The Coming Employee Crunch
The number of jobs in the United States grew by 24 million between 1974 and 1984. No country, including the United States, ever created that many new jobs in a decade. This occurred in spite of the fact that we experienced the energy crisis, near-collapse of smokestack industries, and two recessions during that same period.
Since the late 1960s, the old job creators such as the Fortune 500 companies, schools, and local, state, and federal governments employed fewer workers, and of the 40 million jobs created since 1965, only five or six million have been in the much-heralded high-tech field. High-tech contributed just about what the smokestack industries lost.
Where have all the jobs come from? Peter Drucker attributes them to growth of service companies, information companies, and other entrepreneurial enterprises. The good news is that our economy appears to be capable of continued growth in those areas.
The bad news is that, as a result of the baby bust of the 1960s, by 1987 more people will be leaving the job market than entering it. This will become a problem of the first magnitude for professionals as they are forced into stronger competition for competent staff people. The recruitment and retention of good employees, which has always been a challenge, will become critical in the near future.
Employment in an orthodontic office has been an attractive position to women and it is likely to continue to be so. This creates an edge in attracting employees, but it will not be a decisive edge in hiring or retaining good employees in the future unless the position offers satisfactory salary and employee benefits, competitive with similar jobs in the business world.
Perhaps because orthodontists tend to hire young girls fresh out of school--with no experience--and older women anxious to get back into the job market, salaries in a majority of orthodontic offices are not competitive. For example, in the recent JCO Orthodontic Practice Study, the average salary for a receptionist/secretary was less than $1200 per month. This appears to be about one-third less than the going salary for comparable jobs in the business world.
Orthodontists seem to be more competitive in employee benefits, but have avoided some of the benefits that are most attractive to employees. Perhaps because many of our employees are covered in their husbands' health insurance benefits, fewer than half of the orthodontic offices offer health insurance coverage. It is hard to believe, but fewer than 15 percent of orthodontic offices offer dental insurance. Very few offer child day care benefits, although such benefits are most attractive to parents of young children.
It has been repeatedly shown that employee benefits that are not taxable to the employee, but are deductible to the professional corporation, are more valuable than an equal salary increase. It should not be surprising that employees also like benefits that pay for eyeglasses, uniforms, and continuing education, and for expenses not covered by their insurance plans.
Only 3.5 percent of orthodontic offices have a cafeteria plan for employee benefits. Yet a cafeteria plan is the most equitable and attractive vehicle for these benefits. It is controllable by the employer in having a top limit on the total amount allowed for all benefits, but it permits employees to select from a menu of benefits those that are most attractive to them.
In the past, some offices have encouraged personnel turnover to avoid inclusion of assistants in the retirement plan. Also, when retirement plans were structured mainly to benefit the professional employer, young employees disregarded the benefit, simply because they could not look far enough into the future to their retirement Now. with more rapid vesting in retirement plans, and with more knowledgeable employees, a healthy retirement plan could be an appealing benefit in a strategy designed to attract and retain personnel. This would especially be true if orthodontists recognized the importance of carefully selected and trained employees and the value to the practice in retaining a winning, career-oriented team.
Aside from a major economic collapse with substantial unemployment, the only extrinsic factor that could relieve an almost certain employee crunch is increased immigration. It is highly possible that many of the women with whom we will be working in the 1990s are 10-11 years old right now, and in Mexico.
The prudent orthodontist will not wait until the attraction and retention of high-quality office assistants becomes even more difficult, but begin forming and implementing a strategy to neutralize this potential problem as soon as possible. In the unlikely event that this scenario is not correct, the practice will still benefit immeasurably from such a plan in terms of improved service.