Turnover Leads to Opportunities

Looking at an unemployment rate that has been stuck at more than 9 percent for over two years, it would stand to reason that the employment market is static. Little more than 100,000 jobs are being added each month to an economy that employs more than 130 million people.

Yet, the labor market is far from static. Total employment in the United States is turning over at a rate of more than 3 percent per month. That means each month, more than 4 million people start a new job and more than 2 million people voluntarily leave their job. This may seem like taking one step forward while taking one step back, and in terms of lowering overall U.S. unemployment, it is.



At the same time, every month, 4 million hiring managers are looking at their businesses and the economy and deciding they would be better off hiring someone. But when they make that decision, it’s not about just replacing a warm body; it's an opportunity to change the direction of their workforce.

“A few years back, when someone resigned, HR pulled out the old job description and started to replace them. Now when that same person leaves, a manager’s first thought is more likely to be, ‘How should this role change,’” says Rob Romaine, president of MRINetwork. “At a time when many departments have a difficult time adding positions, reexamining every job description as it opens up can be the lowest friction way to reshape a workforce and with proper planning, large changes can happen relatively quickly.”

In the professional and business services sector the monthly turnover rate is closer to 5 percent, which means that with a clear workforce plan in place, a company’s entire focus can be altered in less than two years.

“Backfill workforce planning requires more foresight than just eliminating one position, while adding another. However, it maintains the continuity of business operations, lowers separation costs, and avoids potential morale or public relations issues,” notes Romaine.

In a backfill workforce plan, the target for where the organization is heading needs to be defined, but the path on how to get there must remain dynamic—changing based both on which positions open up, and what candidates are available. The plan itself should be less about creating a pre-defined organizational chart and more about the capabilities and capacity of the target organization.

“When someone leaves the company, you start by looking at what capabilities that person had which are required immediately,” says Romaine. “Then you can work with a search consultant to understand what talent is currently available to fit your basic requirements and which additional capabilities of the target organization you may be able to include in the role.”

Working with an experienced industry-specific search consultant can bring needed expertise to both formulating and implementing a backfill workforce plan.

“Redefining positions as they open up can lead to only the priorities of the day being addressed,” notes Romaine. “Working with a search consultant to create a workforce plan with a long-term horizon makes larger, more substantive changes possible.”

You Can Make a Difference

With the economy still struggling to recover, middle income patients are also struggling with a way to pay for much needed dental care. Luckily, the dental community is responding. The number of “free dental care” events seems to be increasing each year. These events are designed to help out members of the community who simply can’t afford dental treatment. Most of the patients who are treated don’t qualify for Medicaid, but they still can’t afford insurance or necessary treatment.

Vermont recently held a successful event where 340 patients were treated in a single day. To find out more about this event please read the article which was published by the ADA: http://www.ada.org/news/5986.aspx. I am also proud to say that the community where I reside, Roanoke, VA, has held a similar annual event for the past four years. To view more about this organization please visit their website: http://www.roanokemom.org/.

In these hard times, it is great to see how dental professionals can come together and make a huge difference in the lives of people in their local community. Are you doing something similar in your community?

Written by Marcia Patterson, Regional Account Executive/ Dental Recruiter. Contact Marcia at 540-491-9118, or mpatterson@etsdental.com.

Landing a Buyer for Your Practice: (Part 3)

This is part 3 of our 3 part series.
Click Here for Part 1.
Click Here for Part 2.

The following are three real life examples of why “Being Prepared” is so important when selling a practice.

Example 1: (Get an Appraisal)
Unprepared: The Practice Owner did not have an independent appraisal of the practice prepared before she started talking to interested parties. She thought she was saving money. Since most buyers need to obtain financing, banks and other lending institutions won’t loan money without an appraisal.

Prepared: The Practice Owner got an independent appraisal of her practice done prior to speaking to any interested parties. She recognized any buyer would need to get their own appraisal, but the appraisal gave both her and prospective buyers a realistic expectation of the selling price. She quickly sold her practice to another Dentist interested in moving to her community.

Example 2: (Prepare Historical Numbers and Metrics)
Unprepared: The Practice Owner had not prepared the financial information necessary for a potential buyer to make an informed decision.
Examples:
• Monthly, Weekly, Daily production numbers.
• Mix of procedures. Mix of Fee for Service, Insurance, or Medicaid.
• Hygiene production. Procedures referred. Growth opportunities.
• Number of active patients.
• Number of new patients.

All the owner knew was that he wanted to sell the practice for $500,000. He spoke with a number of potentially interested parties, but could not move ahead because they didn’t have any specific information they could use to make an informed decision.

Prepared: The Practice Owner tracked all of this information monthly. He prepared reports summarizing last year’s production information. A potential buyer realized the Practice Owner was referring out all of his endodontic and many of his pediatric cases. Since the potential buyer realized he could immediately increase production by $150,000 a year, he purchased the practice at the asking price.

Example 3: (Don’t Quit Before You Sell)
Unprepared: The Practice Owner wanted to retire two years ago, but his retirement funds shrank dramatically. The owner came to work begrudgingly and let the practice atrophy. There were a number of potential buyers. When they looked at the practice they saw it was disorganized and dated. Production had declined and key staff members had left, sensing they did not have a future there. The practice eventually sold but for $350,000 less than it would have sold for three years ago.

Prepared: The Practice Owner recognized he would not be able to retire for three years. Rather than cutting back, he realized that this was the most important three years of his career. He didn’t make major investments in equipment, but he repainted and updated the waiting area and operatories. He landscaped the outside. In addition he worked to grow his practice recognizing that its sale price was determined by the last three years production. He worked with a consultant and gave the staff incentives to increase production. After three years he sold the practice for $350,000 more than it was worth three years previously.

Written by Mark Kennedy, Owner/Managing Director of Executive Talent Search (ETS Dental, ETS Vision, ETS Tech-Ops). To find out more, call ETS Dental at (540) 563-1688 or visit us online at www.etsdental.com.

Get Noticed On Job Boards

Once upon a time, you could hand deliver a resume and even get interviewed on the spot. Those days are long gone. Personal interactions with hiring managers have been replaced with emailing your resume and applying through online job boards. So, what can you do to stand out when you are applying online? Here are a few tips:

• Attach your resume as a Word document, if possible. Often companies will invest in software that can harvest Word documents and input your information into their database more easily making your information more likely to come up in a search.
• Let us know you are relocating! It can be something as simple as including in italics “Relocating to Florida Summer 2011” under your current address or just adding a blurb to your objective. Recruiters and hiring managers are not mind readers. You may miss out on an opportunity simply because someone thought you had applied for the wrong position otherwise.
• Tell us you are bilingual. Being bilingual is a HUGE asset in a lot of markets! Your resume needs to tell what languages and your level of fluency. Many of the job boards will also have a field for you to enter this information in as well; take the time to ensure that this is completed properly because often this gets read before a hiring manager ever even takes a peak at your resume.
• Be sure to include all of your contact information on your resume. This includes: phone number (make sure they are working numbers), and email address. I understand that we may not always call at the best time and may need to schedule a time to speak later, but if you sincerely want to work we need to be able to reach you.
• Sticking with contact information; make sure your email address is appropriate. Personally, I love the cheesy work related emails like “2thfairy@...” or “floss4u@...” because to me that shows some personality. If that is not your style, so be it; play it safe and create an account using your name. I do not care how sexy, beautiful, big, small, or anything else you are. We see your email address before we see anything else about you and it needs to relay a level of professionalism.

There are many factors that actually go into getting a job and these tips just barely scratch the surface of the topic. However, these tips may help you to tweak your own information and get your information noticed which is an important first step to getting to that new job. Good luck in your search.

Written by Tiffany Worstell, Dental Staff Recruiter, Nationwide. Contact Tiffany at 540-491-9112, or tworstell@etsdental.com.

Landing Your Top Associate Candidate (Part 2)

This is part 2 of our 3 part series.
Click Here for Part 1
Click Here for Part 3.

Example 6: (Answers to basic questions)
Unprepared - The Practice Owner did not prepare to answer important questions that would be asked by the Dentist Candidate such as: Compensation, Hours, Potential for Buy-in, How new patients would be assigned, Schedules, Would more staff be hired, What materials are used, Plans to upgrade equipment… The Associate candidate chose another opportunity because “the practice seemed to have its act together”.

Prepared – The Practice owner took an hour to brain storm all of the questions he would ask if he were a candidate. He spoke with a recruiter to find out what questions she hears frequently. The Associate candidate chose this practice because the owner “really seemed to be on the ball”.

Example 7: (Below Market Compensation)
Unprepared - The Practice Owner did not research current Associate compensation plans. During an interview with a promising Associate candidate the owner “threw out a figure” that was 30% to 50% less than the candidate could make somewhere else. The call ended shortly thereafter and the Practice Owner was frustrated the candidate didn’t return his calls.

Prepared. – The Practice Owner researched current Associate compensation by reading Dental Economics and speaking with an ETS Recruiter. He quickly realized that although he is busy, he was not at the point he could afford a new Associate. For the next six months he worked on improving his recall system, which increased revenue allowing him to start looking.

Example 8: (Involving the Staff)
Unprepared - The Practice Owner did not prepare his staff that an Associate candidate was coming to interview. The Associate candidate showed up for the interview but sensed the staff was shocked and surprised that the Practice Owner was looking. The Associate Candidate chose another position due to the uncomfortable office environment.

Prepared – The Practice Owner discussed his plans to seek a new Associate Dentist long before he started interviewing. He asked for the staff’s input as to what he should look for in a new Associate and got them excited about what this could mean for them.

Example 9: (Budgeting)
Unprepared - The Practice Owner did not prepare a budget to see if he could afford a new Associate. The Owner interviewed an Associate candidate. Both parties were very interested. Then the owner realized he needed to add staff, add equipment, add operatories, add patients and transfer some of his patients to the new Associate. After two or three months of putting off the Associate candidate, the candidate found another opportunity.

Prepared – The Practice Owner worked with his CPA to see what he had to do to afford a new Associate. He realized he had to add two operatories and increase his new patient numbers before he could take the leap. It took two years but he found a great Associate who was impressed by the updated office and new marketing plan which added 30 new patients a month.

Example 10: (Space Constraints)
Unprepared: The Practice Owner did not think about space constraints. Although the practice had healthy cash-flow it only had one additional operatory. The practice continued to operate 8-5 Monday through Friday. Over the course of the two years, the practice added then lost three Associates. All left because they couldn’t produce as much as they could elsewhere using just one operatory. The practice lost time and money because of the turnover.

Prepared: The Practice Owner turned the space constraint into a selling feature. He prepared his staff to move to a six day, 11 hour daily schedule. The selling point for the new associate was that he could work from two full operatories and get four days off a week.

Example 11: (Sell the Community)
Unprepared: The Practice Owner was not prepared to sell the community. He owned a highly successful, long-established practice in a community with a struggling local economy. The school system was rated poorly. The owner interviewed multiple Associate candidates who seemed very interested in the practice, yet they all turned him down at the last minute.

Prepared: The Practice Owner spent time with each Associate candidate to give them a complete overview of the practice and the long-term opportunity. He also took them around to community to show them the nicer neighborhoods. He also talked with them about the variety of private schools in the community that had outstanding ratings.

Written by Mark Kennedy, Owner/Managing Director of Executive Talent Search (ETS Dental, ETS Vision, ETS Tech-Ops). To find out more, call ETS Dental at (540) 563-1688 or visit us online at www.etsdental.com.

Waiting for Growth but Finding Top Talent

How long will it take for the labor markets to return to normal? It will depend on any number of factors, foremost among them: what is normal?

In a recent poll of MRINetwork recruiters asking what was holding managers back from hiring, only 11 percent cited sales not yet rebounding. The leading cause of employers not hiring was that efficiencies found during the recession have allowed companies to do the same with less staff (28 percent).

“The depth and length of the downturn forced organizations to make structural changes which have sent productivity to record heights,” says Rob Romaine, president of MRINetwork. “Today, in a period where market growth often remains minimal, the most direct way to create the earnings improvements investors are looking for is to push for further efficiencies.”

While expanding headcounts and vacancies from resignations were the two top reasons for job openings, according to the MRINetwork Recruiter Sentiment Study, top grading of the workforce came in third, with 14 percent of recruiters claiming that it is the primary cause for openings that they see. Top grading means identifying the “C players” on a team, going out, and replacing them with a top performer.

The number two reason employers are holding back from hiring, according to the survey, is that while sales have rebounded, managers are meeting resistance in getting authorization to fill their open positions (27 percent).  “Managers are having a hard enough time today just getting approval to fill vacancies, let alone creating new positions,” notes Romaine. “This makes top grading one of the only ways to increase output in highly talent-reliant businesses without changing the headcount.”

Top grading is possible today in a way it hasn’t been over the last many years. The mantra in the depths of the recession was that employees were hunkered down, not wanting to risk falling victim to the “last in, first out” mentality at a new job. Yet, while layoffs do continue today at many firms, they are more frequently motivated by shifting business strategies rather than financial necessity. 

After hitting its low in January 2010, the U.S quit rate—the percentage of the workforce who voluntarily leave their job in a given month—has risen from 1.1 percent to 1.5 percent. While still short of the 2.2 percent average between 2004 and 2007, this recent growth lends further support to the idea that for the right opportunities, candidates today are ready and willing to change jobs. In fact, the number of people leaving their positions voluntarily has exceeded the number laid off or discharged since January of this year.

“While productivity has surged, consumer and business spending has only risen modestly. Until the demand of the marketplace reaches parity with the capacity of the current U.S. workforce, we aren’t going to see a surge in headcounts,” notes Romaine. “But many of the smartest employers are taking this opportunity to find and recruit a select few top performers who will enable their companies to seize the opportunity and grow when that parity is reached.”