For many dental offices, recruiting talented dental workers is a headache-inducing nightmare. Nearly 30 percent of all dental offices are actively seeking full-time hygienists and dental assistants. Yet, nearly 70 percent believe that finding these workers is “extremely challenging.” When you add in a dash of post-Covid recovery, recruitment has become akin to warfare.
To mitigate those labor shortage pain points, many dental offices turn to dental staffing agencies. On the surface, these staffing agencies seem perfect. The dental office gets exceptional talent when they need it, and workers get to work in flexible environments. Everyone wins, right?
Here’s the problem: all of the dental staffing companies you’ll find in Canada and most in the US are “basement agencies”. They’re generally run by one person (a former receptionist, hygienist, dental assistant, etc.) who works out of their basement. They never directly employ the people they send you. And they have zero (zilch, nada, none) customer support.
While these basement companies may give the illusion of value, they’re actually costing you a significant amount of money. How much? Let’s take a look.
Are Temporary Dental Professionals Contractors?
According to the regulations set out by the Federal Government, temporary dental professionals are not contractors. While this subject gets a little complicated, it’s important to note that temporary dental workers do not meet the criteria for a self-employed individual. Using temporary dental workers a “few times per year” or “only occasionally” does not impact their employment status. All temporary dental workers are employees.
There are quite a few reasons for this, namely:
- Your dental office has control over the temporary dental worker and what they do.
- Your dental office has the final say in things that happen in your office.
- You control/choose their schedule.
- You provide tools.
- You tell the temp worker what to do.
You can see a full list on the CRA’s “Employee or Self-employed?” page. You’ll quickly notice that dental workers (temporary or otherwise) are absolutely employees. And we’ve talked with many, many dentists who have been fined thousands upon thousands of dollars for not understanding this rule.
How Much Are Basement Agencies Costing Your Dental Business?
Short answer: a lot. Long answer: a lot. Basement agencies build their business around illusions. They include relatively low upfront charges. And there’s a good reason for this: they don’t actually do anything. They don’t employ their workers, handle HR, provide customer service, vet candidates, or, well… anything else. They’re not even really a staffing agency. They just drop the worker off at your door. That’s it. There’s no other value.
As one of the country’s largest staffing agencies, we’re shocked that these basement agencies are even around. Before we entered the dental staffing industry, we had no idea these operations existed. These types of practices would get laughed out of every other industry in North America. We believe in honest, real, talent-driven work. And these agencies go against those honest practices and customer-centric services we built our company upon.
We are currently the only real, honest, talent-driven dental staffing solution in ALL of Canada. And we just started! Unfortunately, we’re not even joking.
So, let’s look at how much these basement agencies are actually costing you. Behind the seemingly-low upfront costs lies an immense amount of expense. In fact, these basement agencies can actually sink your entire practice.
The Hard Costs
Here are the hard, immediately-noticeable costs associated with basement agencies:
The Placement Fee
Most basement agencies charge a daily placement fee. This is the upfront cost of doing business with them (at least, on the surface). Generally, this is anywhere from $60 to $100. This may sound cheap. But it’s not. And here’s why: they aren’t actually doing anything to earn that $60. They don’t have a great tech stack, train anyone, handle any taxes or paperwork, or give your temporary workers any insurance. They pocket that money. And that’s the charge for simply finding someone they know to come and do the job for a day. We won’t go too deep into how insane this is (trust us; it’s insane). For now, we’ll take this surface-level charge and run with it.
Average cost of the placement fee: a minimum of $60 ($7.50/hr for an 8 hour day)
Let’s say you plan to circumvent fines and regulatory damage by onboarding your new temporary employee. Great plan. But it’s going to cost you. On average, it takes dental companies an estimated 2 hours to handle all the paperwork that goes with bringing in a temporary employee, including collecting tax forms, getting employees into the payroll system, running payroll, issuing T4/W2 and/or Records of Employment, and ultimately terminating those employees. The average hourly wage of an office manager or receptionist is around $30 per hour. So, you can assume at least $60 — if not more. Over an 8 hour day this alone equates to $7.50/hr
But don’t forget, any mistakes during this process can lead to fines. So, there’s always risk associated with trying to ad-hoc onboard temp workers to comply with regulations.
Average cost of filing paperwork: a minimum of $60 ($7.50/hr for an 8 hour day)
Remember that massive dental labor shortage that drove you to utilize a staffing agency? Temporary dental workers are well-aware of that shortage. A common (yet disgusting) practice in the dental staffing industry is hostage pay. Temporary workers re-negotiate their terms when they see your desperation. Not only does this add immediate costs to your dental office, but it can also create downstream employee happiness issues (more on this below). Since basement agencies don’t control the wages of the people they drop on your door, offices regularly pay $5/hr more than the market wage. This isn’t guesswork. We’ve talked to hundreds of dental offices. And hostage pay is happening on a daily basis.
Average cost of hostage pay: $40 per day ($5/hr)
Let’s add it up:
The “Soft” Costs
The hard costs are nothing compared to the actual cost of doing business with these basement agencies. Get ready: things get scary.
Often, treating temporary dental employees as self-employed contractors (which they are not!) results in substantial fines for your office. Failing to fulfill your tax obligations can lead to varying fees outlined by the CRA/IRS. Heck, even failing to fill out the Record of Employment (when an employee has an interruption in earnings, which is common for temporary workers) can cost up to $2000.Remember, besides us, no are very few agencies that employ their temporary workers. If you don’t onboard these employees, you can face tens or hundreds of thousands of dollars in damages.
Average cost of tax fines: $2,000 to $100,000
Basement agencies are run by one person. They cannot provide dental offices with immediate temp relief. That means that when you most need help (especially on an emergency basis) you’re left in the position of turning patients away. It takes days (even weeks) for some of these basement agencies to find meaningful workers for you. So, this can leave you short-staffed during peak times or crises. And rescheduling appointments isn’t cheap. It costs thousands. And to make matters worse, rescheduling appointments means lost business. In fact, 10 percent of people switch dentists when they have to deal with slightly late appointments — much less a complete cancellation. The cost of losing a customer and getting a new one is huge.
Average cost of lost business: (intangible, but we’ll go low and say $1,000 per cancellation)
Basement agencies don’t directly employ the people they send, which means they may care less about the overall quality of those employees. Exactly zero basement agencies actually employ their temporary workers in Canada and only a handful in the US do. They honestly don’t care. This puts you in a tricky position. If you get a subpar worker, you have to pay them and deal with any issues they create while on the job. Poor workers impact you, your clients, and your other employees. In fact, poor work ethic is contagious. That subpar few-day hire can leave a lasting impact on your business.
Average cost of customer services frictions: $12,000 in lifetime value per lost patient.
If you make the mistake of misclassifying the temp as a contractor, they may end up working in your office completely uninsured. If the temp gets hurt or hurts someone else in the office, it could cause catastrophic fees for the business. It can also result in jail time, lawsuits, and a wide variety of other nasty business.
Average cost of injuries without workers’ compensation: $113,695 in injury costs + potential jail time and fines.
There are a number of hidden costs associated with working with a basement dental staffing company–many of which you may not even realize until you have already worked with those companies. And employee happiness is a huge one. Working with a basement staffing company may mean that your existing employees become angry or frustrated. Often, due to hostage pay, temporary workers end up getting paid more than your permanent staff members. Your permanent staff members may start to feel dissatisfied with what your company is able to provide for them. Ultimately, that frustration may cause your existing staff members to leave — and the high cost of turnover can end up costing your business substantially over time. How much? It’s hard to say. Research suggests that companies lose hundreds of billions each year due to employee unhappiness.But it’s not hard to see how this can have far-reaching consequences. It can lead to attrition, productivity loss, and all of the horrible things you work diligently to prevent.
Average cost of Employee Happiness frictions: IntangibleReputation Damage
If you’re not in compliance with government regulations, including both tax regulations and security regulations, you may end up destroying your practice’s value and ruining your reputation. Patients may no longer trust your practice, and employees may not want to work for you. We won’t even put a cost on this one. Because the cost is the overall success of your entire practice.
Average cost of Reputation Damage: Your entire practice!
Working with temporary dental staffing agencies can cause a number of potential productivity challenges. You may have to:
- Lose time getting those temporary workers into place and dealing with the staffing agencies
- Deal with audits
- Work with temporary staff members to help them understand your culture and your needs
Lost productivity can be extremely expensive for your practice. You may find that you need to work more hours (which means increased overtime pay for staff members) or that you miss out on patients you could otherwise have seen during that time.
Average cost of lost productivity: intangible (but extraordinarily expensive!)
Temp workers can cause a lot of anxiety in many practices, especially when you don’t know how reliable they are. What if they get hurt or hurt one of your patients? What if you can’t get someone to fill that role in time for an extremely busy day? What happens if a temp agency makes a mistake? The last thing you need, as a dentist, is more anxiety on your plate. Feeling that anxiety can lead to decreased overall performance at work, which can have a substantial cost for your business.
Average cost of anxiety: your sanity, your money, and your happiness
Loss of Skill
Basement temp agencies rarely deal with reputation. Temps can come and go in the blink of an eye — and those staffing agencies often know that practices may not work with them long-term. As a result, they aren’t pressured to send high-quality, highly-vetted candidates. Did you know that some basement agencies don’t even verify registrations or credentials? Dental offices may have no way to predict what they will get. And the result is rarely pretty.
Average cost of loss of skill: intangible
Let’s add it up:
|Federal Tax fines||$2,000 to $100,000|
|Lost business||~$1,000 per cancellation|
|Customer service frictions||$12,000 per lost patient|
|Injuries/workers’ compensation||$113,695 per injury|
|Employee happiness||31% loss of productivity + hiring issues + retention issues|
|Reputation damage||Could cost you your entire practice|
|Anxiety||Your health and productivity|
|Loss of skill||Intangible|
The WORKFORCE Difference
At WORKFORCE, we’ve spent decades providing temporary and permanent employees to construction companies, manufacturers, transportation companies, and oil & gas businesses. We’re one of the largest recruitment agencies in North America, and we have the experience and financial muscle to find talent for nearly any type of high-skill industry. Our new WORKFORCE Dental Staffing division provides those same layers of service, support, and skill to the dental industry. And trust us when we say: it needs it.
We are one of the only dental staffing agencies that employs all of our workers. We handle taxes, insurance, workers’ compensation, or HR administration. But that’s not all. We use world-class technology and apps to instantly connect you to hygienists and dental assistants during emergencies. All of our talent is highly skilled, heavily vetted, and completely backed by our massive talent, financial, and HR ecosystem. WORKFORCE has a full-time customer service department, best-in-class technology, and a pool of talent ready to help you create better dental experiences. And best of all, we cost you less money. That’s better service, better talent, and better results for less cash. What’s not to love?
Contact us to learn more about our new dental staffing solutions. From Canada to the United States, our rapidly-expanding dental talent pool is ready to help you create more smiles.