Technician Wages Flat, Labs Still Tightening Labor Costs
Posted Sep 11, 2018 in LMT Surveys
Similar to our findings over the last decade, LMT’s 2018 Wage Survey shows that technician wages are still not seeing any significant growth. Overall hourly earnings are flat compared to our 2016 Wage Survey and 52% of our survey participants took steps to tighten labor costs in the last two years, most commonly by freezing pay raises, reducing/eliminating overtime, cutting hours or laying off technicians (see How Some Labs are Controlling Labor Costs ).
Lab owners and managers point the finger at unpredictable workflows, shrinking profit margins, price-seeking dentists, price-cutting labs and overseas competition, and say these prevailing market conditions are affecting their ability to raise employee wages and impacting other personnel decisions.
Despite these obstacles, 28% of respondents did give increases to all employees and 34% gave them to some employees; the average hourly increase was $1.42 across all experience levels.
Another encouraging sign: manager wages have rebounded. In 2014, our Wage Survey data indicated that manager wages were down across the board, with many respondents noting that managers were foregoing salary increases so their team members could get raises instead. In the last four years, managers’ hourly rates have increased by an average of 15%* with the biggest gains in the Implant and CAD/CAM departments. (See 2018 National Average Hourly Wages for Managers .)
Here are five other key findings from our 2018 Wage Survey:
1. Wages for the most experienced technicians take a hit. Out of 21 positions for technicians with over 20 years of experience, 16 of them are down. (For a comparison of 2018 and 2016 average wages for some of these workers click here.)
One theory behind this trend is that labs are relying less on skilled workers and more on digital equipment and software. “Technology has pushed the need for expensive labor down slightly,” says Tom Brainsky, Owner of Bonifate Dental Lab in York, PA. “The change in wages represents not only the advancement of digital manufacturing, but also the advancements in materials. For instance, multilayer and pre-shaded zirconia are now at the point where you don’t need your most expensive ceramists touching those cases and there are far fewer porcelain layering cases now than there were even two years ago.”
2. Annual bonuses remain popular. As in our 2016 Wage Survey, more than half of survey participants awarded bonuses last year; the average amount was $1,136.
Because the market has been relatively inconsistent over the past decade, 25% of those offering bonuses are favoring them over an annual wage increase. “Given the fluctuations our lab has been seeing throughout the year, we prefer to give out bonuses so we’re not obligated to meet a higher payroll,” says one respondent, who’s the owner of a full service lab in Pennsylvania.
3. Wide wage disparities exist. Historically, wages for the same position in our industry can vary widely by lab size, type or location and this is also the case this year. For instance:
- An all-around CAD/CAM technician with 6-10 years of experience makes $25 per hour at a small lab in Washington but just $14 at a large laboratory in Ohio.
- At a larger full service operation in Georgia, an all-around ceramist with over 20 years of experience makes $40 per hour, but half that at a small full service lab in Texas.
4. Health insurance benefits on the decline. While most benefits have remained relatively intact over the last two years, a closer look at the data shows a steady decline in the number of labs offering health insurance in the last decade. In 2008, 71% of respondents offered health benefits to employees; today, it’s offered by just 52% (see Employee Benefits: Here’s What Laboratories Offer and Labs Offering Health Insurance on the Decline).
Like businesses everywhere, labs continue to struggle with climbing healthcare costs and some lab owners say they can no longer afford to offer this benefit. “Between 2010 and 2016, our health insurance premiums went up 400% and we were forced to eliminate it,” says the owner of a small lab in Minnesota.
Other lab owners are shopping for better rates; switching to higher-deductible/lower-premium plans; asking employees to contribute more to premiums; and even seeking alternatives to traditional health insurance, like Primary Care Memberships, a no-insurance healthcare model also commonly called Direct Primary Care (see Primary Care Memberships: A No-Insurance Healthcare Model).
5. Chronic personnel shortage persists. A lack of skilled technicians has been plaguing our industry for years and forcing labs to hire and train unskilled workers; now record-low unemployment rates are exacerbating the problem.
“Training new technicians has been our key strategy,” says AJ Posca, Owner of Posca Brothers Dental Lab, Long Beach, CA. “But the void of applicants leaves room for these trainees to jump ship to another laboratory at any moment—labs who are desperate for any type of help and are willing to pay them a higher wage regardless of their lack of experience.”
The shortage of workers also means owners are nervous about their ability to sustain growth; this is especially true in removable labs where trained help is even more scarce. “We are unable to get good quality, experienced technicians in removables and it’s very tedious and time-consuming to train new employees. Therefore, as the owner, I’m still tied to the bench setting up teeth, doing quality control, handling calls from the dentists and going to appointments with dentist/patients. I wish I could hire someone to set up denture teeth so I could focus on the business and start learning digital model printing,” says the owner of a mid-size denture lab in Tennessee.
On the other hand, labs with digital equipment are having an easier time. In addition to being more attractive to younger applicants, many digital labs say they’re now able to operate with leaner staffs which is having a positive impact on overall operations and personnel issues.
“CAD/CAM has really impacted our personnel decisions both by lowering our need for new technicians and increasing sales/production with the technicians we employ,” says Teresa Jackson, Office Administrator, All Things Dental in Alto, GA. “When an employee leaves we often don’t replace him, but cross-train others to cover that department or shift people’s hours. Consequently our hiring of new employees has gone down considerably over the past two years.”
Editor’s Note: For the national average hourly wages for all technicians and managers across all experience levels and national average hourly wages by laboratory size, please see the charts below.
CHARTS & GRAPHS
2018 National Average Hourly Wages for Technicians
2018 National Average Hourly Wages for Managers
2018 Average Hourly Wages: Labs with 2 to 5 Employees
2018 Average Hourly Wages: Labs with 6-20 Employees
2018 Average Hourly Wages: Labs with 20+ Employees
Experienced Technicians Making Less
Employee Benefits: Here's What Laboratories Offer
'By the Hour' Most Popular Way to Pay
Labs Offering Health Insurance on the Decline
Office Managers: Average Hourly Wages
Laboratory Owner's Average Total Personal Gross Income for 2017
How Some Laboratories are Controlling Labor Costs
