Not news: There is a shortage of qualified Associates or potential Partners.
News: Strap yourself in, because we haven’t seen anything yet.
During the past 12 months, the ETS Dental team has made 107,000 calls and had more than 115,000 individual email correspondences with Dentist Candidates and Dental Practice Owners.
The result? While many industries were slogging through the “Great Recession,” we’ve found that outside of a few saturated Dental School cities, there are really no unemployed Dentists. From 1975 through 1986, Dental Schools graduated literally thousands of Dentists more than they have graduated over the past twelve years. Good economy or bad, this simply means that, over the next decade, there will be a steadily decreasing population of dentists per capita.
Certainly, there are those Dentists who would like to earn more money or find a better opportunity. However, as a group, Dentists are at full employment, and less are willing to make a change than in the past. In fact, we’re making 60% more recruiting contacts to generate the same number of applicants than just one year ago.
So, what does that mean to you? If you plan on looking for an Associate or potential Partner/ Buyer in the coming years, start you search sooner, rather than later. In the very near future, we will see a spike in demand and competition for Associates in the following groups:
Deferred Retirment Dentists: We’ve spoken with hundreds of Dentists who have deferred retirement for a few more years simply because their retirement funds shrank with the reversals in the stock and real estate markets.
Two things will happen with this group. As the stock market returns to where it was a few years ago, many will be in a position to transition out once they find a qualified heir apparent. A second group of “fire sale” practices will come available from Dentists who decided to continue practicing but had a sudden medical condition that forced them into retirement. Our team fields at least one call like this per week. If you currently have an Associate and have not worked out a buy-in/ out arrangement, do it now. Don’t lose a great Associate to an emergency practice sale in his/her spouse’s hometown.
Deferred Growth Plans- (2009 Dental Economics/ Levin Group Practice Survey, 10/09 Issue): We’ve spoken with hundreds of Practice Owners who reported they are planning to hire an Associate “when the news gets better.”
The truth is, that for many practices, the news is getting better. Although median annual gross practice production declined by 3.5% since last year, many practices are reporting that production is on the rise, but they are still standing on the sidelines. In the Dental Economics/ Levin Group practice survey, 39.5% of respondents
reported they increased their production over the past six months. More importantly, 43.9% said they are confident they will increase production over 2008.
Practice Management Companies- (Forbes, Susan Adams, 11/19/09): This week, Forbes published an article about accelerating growth of the National Dental chains. the author cited Aspen Dental, which opened 50 new offices this year and plans on opening another 50 in 2010. Practice management companies like Heartland, DentalOne and AllCare can also be expected to act aggressively.
Not-for-Profits: An unprecedented amount of funding is making its way to not-for-profit clinics around the country. Many not-for-profits that previously could not offer Dental services are taking advantage of grants to add Dental Clinics, and those with Dental services are expanding. Loan reimbursement funding for early career dentists (and other medical professionals) will grow dramatically. Many not-for-profits offer guaranteed salary plus eligibility for Dentists to qualify for Federal tuition loan reimbursement. This is especially appealing to recent Dental School Graduates with a huge student loan burden (often $200-$300k or more).
Summary: There currently is not a pool of unemployed Dentists to draw from when you are ready to hire. In the next year, practice owners will see a dramatic increase in the demand for new Associates from Deferred Retirement Dentists, Deferred Growth Practices, Practice Management Companies, and Not-for-Profit Clinics with newfound funding and huge patient demand. If you like your current Associate, take proactive steps to keep him/her today. If you plan on hiring an Associate, be ready to put your best foot forward.