The past week has been a struggle for dental practices across the country. On Wednesday, March 11th, 2020 the virus known as COVID-19, or coronavirus, was officially upgraded to a pandemic. Federal, state, and local leaders have been taking appropriate actions – entire school districts are closing, major sporting events have been cancelled or closed to the public, and a state of emergency has been declared across the country. The American Dental Association released a statement on March 16th recommending dentists postpone all elective procedures for three weeks.
It’s difficult to know how to react in a completely unforeseen situation. Some of the alternative measures utilized by other industries to rearrange how work is produced are just not possible in a dental practice. Pivoting to a remote workforce, for example. You may be able to have a few administrative or financial positions work from home, but it’s impossible to have a fully remote workforce for most practices.
With little alternative, dental practices are faced with temporary closure. Some have already been forced to close their doors to non-emergency patients while others are struggling daily to keep their practice open at all.
Practice owners will have a lot of difficult decisions to make over the next few weeks. The decisions made in times of crisis show the difference between being a Practice Owner and a Practice Leader. One of the biggest decisions will be whether or not you choose to pay your team.
Employee wages are typically the largest percentage of your overhead. When expenses are piling up and production is grinding to a halt, it’s tempting to let the stress overwhelm you and drive you to a decision to cut staff costs. Here are some of the most frequently voiced concerns…
Closing the Office
“What do I do if I’m forced to close the office? What happens to my team?”
It’s a scary thought… a virus – or the threat of a virus – can create circumstances that leave you unable to treat patients for two or more weeks. That’s two weeks of lost production. Two weeks of money going out and none coming in. How can you afford to pay employees when no one is working?
First, stay calm and exhaust all your options. Panicking your team will not help matters. Look at what’s available to you. Do you have a contingency fund available to cash-flow your payroll expenses? Does the practice have a line of credit you can draw on? Can you take advantage of the available emergency loan options?
Are you able to take less home for yourself for this period? This is a difficult pill to swallow for many practice owners, but true leadership is putting the considerations of those you lead before your own. You don’t need to financially disadvantage yourself; however, if you can personally afford to take home less to keep your team together, the long-term benefits will be worth it.
Keep in mind, during the time you are unable to operate as normal, some of your other expenses will drastically decrease. For example, if you’re not treating patients, your supply cost, lab fees, and merchant fees will likely drop to almost nothing. Most of your utility bills will be lower. And there may be the possibility of getting a break on your rent or mortgage, depending on your state and pending legislation. If you’re an insurance practice, you’ll likely have outstanding collections that will help you float expenses for a couple of weeks.
Salary Reduction
If you’ve looked at all the ways you can pay your team their full salaries while your office is closed, the next step is looking at paying a partial salary. What can you afford? Would it bankrupt you to pay 80% of their typical wages? 75%?
What about 67%? With the pending legislation, you may be required to pay at least that much for the majority of a 12-week Family Medical Leave Act expansion. The details are still pending, and the bill may change before the law passes, so make sure you are diligently checking state and federal websites for guidance (or consulting with your attorney or HR advisor).
Advancing Pay
“Can I just advance their pay and take it out of future checks or bonuses?”
You can… but it’s not likely the best solution. If you have the cash-flow to pay all or some of their wages now, what is going to come of you deducting it from future paychecks other than team members who will feel like their working for less? Team members are less likely to be motivated to earn that future bonus if they know it’s going to be taken back.
If your funds are sufficient to cover a portion of team salaries – even if it’s just a percentage – try your best to do so without repercussions to their future earnings. Most employees want to be working right now and it’s not their fault if they can’t.
Abusing Paid Time Off During Quarantine
“I’m concerned my employees will abuse the extra paid time off if I pay them to stay home for 2-3 weeks.”
Listen, if you don’t trust your team members to take this seriously and recognize your attempts to keep them and your patients safe… you have bigger issues than just this pandemic.
Let’s assume that you’ve hired professional adults and take them at their word if they’ve been exposed, are exhibiting symptoms, or have been diagnosed. Give them the facts and trust that they will self-quarantine to the best of their ability. Provide virtual CE options to make productive use of the time and keep them engaged with each other by skipping the emails and holding regular video or phone conferences instead.
Government Assistance
“The government is talking about helping people and businesses who lose money because of COVID-19. Will that help me?”
Well… maybe. You’ve heard the expression – don’t count your chickens before they hatch. At this time, it would be advisable to proceed as if you had to work within your capabilities. If an emergency plan and budget is passed, great! Take advantage of whatever you’re eligible for.
Keep in mind that this financial relief may come in the form of tax credits – it’s not likely the government is going to cut you a check to cover your payroll next week. Additionally, there will likely be some very employee-friendly regulations if your practice fits into the under-500-employees category (which most dental practices, including several DSOs, do) so do expect the relief to come at a price.
Alternatively, your state may opt to initiate relief efforts that will come with their own terms and stipulations. Your state labor website should provide information for employers.
The Most Difficult Decision & Last Resort
“I have to close my office and can’t afford to pay my team. I’ve exhausted every option – my practice checking account, savings accounts, line of credit, incoming collections – none of it will cover any portion of my team’s salaries for the quarantine weeks. What do I do?”
One of the worst feelings in the range of human emotion is the feeling of helplessness. It’s a feeling many practice owners are experiencing right now.
If you are truly out of options, one of the kindest things you can do for your team is to be honest. Be honest and give them the tools they need to seek help for their personal finances. Despite what the misinformation floating around social media is saying, unemployment insurance benefits are already available for your employees. It’s a guaranteed benefit in most states. The expansion being discussed at the federal level is to help the states manage and fund the expected increase in unemployment. Even if that were struck from the bill before passing, employees have the right to file for unemployment benefits. This isn’t new.
Some of the guidelines for receiving unemployment benefits are being relaxed, however. If the bill passes, states that accept the federal funding will have to relax their rules and such as waiting periods and the requirement that residents receiving unemployment benefits have to be actively seeking employment.
Hopefully, this will be considered a temporary layoff. When you’re able to reopen your practice, you can rehire your team. To make this an effective solution, do your best to help them apply for benefits and do not contest their application or retaliate against them for utilizing it. You’ll also want to try and rehire your team members at the pay rate they were receiving before the layoff and try to reinstate any PTO balances or benefits they had at the time they were laid off if you did not pay out the accrued time.
Layoff Considerations
Some meetings should be emails, but this is not one of them. This is a face-to-face conversation. Be as compassionate and understanding as you possibly can. Yes, you’re in a stressful situation, but so is the employee you’re letting go. Make sure they understand that this is not a result of their performance; it’s truly a financial decision. Apologize and let them know how much you value their contributions to the practice. If they plan to seek additional employment, commit to being a positive reference and let them know the best way you can be reached. Draft a letter to document the conversation, regardless of whether it’s a permanent or temporary layoff.
Keep in mind, the way unemployment insurance works means you’ll eventually be paying for your employees to draw this benefit. It will come from your account and – unless legislation is passed to provide relief – you’ll likely receive a letter notating the dollar amount drawn and requesting a lump sum payment or notifying you of an increase in your rate.
Make sure this is truly your last resort. While it may seem like there won’t be any jobs available if everyone is forced to close, that won’t last forever. It’s reasonable to expect team members to spend their quarantine period applying for other jobs as the weeks drag on and their finances begin to feel dire. When business as usual resumes, the practices who have taken care of their team will have their pick of the top talent.
On a similar note, you may find your team members return with somewhat less commitment to the practice than they had before. There will be a significant amount of trust lost and you may see some turnover when things start to pick up again.
Every state has different rules surrounding unemployment insurance benefits. Consult with an employment attorney or HR consultant familiar with your state laws and any emergency legislation that’s passed at the state level.
Thinking Beyond the Panic
In some ways, this pandemic is going to change the landscape of healthcare employment. Months, maybe even years in the future, you may find yourself conducting an interview with a hygienist or practice administrator and face this question:
“How did your practice handle the COVID-19 pandemic?”
What will your answer be? Hopefully, you’ll be able to say that you protected your team and patients by closing your office to non-emergency care while doing your absolute best to ensure your team members were financially stable. Hopefully, you can proudly declare that you and your team were able to avoid contracting or spreading the virus and were able to continue serving your community as soon as it was safe to do so. Bonus points if you used the downtime to binge-watch virtual CE courses instead of Netflix.
This is a scary time to be a practice owner. By having grace under fire, demonstrating to your team how much you value them, and thinking of the up-front expense as a long-term investment in your practice you will prove yourself to be a true Practice Leader.