HR's Role in Dental Practice Strategy

January 01, 2020

By Erick Cutler

One pervasive issue impacting the management of the human resource (HR) function within a dental practice is that despite years of medical education, dentists often are not educated in management and strategic planning. This is a critical deficit as this function is inexorably tied to the overall strategic goals of the practice. The HR professional should be a key participant in the development and implementation of a dental office's strategic plan as this individual oversees a most critical component in achieving strategic goals– the practice's human resources.

Many dentists combine the functions of the office manager with that of an HR manager, or personally perform these duties. While this economizes, it can be costly. A dentist or office manager may not be familiar with the myriad of ever-changing laws applicable to the HR function and how to comply with them while maximizing efficiency.

A HR professional should not only be familiar with federal and state laws concerning nondiscrimination in hiring, sexual harassment, employee benefits, and occupational safety, this individual should be experienced in writing clearly stated job descriptions, recruiting and retaining skilled employees, providing appropriate training, and completing effective performance evaluations. Concerning the latter, performance standards, and the measurement thereof, should be specifically detailed in written form and clearly communicated to employees. The performance review may also serve as a basis for the compensation structure and merit-based pay increases. The HR professional should also be competent in defining not only current staffing requirements but should anticipate future hiring needs. All of these critical practices can get lost in the day-to-day grind of maintaining appointments and delivering patient service.

The management team or sole practitioner should formulate vision and mission statements of the practice so that every hygienist, dentist and administrator has a clear benchmark for goals and behavior. The vision statement is the broadest framework and can be a statement such as: "Our vision is to deliver the best dental outcomes in the state." The mission statement follows from the vision statement and is consistent with the corporate culture, core values and beliefs. The importance of the mission statement cannot be overemphasized as it describes the purpose of the practice, which ideally goes beyond profit and basic service. It serves as the guiding light to all individuals within the practice and also guides the director of HR in hiring decisions. Current and future employees should share the values of the organization. As an example, a dental practice mission statement could be expressed: "Our mission is to provide quality patient-centered care utilizing the most up-to-date technology in dentistry while respecting the patient's right to privacy and informed consent."

Such a mission statement answers a lot of questions that might arise in employee behavior. It tells staff that they should not cut corners at patient expense; that they should stay up-to-date on the latest techniques and tools; and that they must maintain privacy in all patient matters.

Once management formulates a mission statement, the next step is to create an organizational strategy consistent with the mission. The strategic plan should include short-term and long-term objectives and clearly state steps to achieve these goals. The plan should also specify the performance metrics that will be used to measure progress toward goal achievement. The plan and metrics can be used to evaluate each team member and set up clear incentives for performance as well as grounds for dismissal for failure to meet standards. The process is well worth the time and can enhance both patient care and the bottom line while helping to avoid costly wrongful termination lawsuits.

A crucial step in the development of a strategic plan in a fragmented industry, like dentistry where there are no clear market leaders, is to define what differentiates your practice from others. In a noted 1996 article for the Harvard Business Review, Michael E. Porter, Harvard professor and authority on competitive strategy, states that “strategic positioning means performing different activities from rivals or performing similar activities in different ways.” While the former is difficult for a service provider like a dental practice – totally new and unique procedures are rare – the second option is achievable with a team that is aligned with the practice's mission and tactics.

The practice can differentiate based on approaches to responsive patient service, patient satisfaction, how patients are greeted by staff both on the telephone and in person, and whether dental services frequently commence promptly at the stated appointment time. The HR professional can convey to employees the organizational expectations when interacting with patients and incorporate this dimension into performance standards when completing performance evaluations.

There is one other option that can present its own challenges: Dental practitioners may opt to outsource management functions, including HR, and contract with a practice-management firm. Often this option involves selling the practice to the management company and technically becoming its employee. If the practitioners choose to outsource some or all of the management and operational functions, they should read contracts carefully and thoroughly investigate the reputation of the management company, including talking with similar clients. If the firm checks out, practitioners should consult with competent legal counsel specializing in contract law and Certified Public Accountants who are familiar with the tax consequences of selling a dental practice.

Please contact our Dental Practice Leader Erick Cutler at 214-635-2541 for more information.

Note: This content is accurate as of the date published above and is subject to change. Please seek professional advice before acting on any matter contained in this article.

About Erick Cutler

Erick Cutler is a Partner in the Private Business Services Group, with nearly 25 years of public accounting experience including health care and the real estate industry.