The labor crunch is on, and workers have many more attractive choices for jobs. Will your practice be able to keep quality employees?
Dr. Ira Wolfe
That sucking sound you may be hearing is not the sound of your maintenance people vacuuming your carpets. No, it is more likely the sound of other businesses removing your employees - both the good and the bad - from your practice.
Consider this. The oil shortages in the 1970s were caused by only a five-percent shrinkage. The current and projected labor shortage is 15 to 25 percent! Is this just another temporary shortage? The oil shortage was little more than a deliberate act to withhold resources for political and economic reasons. The labor shortage, on the other hand, is an absolute shortage - i.e., too many jobs and too few good people to fill them. The labor crunch is on and, from all indications, it will continue well into at least the next 20 years.
In 1998, nearly three million new positions were created in the U.S. economy. In the first three months of 1999, over 560,000 new jobs were created. Unemployment has hit a 30-year low. Currently, between three and six million positions go unfilled.
Shortages have come and gone before, the cynics will say. The economy will cool off, companies will downsize, and a glut of employees will be looking for jobs. Our research, however, clearly indicates the cynics will be wrong this time.
Consider the following:
- According to the Hudson Institute, the ratio of entry-level wage earners to retirees has fallen from 9 to 1 in 1955 to 4 to 1 in 1995. By the year 2020, that ratio is projected to be two wage earners for every retiree.
- The labor force has grown nearly 40 percent during the past 20 years, while the number of positions available has increased 50 percent.
- In 1998, despite manufacturing downsizings of over 337,000 people, nearly three million new positions were created. Half of all the new jobs created are and will be in service occupations.
- In 1973, blue-collar workers represented over 60 percent of the workforce. By 2000, only 10 percent of the workforce will be blue collar.
- In 1950, over 60 percent of all manufacturing jobs required unskilled laborers. By 2005, less than 15 percent of all manufacturing positions will be unskilled.
- There are 78 million baby boomers, the oldest of which are now entering their 50s. There are 45 million Generation-Xers, the current 19-to-30-year-olds. Do the math!
With the number of skilled and semi-skilled service positions available now and being created daily, the number of people willing and qualified to fill them has stretched our human capacity to its limits. Simply put, more positions will be available than people to fill them, and every industry will compete for the very person you, as dentists, also hope to employ.
What will this mean?
Preparing your practice to recruit and retain employees will require very different strategies, an acute understanding of a new labor market, and positioning the management and training of employees as priority number one.
Not only are fewer people available to apply for a position, but the distinct advantage of working in a clean, service-oriented office vs. working in a factory has all but disappeared. The new generation of skilled positions offers better pay, more benefits, greater growth opportunities, and more mobility than at any time in history. It`s no longer a choice between factory work, waitressing, retailing opportunities, or working in a dental practice for the young, female high- school graduate, the traditional gender for clinical and administrative support in health-care practices. The choices are limitless and the competition for the best employees is fierce. Even worse, the people you want to hire know it!
How are dentists going to compete in the labor market? According to a Fortune magazine survey of best companies conducted by The Hay Group, the single, best predictor of excellence is a company`s ability to attract, motivate, and retain talented people. Talented people - not just any people, but talented people. How can you attract and retain these best employees?
Create an irresistible practice
Why would an employee want to work for you? Doctors are loud and clear in describing the skills and behaviors they expect of an employee. This is well and good when 10 people are applying for every open position.
Today`s market, however, is radically different. The response to a call for applications is many times silent. Just ask your colleagues if you haven`t been looking for an employee lately. Doctors must begin to ask, "Why would an employee want to work with me?" If you don`t have a great answer, you might find yourself with no one listening.
Motivated people perform best when surrounded by motivated people. Just ask yourself - how motivated are you with people who drag their feet or are always negative?
Retaining talented, good people is crucial, especially when faced with the difficulty of replacing one. Retaining underperformers, however, is deadly. Not only do under-performers demotivate other employees and patients, but they likely will drive the good employee away.
Indecision and procrastination of addressing under- or nonperformers may drive your good employees out of your practice, leaving you searching for a new best employee. While retaining the employees you hoped would leave, you are faced with the daunting task of attracting a motivated, skilled individual to join a team of underperformers. With a shrinking pool of prospects, it is an employee`s market.
Compensation and benefits
With the national unemployment rate of 4.5 percent nationally, dentists are competing with manufacturing, construction, retail trade, food and hospitality, and other health-care specialties for the same six million plus unemployed people. Dentists who pay market or below-market wages, with little or no benefits, may bring new meaning to the category of "solo practice." Our young workforce has car payments, credit-card debt, cell-phone bills, and housing expenses. They can`t - and won`t try to - make it on yesterday`s salary.
Attract the best talent
Attracting the best talent, not an option when patient satisfaction and optimum patient care are considered, requires an environment that meets and exceeds the expectations of an incredibly dynamic, but challenging workforce. While doctors are still debating the virtues of computers and chugging along with their DOS-based 386, single-user computer system, GenXers are entering the workforce as the most computer-literate, technically proficient, and expressive group ever. Sucking spit and filling out insurance forms just won`t cut it anymore. GenXers want to learn new duties. They want flexibility, learning opportunities, and feedback. High-tech dentistry is not just for the patient`s benefit; it`s becoming the competitive edge in attracting and retaining employees.
Prepare yourself now
The heat is on. The scramble to find new employees and the competition to retain current employees is just intensifying. The priorities of Fortune magazine`s best companies are teamwork, customer focus, fair treatment of employees, initiative, and innovation. These companies will be competing for your employees during the next 20 years. Are you prepared?