Key Factors for Hiring an Associate in a Dental Practice

As a dental practice grows, you may consider hiring a new associate to help with the increased workload.

Bringing on the right associate can lead to increased profitability, a smoother transition when the owner is preparing for retirement, and an enhanced ability to manage a growing patient base.

However, making the wrong hire or doing so at the wrong time can have negative consequences.

Factors to Consider When Hiring a Dental Associate

Here’s what you need to know if you’re considering hiring a new associate.

1. Understand Your Goals

First, determine practice goals that may require an additional association. Common reasons include:

• Reducing Chair Time: Dentists looking to reduce their working hours may find that an associate helps maintain the practice's level of service by covering the clinical hours the owner wishes to cut.
• Building an Exit Strategy: For owners approaching retirement, hiring an associate can serve as a long-term transition plan, allowing the associate to gradually take over the practice.
• Managing Growth: A practice that is experiencing an increase in patients may need an associate to manage the workload effectively, especially if new patient inflows exceed the owner’s capacity.

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2. Key Metrics for Growth

Certain practice benchmarks should be met to ensure that the addition of another dentist will benefit the practice, and not split profits prematurely. The practice should ideally:

• Have a consistent production of approximately $90,000 per month.
• Be acquiring 40 to 50 new patients per month to sustain the additional workload.
• Have a base of 1,800 active patients to ensure long-term stability.

3. Involve the Team

The success of a new associate often hinges on the support of the existing team. Staff members should be included in the process, understanding their vital role in the onboarding and integration of the associate. Ensuring that the team is on board will make the transition smoother and help the new associate succeed.

4. Assign Patients

A clear plan for patient allocation is needed when introducing a new associate to the practice. Common strategies include dividing the existing patient base and assigning new patients or referrals to the associate. Associates should also be encouraged to contribute to practice growth by generating new patients through referrals and community involvement.

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5. Physical Space and Scheduling

Before hiring an associate, the practice needs sufficient physical space to accommodate a second dentist. If expanding the physical office is not feasible, adjusting hours (e.g., one dentist working mornings and the other afternoons) can help make better use of available resources.

6. Ensure Compatibility

A successful working relationship hinges on compatibility between the owner and the associate. Goals, work habits, and patient treatment philosophies should be in alignment.

For example, younger dentists often come into the workforce with significant student debt and may have a strong desire to be busy and productive. These factors should be considered and discussed thoroughly before making the hire.

7. Employment Options for Associates

When hiring an associate, practice owners can choose from several employment structures:

• Employee: Associates work full-time, with the practice covering overhead costs, providing a salary, and often offering bonuses based on production.
• Independent Contractor: This option is more flexible, with compensation typically based on the associate’s production. However, independent contractors may lack the same loyalty to the practice as full-time employees.
• Owner: Some associates enter the practice with the intention of becoming part-owners. This creates a long-term commitment but requires a detailed agreement on profit-sharing and responsibilities.

8. Protect Your Practice

No matter how an associate is employed, there must be a contract in place. The contract should cover all aspects of employment, including compensation, employment terms, renewal conditions, and termination clauses. Non-compete agreements are also commonly included to protect the practice if the associate departs.

9. Slicing the Pie: Financial Considerations

When hiring an associate, the financial implications are significant. Beyond salary, there are costs associated with payroll taxes, insurance, and benefits, which can quickly add up. Practices should conduct a break-even analysis to ensure they can cover these costs without negatively impacting profitability.

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Things to Consider

Hiring an associate can be a powerful way to grow a dental practice, create a succession plan, or manage a growing patient base. Carefully considering your goals, understanding the financial and operational impact, and choosing the right employment structure can help practice owners make informed decisions that lead to long-term success.