LMT Exclusive: 2010 Wage Report Challenging Economy Hits Home

Charts:

• Survey Demographics
• How Lab Owners are Responding to the Economy
• 2010 National Average Hourly Wages
• How's Business: Q1 2010 Compared to 2009
• 2010 Average Hourly Wages By Laboratory Size
• Average Hourly Wages for Non-Technical Positions
• How Respondents Pay Their Technicians
• Wages for Beginner Technicians Are Up
• More than Half of All Lab Owners Gave No Raises in 2009
• Over-the-Shoulder Training Still #1
• Digital Technology: Impact on Personnel Needs
• Rising Healthcare Costs in Past Two Years Prompt Coverage Changes
• Larger Labs Offer Better Benefits Packages

"I would like to give raises and pay more, but in this unstable economy I can't get locked into a higher payroll," says John Hickey, owner, Aztec Orthodontic Laboratory, Tucson, Arizona, echoing the sentiments of other respondents to the 2010 Wage Survey.

In response to the challenging economy, more than three-quarters of our respondents have implemented cost-cutting strategies that impact their personnel. About half of them have frozen pay raises, cut work hours, and reduced or eliminated overtime. In addition, about one-third gave lower raises and lower year-end, production, sales or merit bonuses in 2009 compared to 2008.

While 38% have laid off technicians and 12% have cut salaries, many are doing everything they can to ensure the livelihood of their staff members. "We've made a commitment to our employees to continue to provide them with full-time positions, and no reduction in pay. We've continued their insurance benefits and paid holidays and vacation benefits, and are very cautious about authorizing overtime. This is the second year we've had a pay freeze, only because we have had to freeze our fees to our doctor-clients to stay competitive. In the meantime, our technicians are grateful for their full-time positions," explains Philip Stoner, CDT, owner, Positive Impressions Dental Lab, Murrayville, Georgia.

On a positive note, 48% of survey participants did give pay raises to some, if not all, employees in 2009, with the average wage increase being 6%; 40% also gave production, sales and/or merit bonuses at the end of last year, averaging 4.5% of the employee's salary.

Top Wage & Benefit Trends

1) Hourly Wages for Beginning Technicians are Up: On average, technicians with up to five years of experience are making $0.94 per hour more than they did in 2008, with the biggest wage bump-ups in the following positions (click here for additional information):

• Ortho, all around, up an average of $1.83 per hour
• Ceramist, all around, up an average of $1.69 per hour
• Ceramist, stain and glaze, up an average of $1.63 per hour

(Editor's note: for the 2010 survey, we changed and added some "years of experience" categories so we cannot compare 2010 and 2008 wages of technicians with more than five years of experience.)

2) Entry-Level Office Managers Earn More than Novice Technicians: Even though wages for beginner technicians have increased, their office manager counterparts are still earning more. Office managers with up to two years of experience earn an average of $13.94 per hour; in comparison, the average hourly wage for technicians in all positions with the equivalent years of experience is $11.58.

3 The Highest Earners: As in the past, all-around ceramists are the highest-paid technicians nationwide; here's what they earn on average per hour broken down by experience level:

• Zero to two years of experience, $13.45
• Three to five years, $18.20
• Six to 10 years, $22.12
• 11 to 15 years, $27.64
• More than 15 years, $28.26

(Click here for a chart on the national average hourly wages.)

4) C&B Labs Pay More than Full Service: A comparison of wages for C&B-related positions shows that, across the board, C&B labs pay an average of $1.21 per hour higher than full service labs do for the same positions. This higher pay scale is especially notable for all-around ceramists who earn an average of $2.96 more per hour working at a C&B lab.

In contrast, full service labs pay their CAD/CAM operators approximately $1.97 more per hour than C&B labs.

5) The Larger the Laboratory, the More Comprehensive the Benefits Package: For example, 67% of labs with more than 20 employees offer dental insurance compared to 17% of labs with three to five employees; 50% of larger labs offer 401(k) plan/SEP compared to 12% of smaller labs. (Click here for chart.)

Among all lab sizes, paid holidays, vacation and sick time are part of the standard benefits packages offered by the majority of respondents. Health insurance is also customary however, due to the economic situation, about 40% of our survey participants have switched to a more cost-effective health plan and 17% are now requiring employees to either start contributing or contribute more to the cost of their premiums. Other perks offered by respondents: 44% offer flex time and about one-quarter offer dental insurance, disability insurance, 401(k) plan or SEP and 401(k) matching.

6) The Digital Impact on Direct Labor: One way respondents are controlling C&B labor costs is through the use of digital technology in their laboratories. One-quarter say their direct labor percentage has declined due to the use of digital technology in their laboratories; a similar percentage say that although the percentage hasn't changed yet, they expect it will decline in the future.

7) CAD/CAM is Changing Roles, Not Eliminating Staff: For the vast majority of laboratories, the move to digital fabrication is not affecting their staffing needs or the number of staff they require: only 11% of participants have eliminated employees since incorporating a scanner, CAD/CAM system or rapid prototyping system into their operations. Much more prevalent is a shift in responsibilities: 91% say their CAD/CAM operators also have other technical responsibilities in the lab. "We have trained our waxer to handle the scanning but he's still doing conventional waxing as well. He already has knowledge of how copings should look and fit," says Scott Graule, owner, Anchor Dental Lab, Charleston, South Carolina. (Click here for more details.)

8) Web-Based Training on the Rise: The number of respondents using web-based technical video and instruction has more than doubled in the past two years, according to a comparison of LMT's 2008 and 2010 Wage Surveys. In 2008, just 13% of survey participants logged onto their computers for training; this year, 33% did so. However, traditional over-the-shoulder remains the number one training strategy, followed by sending technicians outside the lab for clinics/seminars, watching videos/DVDs in the lab and assigning experienced technicians to "mentor" new ones. (Click here to view chart.)

9) Education Doesn't Translate into Higher Pay: Despite the precipitous decline in the number of accredited, two-year dental technology programs--from 72 schools to 20 in the past 25 years--75% of participants feel these programs provide a valuable foundation and worthwhile training. However, only 19% of respondents offer higher compensation for recent grads, typically paying them about $2.69 more per hour. The reason many laboratory owners don't pay graduates more is due to the fact that they're not accustomed to working in a production environment. "Many times these students are made to believe that they should be starting at wages of $14 to $18 per hour. Our experience is that they understand the basic concepts but are in no way able to perform at a production capacity or quality level commensurate with that pay level," says Teri Hernichs, owner, Western Dental Arts, Billings, Montana.