LMT's Exclusive 2014 Wage Survey Report: Market Uncertainty Continues to Impact Personnel

Nearly three quarters of respondents to our 2014 Wage Survey have taken cost-cutting measures related to personnel in the last two years, citing unpredictable workflows, pricing pressure from dentists and other low-cost labs, and an increase in business costs. The most common measures respondents are taking include freezing pay raises, cutting hours, laying off technicians or reducing/eliminating overtime.

“As the dental industry continues to drive prices down and the costs of benefits and materials continue to increase, it is increasingly difficult to give well-deserved raises and bonuses,” says the owner of a large, full service lab in the East North Central region.

In addition, although 43% of respondents saw an uptick in business in the first quarter of 2014, given the inconsistent business they’ve seen the last few years, many describe their outlook as “hesitant” or “cautious.” Consequently, they’re taking a wait-and-see attitude before rehiring, adding hours or increasing wages. “Business has been a rollercoaster for five years and it makes me very timid about making ANY changes,” says a lab owner respondent of a 6-10 person removable lab in the South Atlantic region.

Despite the uncertainty, 30% of respondents did give raises to all of their employees—9% more than in our 2012 Wage Survey—and another 28% gave raises to some of their staff members. Of those respondents who gave raises, 61% also gave bonuses, averaging $1,067. Among those who didn’t give raises, one-third gave an average bonus of $828.

“Technicians need to be compensated for quality work and to feel good about what they do. I strongly believe you get what you pay for,” says the Owner of a mid-size, full service lab in the Middle Atlantic region.

TOP WAGE & BENEFIT TRENDS

The Biggest Winners. When we analyze our survey data by years of experience, technicians with the least and most experience—up to two years and 20+ years—have seen the biggest wage increases in the last two years: newcomers saw a 10% hike and veterans got a 9% boost. In addition:

• An analysis by specialty shows that, overall, removable technicians are the biggest winners, earning an average of 9% more than they were two years ago.
• Individual positions seeing the largest increases across all experience levels: Partial Frame Finishers, up an average of 16%; and C&B Metal Finishers and CAD/CAM Milling technicians, earning 7% more than two years ago.
• Among managerial positions, the Implant Department Manager is the top earner, making $26.74 an hour across all experience levels. Removable Department Managers are the second-highest paid, earning an average of $25.60 per hour.

Large Labs, Denture Labs Most Likely to Give Raises. Our survey shows that the larger the lab, the more likely it is to give a raise. For instance, just 5% of labs with more than 20 employees didn’t give any raises compared to 45% of labs with fewer than 21 technicians.

When analyzed by lab type, we find that denture labs are the most likely to have given raises to all of their employees—42% compared to about a quarter of full service and C&B labs—not surprising given that while skilled technicians are hard to find, removable technicians are particularly scarce, and labs need to retain their talent.

Denture labs also seem to be faring the best so far in 2014, with 52% of denture respondents reporting that business is markedly up, compared to about 43% of full service and 39% of C&B lab respondents.

C&B Labs Feeling the Pinch. More than half of C&B labs haven’t given raises since 2012 and this specialty is the most likely to lay off technicians and cut hours. As digital technology and full contour restorations make C&B work more of a commodity and patients opt for “drill and fill” in this uncertain economy, C&B respondents are feeling the effects. “My accounts feel like they’re being pinched so they want cheaper crowns, but quality work; it’s hard to give them both,” says a C&B respondent from a small lab in the Pacific region. “With business down, there is no way to pay more. I’ve decreased wages by 40% and my technicians know they’re lucky just to have a job.”

Managers Making Sacrifices. While technician wages are up slightly, manager* wages—except C&B Department Managers who are earning an average of 4% more—are flat or slightly down compared to two years ago. On average, salaries for:

• Removable Managers are down 8%
• CAD/CAM Managers, down 8%
• Implant Managers, down 5%

Several respondents note that managers are forgoing salary increases so their staff members can get raises. In the long run, keeping qualified, valued technicians makes the manager’s job easier. “We are trying to keep good technicians so sacrifices are made by others to provide some type of future for them and our field,” says one respondent.

Implant Technicians’ Wages Surpass Ceramists. For the first time in our Wage Survey history, the All-Around Ceramist is not the top earner in the laboratory. This year, the Implant Technician is the highest-paid non-managerial position, earning an average of $22.03 per hour across all experience levels. Still, the All-Around Ceramist comes in at a close second, earning an average of $21.65 per hour across all experience levels.

By years of experience, here’s what Implant Technicians earn:

     0-2...................... $16.56

     3-5...................... $17.75

     6-10.................... $22.20

     11-15.................. $22.24

     15-20.................. $24.45

     Over 20............... $28.96

Health Insurance Coverage Dips, Other Benefits Intact. Since 2012, there’s been a 9% dip in the number of labs offering healthcare insurance. Citing skyrocketing premiums, these laboratories have eliminated this benefit for employees, sometimes offering them a raise or stipend to cover the cost of securing health insurance on their own.

Rather than eliminating coverage altogether, another common strategy lab owners are using is switching to a higher-deductible, lower-cost plan, or asking employees to contribute to the cost of the premium. (Under the Affordable Care Act, employers with more than 50 full-time employees must offer healthcare coverage to employees; those who do not face penalties. For more information, visit www.healthcare.gov/what-do-small-businesses-need-to-know/.)

Other laboratory benefits have stayed relatively intact in the last two years, with 83% of respondents offering some type of employee benefits. Not surprisingly, the comprehensiveness of the benefits package increases with the size of the lab. For instance, labs with more than 20 employees are more than twice as likely to offer healthcare insurance or a 401(k) plan as a 2-5 person operation.

However, what smaller laboratories lack in formal benefits, they make up for in flexibility: 40% of 2-5 person operations offer the valuable perk of flextime compared to just 6% of labs with over 20 employees.

Emphasis on Retraining Digital Technicians. Consistent with our past surveys, the majority of respondents say digital technology is shifting the responsibilities of their staff rather than eliminating them. “We moved our experienced metal finisher/waxer into a designing position and she is doing extremely well. In my opinion, the CAD designer needs to be an experienced technician who understands morphology, occlusion and frame design—this can’t be taught overnight. We also retrained our opaquer as a CAD scanning technician and have hired lesser-skilled or inexperienced people to run the mills, depuck and sinter. We are now producing more than double the units we were previously,” says Barbara Warner Wojdan, CDT, AAACD, President, Knight Dental Group, Oldsmar, FL.

The Effect of Automation on Direct Labor. The average direct labor percentage reported by respondents is 37% and more than one-third of respondents say offering digitally fabricated restorations is lowering their direct labor percentage. “We’re producing more volume without hiring more technicians and I expect the decline in our direct labor percentage to continue as technicians get more skilled with the digital environment and we purchase more equipment,” says Laura Drave, Controller, Rochester Technical Group, Rochester, NY. “Ideally, we won’t have to replace some of the technicians who will be retiring and more digital equipment will help us to keep growing in spite of the technician shortage predicted in the future.”