How Strategic Raises Drive Practice Growth & Loyalty

For many independent dental practice owners, the annual discussion around staff raises can feel like walking on a tightrope. Do you provide a cost-of-living adjustment to everyone? Do you wait for their work anniversary? How do you ensure fairness without breaking the bank?

Compensation decisions are not just about expenses; they're an investment in your team's motivation, loyalty, and your practice's long-term success. Drawing insights from leading practice management experts like ACT Dental, we at Smile Source advocate for a strategic approach that ties raises directly to performance, growth, and profitability. Here’s how to implement a raise strategy that genuinely fuels your practice.

Raises are About Performance, Not Just Tenure

The most significant shift you can make is to separate raises from mere tenure. While loyalty is valuable, a raise should be a reward for documented performance, mastery of skills, and value creation.

• Align with Your Fiscal Year: As Kirk Behrendt discussed in the previous blog post, presenting pay increases in January (or at the start of your fiscal year) simplifies budgeting and payroll. It creates a clean financial slate for the entire team.
• The "Growth Interview" is Key: Frame the compensation conversation within a "Growth Interview,” shifting the focus from justifying past work to a collaborative plan for future development and contribution. The raise is then presented as the financial recognition of their past year's growth and the investment in their future potential.
  
  

Benchmarking for Competitive & Fair Pay

You can't pay strategically if you don't know the market. To attract and retain top talent, you need to understand competitive pay ranges.

• External Benchmarks: Utilize local dental salary surveys and reputable industry data to understand the competitive salary bands for each role in your practice (hygienist, assistant, front desk, office manager). This ensures your compensation is market-competitive. 

According to Deborah Bush, a dental practice observer and survey analyst who worked with DentalPost, Dental Economics, and RDH Magazine on salary surveys during 2020-2025, the competitive salary/hourly wage range varies by region and state. “What is competitive compensation? Pay higher than the regional, state, or local median, as the local median largely depends on whether the practice is rural, metro, or metro-suburban. In the case of experienced hygienists and dental assistants, a competitive salary must be higher than the local mean (average) to be attractive and also somewhat higher than their previous earnings,” says Bush. “This is due to the high demand for these professionals.”

• A Living Wage: DentalPost.net surveys indicate that one driver of job turnover in dental practices is the inability of front office staff and dental assistants to earn a living wage. “The demand for a living wage is equal to the demand for a positive work culture. And over 25% of front office staff and dental assistants are working secondary part-time jobs that are draining their energy,” says Bush. “Ask yourself: What does someone need to earn to cover living expenses in my community? Many dental professionals who depend solely on their income have children. Do they need more income? How can you help them earn more in your practice? 
• Internal Equity: Are employees with similar experience, responsibilities, and performance levels compensated fairly relative to each other within your own team? Addressing internal inequities is essential for team morale and preventing turnover. 

“Unfair pay is a major demotivator, a significant source of resentment, and a primary driver of employee turnover. High morale is strongly tied to feeling valued, and fair compensation is a core part of that,” says Bush. “Are dental team members likely to compare what they are making? Yes. Regardless of your policies on discussing pay, employees often find ways to compare salaries, especially now with increased pay transparency laws and online resources (like DentalPost, Glassdoor, or LinkedIn) for estimating compensation.”

• The Pay-for-Proficiency Model: It requires some forethought, tracking, and post-event evaluation, but pay increases tied to an employee mastering new skills, taking on advanced responsibilities, or improving specific practice metrics motivate continuous improvement and provide a methodical way to increase income incrementally.
  
  

What Do Dental Team Members Expect?

“Of course, they expect a fair wage and feel valued when their compensation is higher than average for their region of the country,” says Bush. “They expect an annual cost-of-living adjustment, but hope for more. If a proficiency-for-pay model is an explicit part of your practice development (and even if it isn’t), they will be tracking their own accomplishments and estimating the value of their increased contribution to the practice.” 

Most hygienists who have achieved longevity in practice are satisfied with income at the top of the salary band and are unlikely to change jobs to seek compensation beyond an annual cost-of-living adjustment, says Bush. “After years in practice, they love their patients, relative autonomy, and well-calibrated collaboration with the dentist,” she says.

“Some team members want more flexibility for days when children are sick. They don’t expect to be paid for that time away, but they need grace,” says Bush. “Some can’t always adhere to hard start and end times on the clock. In the surveys DentalPost conducted in Q4 of 2023 and 2024, multiple comments from team members indicated that arrival and departure flexibility was a perk they desired more than a pay increase, as they had difficult commutes.”

What About Bonuses?

“This is interesting,” says Bush. “Bonus systems can be complex, and most surveys do not track this data. DentalPost did track bonuses in Q4 of 2022 and reported the data in January of 2023. For dentists and hygienists, bonuses were tied directly to the revenue generated from their work. Associate dentists typically were paid a commission of 30% to 35% of their total collections (i.e., the money the practice actually received). Dental hygienists typically were paid a base hourly rate plus a commission of 25% to 35% of production that exceeded a pre-set daily goal.”

Open comments led Bush to the conclusion that, in a patient-centered private practice, hygienists are happiest when spending 45 to 60 minutes with each patient. Commenters genuinely wanted to maximize their effectiveness with each patient and were not as commission-driven. “They were delighted to receive small commissions for add-on services but held thorough examinations, imaging, prophylaxis, and patient education to be sacrosanct. They didn’t want to feel income-driven day in and day out,” says Bush. “They also had the highest regard for their profession and knew their self-value. From 2022 to 2024, the survey data indicate that more hygienists spoke up to negotiate compensation, helping them stay satisfied in their roles. In Q4 of 2025, the survey data showed RDH pay increases had leveled off, but benefits rose.”

Practice-wide team bonuses are given to non-provider staff, typically when the practice hits an overall financial target. In 2023, about 40% of team members were receiving a monthly, quarterly, or annual bonus, says Bush. Most bonuses (55%) were based on a percentage of practice production, nearly 25% on achieving proficiency goals, and 20% on a percentage of collections. “Over 50% of survey respondents expected the annual total to be less than $1,000, not a significant source of income,” she said. 

“As we were coming out of the pandemic, I recall many open comments in surveys expressing pleasure with receiving year-end ‘Holiday’ bonuses,” says Bush. “The annual holiday bonuses were not tied to proficiency or financial targets. These were additional gifts of appreciation from the employer to all team members. These gifts made a significant impression, and they kept engagement high going into the next year.”

What About Benefits?

During the current labor crisis, data indicate that the percentage of team members receiving benefits has increased in private dental practices. “Benefits used to be the competitive edge for larger group practices and DSOs,” says Bush. “That’s not necessarily true today.” 

As of January 2025, over 90% of DentalPost’s survey respondents in private practices reported paid vacation and paid holidays. “That was across all team roles,” says Bush, “including associates, hygienists, dental assistants, office managers, and other front office administrators.” Over 70% reported receiving some form of retirement benefit. Over 60% reported dental benefits. Just over 55% reported some paid sick days. Over 45% reported health insurance. 

“Covering the cost of CE opportunities has been a longstanding standard in most private practices,” Bush adds.

What Are Strategic Pay Raises?

These pay raises drive practice wellness, with high team engagement, loyalty, and role effectiveness. They are:

• Performance-Driven: Strategic raises shift the compensation focus from seniority (tenure) to documented performance, skill mastery, and value creation.
• Market-Competitive: Pay is benchmarked against external market data to ensure it is competitive. Addressing the need for a living wage and establishing internal equity (fairness among peers) directly reduces employee turnover and boosts team morale.
• Growth-Oriented: Implementing a Pay-for-Proficiency model and an individualized Growth Plan links pay increases directly to an employee mastering new skills, taking on advanced responsibilities, or improving specific practice metrics. This fosters a growth mindset and motivates continuous improvement.
• Trust-Building: Strategic compensation involves delivering on all promises regarding salary, raises, and benefits. Failure to uphold these commitments is a major driver of resentment and job searching.
  
  

Invest in Your Team

“View a raise not as a cost, but as an investment,” says Bush. You are investing in your employees' increased capacity to engage patients, collaborate as a team, raise the clinical bar, eagerly learn, and serve efficiently and pleasantly. A healthy contribution in all these areas is what drives wellbeing at work, patient loyalty and referrals, financial security, and meaningful practice.”

According to Bush:

When employees see a clear path from personal growth to financial growth, they are far more likely to engage, innovate, and commit to the practice's success. But don’t make promises you cannot or do not intend to keep. DentalPost.net surveys from past years indicate that disappointment often triggers a job search, especially among first- and second-year employees. 

The most vulnerable positions in the private practice sector are front-office administrators, whose skills and experience are transferable to other types of businesses. Frequently, they are promised mid-year raises if “performance is excellent,” or they are offered employee benefits, such as a paid CE course and paid time off for two sick days after 6 months of service and four sick days after 12 months of service. 

When the mid-year anniversary rolls around, the employer may be too busy to recognize the date, but the employee thinks, “Okay, now when I want to register for a CE course, I just have to ask. When I get sick, I will continue to get my daily wages for two days.’” The awkward rupture in good rapport kicks in when the next paycheck is not higher. The employee wonders, “Should I say something?” Many will stew in silence or complain to co-workers while looking at alternative employment.

The employer might be obtuse. The employer might be ambivalent. The employer might be puzzling through what the pay increase should be, especially if there has been disappointment in performance and the employer has neglected to coach the employee. In these cases, most dentists hesitate to terminate an underperforming employee due to the dental labor shortage, fear of pushback, and a lack of confidence in their “how-to” skills. If a team member is not putting in the effort required to learn and perform at a high level, keeping them on the team strains the rest of the team.

I can’t tell you how many times dentists have said they are uncomfortable coaching performance, don’t have time to give feedback, expect employees to know what to do, and are disappointed when team members don’t resourcefully solve problems on their own. They often say that the employee lacks “work ethic.” When I read this in surveys or hear it in a study club, I think, “Whoa, hold the horses.” This doc needs to hire better and coach more. 

I understand the hiring problems, but leading a successful business requires leadership. I admire Smile Source and ACT Dental for providing (1) leadership development for dentists, (2) coaching them to be coaches, and (3) helping them coach their practice teams.

The Smile Source Advantage: Strategic Compensation Support

Strategically managing compensation is one of the most powerful tools for building a loyal, high-performing team. Your Smile Source membership is designed to equip you with the knowledge and resources to do this confidently.

• Data Access: Leverage the collective data and expertise within the Smile Source community to understand salary ranges in your area.
• Peer Mentorship: Connect with other independent practice owners who have successfully implemented strategic compensation models and gained insights from real-world experience.
  
  

The Takeaway

By implementing a strategic, performance-driven approach to raises, you transform a potentially awkward and costly conversation into a powerful, positive driver for practice-wide success. This investment in your team's development and financial security establishes a clear path in which personal growth directly translates into:

• Growth in Patient Engagement: A highly valued, skilled, and motivated team is better able to deliver exceptional, patient-centered care, resulting in stronger patient relationships and greater satisfaction.
• Employee Engagement: By clearly linking pay to proficiency and performance, you foster a growth mindset, higher morale, and a willingness to innovate and commit to the practice's success.
• Practice Financial Growth: An engaged, highly effective team drives increased capacity, improved efficiency, and higher-quality service, which collectively boost productivity and profitability.
• Patient and Team Loyalty: Strategic, fair compensation reduces staff turnover, creating a stable, experienced team that patients trust, cementing long-term loyalty from both your staff and your patient base.