A key component of any dental practice lies in its team. Not only does the core team allow the practice to run, but individuals hold practice intelligence, as well as skills that can be particularly hard to get in a tight labour market.
Any practice looking to protect the value that lies in their team should consider three key strategies to creating long-term security in your dental professionals:
- Protect your team from poachers: the practice should have strong contractual protections in place with all staff, to ensure that if they depart, they are not able to take staff with them.
- Stop them becoming your competition: non-compete clauses can also help to deter dentists (or other staff members) from starting up their own practice either while employed or after they’ve left. Non-solicitation clauses also act as a deterrent as they ensure the departing staff member can’t leach value out of the practice by infiltrating relationships with clients, suppliers, or partners.
- Stop them wanting to leave: Prevention is always easier than the cure. Stopping your staff from wanting to leave in the first place with a killer retention strategy is the other half of protecting the value in your team.
While there are many ways you can enhance retention, I believe practices will need to invest significantly into providing pathways to onboard dentists as equity holders, or through other innovative approaches such as phantom share plans, or long-term incentives. Not only does this help them to look at the practice as a business, but it also creates strong encouragement for loyalty to the practice.
- Be careful about how you engage them: There has been a significant number of recent cases that mean the approach of engaging dentists through service facility agreements is coming under fire. If you engage any staff in this manner, now is the time to review those arrangements to ensure you are not creating a huge risk for the future.
These strategies are not only relevant to tough times. They are just a few of many key protections you should have in place in any economic environment to ensure you have locked value into your practice and are positioned well should you ever need to transfer that value.
This article is an adaptation of the latest feature on Australasian Dentist Magazine [Nov-Dec 2022] and the original e-publication can be accessed here.
Many thanks to Carl Burroughs @ IDM for the opportunity to contribute to this insightful 2 Part Feature on how to recession-proof your dental practice.
Joanna Oakey, the author of Buy Grow Exit, is the founder and Managing Partner of the commercial law firm, Aspect Legal and host of the successful business podcasts Talking Law & The Deal Room. She brings decades of experience-based insights from working with business owners (and their advisors) on acquisitions, exits, and general commercial legal matters.
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