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Going rates get going in
Our 2000 Wage and Price Survey results are in: fees have increased, salaries for experienced technicians are up and wages for beginning technicians are stagnant.
In April, LMT reported on the upbeat and optimistic outlook that laboratory owners have about the state of their businesses. Our 2000 Wage and Price Survey also brings good news. Fees have increased, profitability is up and owners' annual salaries are on the rise.
A comparison of our 1998 and 2000 Wage and Price Surveys shows that overall, national laboratory fees have increased by an average of 17.4%. In addition, the average nationwide price for each type of restoration has increased across the board in the past two years, some as high as 24%. Following are examples of increases in nationwide average fees for this year:
• An all-ceramic inlay/onlay is up 20% to $120.01.
• Indirect composite full coverage crowns have increased 22% to $112.46.
• The average price of a full gold crown is up 16% to $76.70.
• Denture reset fees have increased 24% to $22.64.
• An acrylic TMJ splint is up 18% to $68.27.
More in-depth analysis shows that price hikes have occurred across the board in each geographic region and laboratory specialty. Respondents reporting the highest fee increases are in the Pacific region—26.8%—and C&B laboratory owners—21%.
In addition, nearly half of the survey respondents—48%—say their laboratories are more profitable than they were two years ago. This finding is most prevalent among full service laboratories, 61% of whom say their profitability is up.
In light of higher fees and profitability, it's no surprise that respondents' salaries have increased since 1998. For example, the percentage of owners earning between $80,000 and $200,000 went up 10% while those earning $25,000 to $60,000 per year decreased 12%.
The bad news is no surprise
Though prices are higher than ever, not all respondents seem to be cashing in. Survey responses contain the ever-present comments about an inability to raise prices for fear of losing clients. For example, "Lab materials keep going up, but we cannot raise our prices because we might lose accounts," says a respondent.
In addition, this year laboratory fees still lag behind two areas: dentists' fees and inflation. For the five restorations analyzed in the chart on page 14, for instance, dentists' fees are an average of 466% higher than the prices that the laboratory charges the dentist for the restoration. And according to the Consumer Price Index (CPI)—the most widely followed measure of inflation—laboratory fees should have increased an average of 106% since 1980; the majority of fees have not. The price of a standard Hawley retainer, for example, has only increased 54% in the past 20 years.
It is encouraging to note, however, that laboratory owners have been doing a better job staying ahead of the rate of inflation in the last decade. Between 1991 and 2000, the CPI increased 26% and yet the fee for a composite inlay went up 50%, acrylic temporary fees increased 53% and the price of a complete maxillary denture nearly tripled the CPI at 70%.
Wages: mixed news
Overall, wages have increased only 4%. However, busier than ever and facing a personnel crisis, it seems that laboratory owners are coping by boosting the salaries for technicians with experience. Those with eight or more years of technical experience are earning 13.6% more than they did two years ago, for an average hourly wage of $15.32 or just under $32,000 a year based on a 40-hour week.
The highest wage earners at this experience level are ceramists who earn an average of $19.36 per hour. Denture setup technicians are the second highest earners, making $16.69 per hour. This group has also experienced the most dramatic wage increase since 1998—up 36%. The West is the highest paying region for all types of technicians with eight or more years on the job at an average of $16.60 per hour.
In contrast, nationwide hourly wages for beginning technicians with up to one year of experience have remained relatively stagnant at an average of $7.67. This is an interesting contrast to our 1998 survey results that showed starting wages were up 20% and in which respondents agreed that raising starting salaries was necessary to continue attracting newcomers. This shift may indicate that finding untrained technicians has become so difficult and there is so little time for training that laboratory owners are simply relying upon—or have become more dependent upon—technicians with experience to get the job done.
Other findings about wages include:
• Size does matter. For all levels of experience, 11-to-20-person labs pay the highest average hourly rate—$11.48—compared to laboratories with one employee who pay the lowest average, $9.63 per hour.
• In terms of specialty, starting partial technicians make the lowest wages of all, just $6.67 an hour, while ceramists earn the most at all experience levels.
• Employees who are solely responsible for pick-ups and deliveries earn an average of $9 an hour.
Outside of the dental laboratory community, companies are luring new employees with bigger and better benefits packages in an effort to compete for the limited pool of qualified employees. And though LMT's Classifieds are brimming with Help Wanted ads that offer excellent salaries and benefits as well, the vast majority of survey respondents tell us they haven't enhanced their benefits packages and, in fact, the quality of benefits offered has declined in the past two years. For example, the percentage of laboratories offering pension/profit-sharing plans has decreased from 16% to 10% and those with 401(k) plans has gone down from 14% to 4%.
Even more dramatic is the decline in health insurance benefits since 1998. The percentage of laboratories offering health insurance to their employees dropped by a startling 35% and those with dental insurance decreased 13% to 7%. Of those who still offer health benefits—just 27%—almost half of them have changed the coverage in the past two years, either by requiring employees to cover the co-pay, choosing a plan with a higher deductible or switching to a less expensive plan that combines managed care and indemnity features.
Keys to success
Every market is made up of businesses that run the gamut from bottom-of-the-barrel operations to state-of-the-art benchmarks. In our communuty, successful laboratory owners share these things in common:
• They define their niche, whether it be to compete against those who cater to price-conscious dentists, marketing to attract a high-end fee for the utmost quality and service, or somewhere in between;
• They analyze their workload, labor and material costs, breakeven points and set their fees accordingly without fear of reprisal;
• They recognize that they are in partnership with their clients and make every effort to spend time walking in their clients' shoes;
• And, as a result of doing their homework, they work smarter, not harder.
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