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THINKING BUSINESS
a blog by Chris Barrow

Stagflation and the next "crisis" - in dental hygiene



“Just over two years after Covid-19 caused the deepest global recession since world war two, the world economy is again in danger. This time it is facing high inflation and slow growth at the same time. Even if a global recession is averted, the pain of stagflation could persist for several years – unless major supply increases are set in motion.”


“Amid the war in Ukraine, surging inflation, and rising interest rates, global economic growth is expected to slump in 2022. Several years of above-average inflation and below-average growth are now likely, with potentially destabilising consequences for low- and middle-income economies. It’s a phenomenon – stagflation – that the world has not seen since the 1970s.”


David Malpass - President - the World Bank - June 2022


Great - that's all we need - double-digit inflation for the 85% of the UK working population who have never had the experience of paying rapidly increasing bills.


I've said here before that, back in the 70's, (cue rolling eyeballs and raised eyebrows from anyone under the age of 50) we would never have dreamed of knocking on the boss's door and asking for a mid-term pay rise to cover increased costs at home.


We either tightened our belts or looked for better paid work.


Folks nowadays aren't used to the first of these tactics. After all, who wants to be seen dead with an out of date £1,000 communication device (what? you have an iPhone 10 - is there something wrong?), pause their Mindful Chef subscription or cancel a streaming or sports channel?


It seems that, in dentistry, many are exercising the second of these options and looking for better paid work, either within their existing skill set or outside of the profession.


We've all heard of team members leaving to start dog-walking businesses, open coffee shops, move to the country and escape from the Dental Appendix and all it means.


Still more are now falling prey to the advertisements and approaches of those who would headhunt them by offering more pay - notably the bigger corporates who are undoubtedly even more anxious than most to have a full complement of staff and clinicians.


In the last few weeks I've heard rumours of:

  • The £23 UDA (that's for the associate, not the practice);

  • The return to 50% for associate fee per item sales;

  • The £60 an hour dental therapist;

  • The golden hello at all levels.

"It's not always all about the money" I hear frequently.


"People stay in a job because they feel appreciated, have a career pathway, work for an organisation or business that have strong core values, a great vision, an active CSR programme, lots of fun - and pay good wages."


I agree 100% that all of these characteristics have to be present when your business is going from good to great, but let's also be realistic.


You cannot pay for the 60% increase in your gas and electric bill, the £2.00 a litre for your diesel or this year's summer staycation with vision, mission, roles and goals.


I've been talking to a client over the last few days who have implemented a hugely successful dental plan conversion over the last 2 years. The patients in a previously full NHS practice have joined the plan in droves, partly because of the "dental desert" around them and also because the practice does things right.


However, a significant number of the hygienists who worked at the practice have been tempted away by more money elsewhere - there is a hygiene recruitment war going on in their postcode. Demand for dentistry is up and the supply of hygienists/therapists is down.


Look at these numbers, shared with me this week:


Practice A = 1689 plan patients = 3378 hygienist appointments required per year (plus any private patients paying)

Available appointments per year = (1300) – set leave (not including sick days) 1200 appointments per year

SHORTFALL OF 2178 APPOINTMENTS PER YEAR, increasing by 200 each month we sign 100 patients


Practice B = 1663 plan patients = 3326 hygienist appointments required per year (plus any private patients paying)

Available appointments per year = (2028) – set leave (not including sick days) 1872 appointments per year

SHORTFALL OF 1454 APPOINTMENTS PER YEAR, increasing by 200 each month as we sign 100 patients.

Each appointment is 30 minutes


Next available hygiene appointment - December 2022.


Now before you start, we discussed this scenario on my weekly client webinar last night and some of the suggestions were obvious:

  • stop taking on new plan patients now - you cannot sell tickets for the gig if there is no band;

  • ask your low-producing associates to pick up their scalers and help with the catch up;

  • accept that the £30 an hour that you have been paying your hygienists is too low and that you need a rapid escalation in pay to attract new people - in other words take part in the wage war that is going on in your area;

  • accept that you may have to run at break-even or a loss for a while.

Can you think of any other advice to give this client?


I see this as a dramatic example of a phenomenon that most of you reading this post will have to face in the weeks and months ahead.


I've said it before and I'll say it again:

  • You are going to have to put the wages/fees up for your best people;

  • You are going to have to pass that extra cost on to your patients very quickly;

  • If you have a dental plan that can only be adjusted annually, you are going to have to increase your fee per item prices by an extra amount to compensate for the lack of plan profitability in the short term;

  • You are going to have to watch your back - headhunters are planning to entice your best team players away;

  • You are going to have to become a headhunter.

Tough love - sorry - but times like this haven't been around for a very long time.


I'm going to pull the age card - I was there in the 70's and I know what it takes to survive.










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