is to negotiate a non-clinical rate for days or chunks of days when non-clinical work is being performed, but I can tell you, this doesn’t go over well. After all, nurses are not paid less during the hours they doing administrative duties why then, should the RDH be subjected to this?

When paid on pure production, the RDH is likely making significantly more than the average salary in their area anyway, so they really should just enjoy the day off if sent home. Or, they stay, work to fill the schedule and accept whatever commission they can produce or not.

***Consult your attorney on any and all contracts for employee and independent contractor agreements/contracts.