It’s true that dental practices are seeing their income squeezed in this time of slowed economic growth and higher interest rates. This equally affects the members of the team, particularly those employed, who perhaps do not have the opportunity through circumstance to work more, harder or longer to make up their household income. Concerned staff are more likely to have an increased sensitivity to their own family situation, and possibly be pushed to seek what is sometimes a short-term monetary gain elsewhere – rightly or wrongly. From the practice perspective this nevertheless adds to the stress of staff shortages.
We’ve asked Johnny Minford, Commercial and Development Director to explain the affect that The Chancellor, Jeremy Hunt’s Autumn Budget has on dentists and their practices.
Take it away Johnny
The Autumn Statement from the Chancellor announced two matters which affect dentists. Both may be seen good for individuals, but one may cause their Principals a sleepless night or two.
The Announcements
The reduction in employee National Insurance by 2% immediately puts some extra take home pay in the employees’ pockets, with no cost to the practice owner as the employer- this will be very welcome. However, it may not stop someone thinking about changing their job, as all and every job will have an increased take-home rate, so every job remains comparable. Whether or not they switch will be related to other aspects of their employment.
The other announcement was an increase in the national living wage. This will affect Principal dentists as there will likely be roles in the practice which are at this minimum wage level, which will directly increase the cost of employment. Additionally, there is always a knock-on effect on the rest of the team as wage hierarchy will have to be maintained at least at some level. Given that around 20% of the total Gross income on average is spent on salaried employees, this is a major increase, and it will need to be shouldered either by the Principal or the patients. Many on the patient list will also be struggling, and the price lists to them may be quite inelastic, and increasing them may have a fall-out on the practice. If its an NHS practice, without the ability to increase the treatment rates, the increasing cost will inevitably fall on the Principal.
Again, this increase in minimum wage effects all jobs in all industries, so it will not stop an employee leaving for another job elsewhere, and giving an extra headache to a Principal who finds themselves with gaps in the team and not enough chairside time to generate the extra Gross required.
Retaining staff in the team is a different problem from affording the extra costs, and comes down, as it has for generations, to job satisfaction as well as pay and conditions. The professional nursing bodies continue to talk about their members searching for appreciation and the ability for career progression as being at least as important. As nursing is more and more promoted as a career rather than simply a job, this is something which will be attractive to those entering that profession, and those considering changing jobs.
With practice income held back, many practices will find it difficult to respond to the strain on their employees’ personal financial situations. This is often unspoken, and in the vacuum of avoided conversation, employees are much more likely to search for another job or leave the profession all together.
Final thoughts
Although currently facing insecure times, now may be an opportunity to discuss the consideration of the team’s performance, have open conversations across the team and reassess its shape, involving especially the vulnerable employees and those who potentially the practice vulnerable. Despite caring for your team and looking after them and their personal development, if they aren’t aware and understanding of the situation, you as the Practice Owner could end up worse off.
Here to help
If you have any questions or concerns about the announcements made in the Autumn Statement, our team are here to help. To speak to one of our Specialist Dental Accountants, please call 0151 348 8400.
