Hiring Associates: What to consider to find and retain the best talent

Narrator: You are now listening to another episode of the Insurance Untangled podcast, where we explore the various challenges faced by dental practices due to their reliance on insurance. Join us in this podcast as we dive deep into the issues surrounding dental insurance dependence and offer practical solutions and strategies to help you take control of your practice’s financial future.

Ben Tuinei: Welcome to another exciting episode of the Insurance Untangled podcast. My name is Ben Tuinei, and I’m one of the co-hosts of this podcast, and everybody knows we’ve developed this podcast for you, you know, and untangling the mess of insurance — but not just insurance. There are a lot of business components, you know, that are not necessarily tied to insurance that are very important for doctors to know.

Today’s episode is gonna be about keys to success in recruiting associates. So there’s actually a direct tie-in to insurance when you’re looking to hire associates, if you’re in-network with insurance, and sort of the complexity of dealing with that — which we’re not gonna dive into very, very detailed today, and it’s mostly because we have our wonderful and repeat guest here, Perrin, with us. He’s been on the last webinar, so y’all know him. Perrin, how are you, my friend?

Perrin DesPortes: I’m great, Ben. It’s good to be back with you. It feels like it’s been a minute since we were last together, so thanks for having me back on. Hopefully I can share a little bit of insight into the dark world of recruiting and entertaining associates. Right? It’s a big topic.

Ben Tuinei: Yeah, absolutely. And we appreciate you, and we have many more episodes that we’ll do together and just appreciate you being on the podcast. And I know for a fact the listeners appreciate you because I got a lot of comments about what you had to say in the last webinar, including the last couple of podcasts that we did together. So, thank you, Perrin.

Perrin DesPortes: Good, good.

Ben Tuinei: Yeah. Yeah. Let’s dive straight into the topic today. So we’re gonna talk about the keys to success in recruiting associates. And I think this is a major pain point for dentists across the country — practice owners in particular — where there’s a current theme of, well, I guess recidivism isn’t the right word. It’s sort of the revolving door, right? Of associateships, that associates that come into practice — a lot of times they don’t stay very long. And there are reasons for that, you know?

And so the purpose of today’s discussion is sort of to open up at least a new, fresh, and amazing perspective on how to retain — how to recruit these associates, but how to retain them, right?

And so, Perrin, first question I have you is regarding the process in which you go about to be sort of consistent in hiring people that stay long-term, right? Or being competitive enough to where you’re hiring the greatest talent that is out there. What would you say in terms of the initial process and what should that look like for a practice owner that’s looking to go and hire an associate?

Perrin DesPortes: Yeah, I mean, it’s, all jokes aside — and this, you and I could probably talk for three or four hours long on this topic — because it is one that I find has, it should have a lot of depth to it. But unfortunately, there are far too many people that approach recruiting from a reactive posture.

So let me just start with kind of the mindset behind recruiting. And you know, I think we might’ve talked in a prior episode that I ran three different businesses for Patterson Dental Supply over a 15-year career there. And I recruited a heck of a lot of people into that organization, and I learned a lot about recruiting at a very early age. And I learned — I built a recruiting process for me in terms of recruiting people into that organization — that generated a lot of fruit and was very effective over time.

Perrin DesPortes: And so, the first thing I would tell you is for people in the audience who are thinking about or needing to bring an associate into their business — in a growing business, in a successful business — whether it’s growing in terms of head count, number of days and hours, availability and all that, or number of locations, if yours is a growing business, you have to understand that as the leader and owner of that business, you are in the talent management business, alright? Mm-hmm.

A growing business is always looking to attract higher-caliber talent moving forward. It could be that it’s a plus-one head count, meaning that you maybe expanded the facility and added some more chairs and days and hours, and you’re accommodating growth by this hire. It could be that one of your associates was not performing at the level that you needed him or her to, and you need to replace them. Or God forbid you have been presented with a short-term letter — a letter of short-term resignation — even though your contract says, "You gotta give me 90 days’ notice," right?

And if we are in a reactive posture about filling a hole, now we’re simply looking for a warm body to fill the slot. And in today’s world, that’s a terrible position to put yourself in.

So, what I would say about a recruiting process is as follows: one, you have to be in the discipline of commitment to always upgrade the talent level and always seek new talent to add to your organization.

How do we do that? Once again, if we are reacting to fill an opening or fill a hole, we’re probably working with a recruiter who has a list of available candidates that are ready to interview within the next week or so, or something like that.

Perrin DesPortes: Well, if a candidate’s working with a recruiter, that probably means they don’t have a job. Mm-hmm. And they may not have a job for a very legitimate reason. Now, I’m not saying don’t work with dentist recruiters, but don’t let that be the only tool in your toolbox, right? I mean, they are one of many, and they are an option to filling the opening.

Really, in today’s world, you have a lot of advantages and a lot of opportunities going for you. One, probably everyone in our audience is surrounded by enterprise-level, private-equity-backed DSOs. Mm-hmm. Right? And some of them are name-brand forward, some of them are behind the scenes. But due to the proliferation of enterprise-level, private-equity-backed DSOs, there are a lot of ’em in and around our environment, our local geography.

We know that they recruit in every single dental school in the entire United States. They are a recruiting machine. This is what the future of their business is based on, because they intend to turn over a lot of their young associates, right, in a short period of time. Now, I’m not gonna go off on a soapbox on why that is or anything like that, but the likelihood is, if you have private-equity-backed competitors in and around your general marketplace or geography, it’s probably not hard to ascertain who the young associates are who are working for those group practices, right?

Perrin DesPortes: Yeah. And if I’m in the audience’s collective shoes here, I am going to figure out a way — at a local dental society meeting, or over social media, or through my dental supply rep, or manufacturer rep, or attorney, or accountant, or consultant, or marketing agency, or fee negotiation company — or somebody who knows something about the other associates in my local marketplace and can make a connection from me to them. Mm-hmm.

Yeah. So the first thing is, if I’m gonna recruit people who have a job right now, I gotta know who they are. I gotta make a connection with them somehow. And maybe I ask ’em in a direct message over social media or something about, "Hey, I run a growing practice that we do a lot of high-end dentistry, and we’ve recently expanded or we added another location, and I need a top-caliber associate to join our growing business. Dr. Ney, do you happen to know anybody?"

Yeah. Well, you know, I am asking if you happen to know anybody — but what am I also asking? I’m asking indirectly if you’re happy where you are. Mm-hmm. Now, you may not be on a recruiter’s list of available candidates because you’re currently employed, but that doesn’t mean that you’re in your last job right now and that’s your forever dental home.

Perrin DesPortes: So I have to look beyond the people that are available to me through a recruiting agency. I have to proactively make connections with people. I might even take ’em out for a sandwich or a beer or a cup of coffee or something like that to get to know ’em and at least break the ice, because I’m forecasting the fact that in the future I’m probably gonna need another associate at some point in time.

And whether that’s a plus-one growth headcount or a reaction to somebody giving me a short-term letter of resignation, I’d like to already be halfway through the recruiting cycle before I even have to start it. Yeah. So recruiting is a process. It’s a discipline. And it is something that you have to pay it forward if you’re going to get the right candidate to come into your business.

And then we’ll talk about how to make them stick next.

Ben Tuinei: Yeah. I love that. I think, you know, I was thinking about how I got recruited into dentistry, and you reminded me of that. I was recruited into dentistry because the headhunter for this DSO was a networker. And he just so happened to be one of my friends, you know? And I was happily employed at the time, and I was making way more money than these guys could afford anyway, you know? But just entertaining that meeting opened up a new world to me — that I didn’t have to be on a plane six to eight times a week, you know? And I didn’t have to travel. I could settle down and start a family if I wanted to, and that was very attractive to me.

But you don’t know about these opportunities as an actively employed individual. You know, there’s always that temptation that the grass is greener on the other side, but you never know what’s in the mindset of professionals that are currently employed. When you talk to them, sometimes you find that your philosophies might align more with theirs compared to where they’re currently working.

Ben Tuinei: So, I like what you mentioned about that, because I’m a product of that, Perrin. I’m a product of being employed, not necessarily looking around for a new job, but then accepting a career in dentistry from the beginning — which ended up being great for that group. But it also has been amazing for me, ’cause my career has been — I wouldn’t change anything about how I got into dentistry. And that speaks to that same process, that constant recruiting process that you mentioned.

Perrin DesPortes: Yeah. You know, and to just double-click on it one more time — when you were employed and somebody reached out to you, you didn’t go on a job interview. You had a conversation with them. Mm-hmm. Right?

Ben Tuinei: Yeah.

Perrin DesPortes: So how easy is it to have a conversation with somebody when there’s nothing on the line?

Ben Tuinei: Yeah.

Perrin DesPortes: Right? You don’t need a job, you’re employed. I don’t have an opening. I’m just buying a sandwich or a cup of coffee or a beer and getting to know you a little bit. Isn’t that a lot easier to break the ice with something like that — to start to build a relationship when neither one of you needs something from the other?

But once you start doing that, now, when the game changes for me and I have an opening, I already know six or eight people that I’ve talked to up to this point. And maybe out of those eight people I talked to, three of ’em wouldn’t be good fits. But I found that out early on. The five who might be good fits — now I have something more concrete to talk with them about when I have the opening. And that changes the dynamics completely.

Ben Tuinei: Yep, it does. In fact, to kind of go through my experience — when I walked into the CEO’s office for this DSO, the way I dressed back then was French cuffs. You know, I was dressed to impress. And that was what my job required — you’re raising millions of dollars, and so you have to be, you have to look your best. And so I was in that culture.

And when I showed up for this — well, it wasn’t a job interview. In fact, he said, just come in and meet with the CEO. And you’re exactly right, let’s just have a conversation. He might want to pick your brain, but he just wants to network with high-net-worth individuals and businesspeople.

And the first thing he did — he shook my hand, kind of pulled me in towards him a little bit. He looked me square in the eyes and said, “Man, you look like a million bucks. And you feel like a million bucks. Your shake is a million bucks.” He gave me all these compliments that won me over. I was like, “I like this guy already,” you know?

Ben Tuinei: And so, it goes both ways, you know? You’re networking with people, but when you have those people come into your office, as a business owner, you have to be in alignment with what they want, you know?

Perrin DesPortes: Yeah.

Ben Tuinei: But you don’t know that unless you network with enough people. You know, it’s a numbers game.

Perrin DesPortes: That’s right. And if you’re only interviewing people — and when you’re interviewing people and you’re interviewing from a point of need — the only thing you’re thinking about is, “How quickly can I get this person employed so that they can fill the schedule and I can keep moving on?” Like, that’s desperation. That’s a terrible corner to paint yourself into.

On the other hand, like your experience with that CEO — you sat there and you probably thought to yourself, “I can see myself working for this guy at some point.” You know? I mean, that’s a totally different approach to recruiting.

Ben Tuinei: Right? You have to almost — it’s almost as if you have to earn loyalty from the first meeting.

Perrin DesPortes: That’s exactly right. My goal, when I started building my own process at Patterson — and I talk with a lot of the people who are in my Next Level Executive program — but part of being an effective executive is really being the figurehead, the face, the voice, the presence for your business in the marketplace.

And I used to say that my number one goal as a general manager running those Patterson businesses was that I had a goal of having lunch or coffee or a beer or something on a weekly basis with a different candidate. Now, the likelihood is I never went like one every week. It might have ultimately been one every other week or every third week. But I talked to a lot of people.

And after talking with them, I wanted all of them to die trying to get a job at Patterson. Like, that was my goal. I wanted to project an image for the company and for the business that I was running — that that candidate said, “Man, when Perrin gets an opening, I’m blowing down the front door to get a job with that guy. That’s where I want to be.”

And you’re never 100% successful. But good grief — if you run one out of two, you’re doing something right, man.

Ben Tuinei: Oh, yeah. I love what you mentioned, which kind of leads us into the next question here — which is sort of, you know, having a solution to eliminate the revolving door that a lot of practice owners are experiencing these days. You know, having sort of a solution that is more certain than what we’ve been doing in the past — from being competitive with compensation rates, onboarding, other things that are important to the people that you’re hiring, but also important for what you’re looking for as a practice owner, right?

So can you speak to this whole area of solving the problem of the process in which we can identify and network and hire and retain good people — good associates — based upon this whole idea of, man, it’s a competitive market, so people that are working for dental practices have a lot of options. How do you compete in this environment?

Perrin DesPortes: So again, it’s a little bit mindset. And, you know, for the people that I get to work with, they probably get sick of hearing me say this, but this is another case in point where we have to quit thinking like a clinician who owns a practice. Mm-hmm. And we have to start thinking like an entrepreneur who owns a business. Alright?

Now, those are not the same thing. But when you’re recruiting and you have the opportunity to bring in top talent, it’s less about you, and it’s more about them. And I like to tell people that we need to solve for certainty. Yeah. We need to solve for certainty.

So what does that mean? Well, in the minds of the prospective associate — the applicant, if you will — what are they looking for? Well, this is probably it. Maybe it’s their first job, right outta dental school or residency. Maybe they’ve worked for a DSO for a year or two, and this is their first real private practice opportunity beyond the world of corporate dentistry.

But they’re probably paying down a lot of student loans. They’re probably in the process of getting married, starting a family, buying their first home, replacing an old car, having their first child — like, all of that kind of stuff. And they’re all income-driven. There is nothing wrong with that.

The problem is, when you’re thinking like a clinician who owns a practice, you’re probably going to get caught in what I call dueling compensation rates. Right?

Perrin DesPortes: Yeah. So, Dr. Perrin DesPortes is presenting an offer for 30% of collections, and Dr. Ben Tuinei is presenting an offer for 35% of collections. Mm-hmm. Well, you know, which are you gonna take? Well, I’m gonna take Dr. Tuinei’s offer, because his is a higher compensation rate.

Well — percent of what? Right? So, if in your business your associates typically collect $500,000 a year, well, 35% of that number is about 165 grand. That’s not bad. But what happens if, in Dr. Perrin DesPortes’ world, at 30% of collections, our average associate collects a million dollars a year? Well, that’s a substantial difference, right?

So my first piece of advice to the audience here is we don’t want to get caught in what I call dueling compensation rates. Mm-hmm. Because it doesn’t tell the whole story. The associate can’t spend a compensation rate. They can spend income.

Income is a function of the compensation rate and their productivity, ultimately. So if yours is a business where you have a track record of success or even a reasonable projection, and you want to say, “We pay — our clinical compensation rate is 30% of your individual collections, and we would expect you to generate $700,000 in your first year, $800,000 in your second, and $950,000 in your third year.”

And here are some blanked-out W-2s from people who’ve joined our team over the last five or six years, and the money that they made in year one, year two, and year three. Now I’m starting to create confidence in the mind of the applicant — the associate — and I am substantiating it with a track record of proven performance.

That’s different than dueling compensation rates.

Perrin DesPortes: So the first thing is, when it comes to comp — and that moves the needle for a lot of people — let’s make sure that we’re presenting it in a way that actually means something to the candidate and helps them make what’s truly the choice that is in their best interest. And that’s joining our team.

You know, the other piece of this is around things like culture, core values, and an onboarding plan.

Perrin DesPortes: And today’s, you know, Gen Y or Gen Z — or whatever it’s called, I guess Gen Z — they are really core-values- or values-driven and culture-oriented. I’m Gen X, I’m 54. You know, most businesses didn’t have core values and culture and all that back when I was entering the workforce. And, you know, so it wasn’t part of my decision criteria.

Well, it is now. And if yours is a culture-driven business and makes decisions around the core values of the business, you owe it to yourself to promote that to them in the interview process. Because whether or not they come out and ask it, they are thinking about it. So if it doesn’t matter to you, don’t think it’s not going to matter to them. Alright? Right. So you really need to be — you need to be tactical about the way you present that.

Perrin DesPortes: And the last thing I would say is — again, this kind of goes back to, maybe this is their first real job out of dental school or residency, or it could be a failed associateship or something in corporate dentistry where they were just a cog in a wheel or a number on a board type thing — you know, people want to fit in.

We want to join a business that is successful. We want to join a business that we feel like we’re going to be a contributing part of. And we want to feel like we’re being surrounded by high-quality teammates that allow us to play the game at a higher level. And if what I just described is your business, then put it down on paper and show what the onboarding plan is that I’m going to go through in the next 90 days. And tell me about the teammates you’re surrounding me with, and how much time and tenure they’ve had in your business, and how they’re going to team me up for success.

All of that matters from a cohesion standpoint. And fitting into a top-tier, high-performing team surrounded by A-players is a really, really compelling differentiation. ’Cause I gotta tell you, most practices — the stuff that I’m describing right now — most practices don’t do it. Right. So if you take the time to document it and put it in front of them, you’re going to raise the bar for the caliber that is your business against your peers.

Ben Tuinei: I love it. I love it there, Perrin. So those are really amazing insights there, Perrin. I mean, there’s so many things I’m thinking about — just thinking about my dental career and how your processes are. I don’t know if, I don’t know if the CEO intentionally followed something similar to what you’re recommending, but it works.

You know, I came into dentistry taking a pay cut, but knowing full well that there’s a perk available — that I don’t have to travel a whole lot. I can work eight hours and go home, rather than working the average of 16 hours, ’cause I was working weekends with that past job. But, you know, everything tended to work out just fine.

But I felt, you know, a great level of loyalty to the CEO the minute I met him. And then compensation and the competitiveness of onboarding me as an employee — I will tell you, when you hit that, when you at least do that the right way, it just makes it so much more pleasant for a high earner — like somebody that you want to come and work with you, that aligns with you — to do that.

Ben Tuinei: So, kind of pivoting here — Perrin, you know, when associate doctors these days shop around for a new place to go to, you have a lot of DSOs that offer mentorship programs and doctor development programs, such as a promise for continuing education and all that, you know — which is, for those right out of dental school, very attractive because you’re going to get mentors that are going to help you build your skills to be competitive.

What do you have to say in sort of the smaller dental — like the smaller doctor, I should maybe say solo practitioner — community that are constantly looking for associates? What should those practice owners be thinking about in terms of this concept of doctor development and mentors?

Perrin DesPortes: Yeah, it’s a really good question, Ben, and one that — once again — I don’t think the people who are doing the hiring in an emerging group or in a solo practice give enough attention to.

So, a couple of things. You know, most of the enterprise-level DSOs do have some type of doctor development plan, and they do promote it as a reason to join that team. And, you know, for the young associate coming in, the likelihood is their clinical skills coming out of school — or even residency — are maybe marginal at best. But their clinical confidence isn’t that high, you know? And clinical confidence can be diagnosis, it can be the clinical application of whatever the treatment itself is, it could be case presentation.

Ben Tuinei: Mm-hmm.

Perrin DesPortes: It could be all of the above — and usually it is, right? And so when they join a DSO, they’re looking for repetitions, they’re looking for at-bats, they’re looking to create some greater level of competency and confidence around what they’ve studied most of their lives to become at that point.

When we have the opportunity to bring a candidate into our business, we have to think: how can we take somebody who’s got a good attitude, who’s motivated, and how can we unlock their greatest level of potential?

You know, I like to believe that the people who go to dental school are a cut above, honestly. You gotta be really bright to get into dental school, and you gotta have good grades, and it’s super competitive. So, these are motivated and bright young people that get into dental school — that’s the first thing. The best of the best, if you will. But they don’t come out knowing everything about it.

They do come out with an aspirational mindset to be a master at their craft.

Perrin DesPortes: Now, I may be a little bit on a soapbox or looking at the world through rose-colored glasses here, but I don’t think people work that hard to go to dental school, graduate from dental school, and pass the boards to do marginal dentistry. I think a lot of ’em do want to learn how to do more complicated treatment. That’s usually higher value, and thus they might derive more income from it. But they want to do more challenging, complicated stuff. Right?

And I think if there’s a way that we can build into our recruiting pitch — and the merits of our business — a multi-layered, probably multi-year type of a doctor development plan, and lay it out in front of them as if it were a school curriculum (because that’s what most of their frame of reference is at this point), we can say that in year one, we’re going to put you through X, Y, Z curriculum, and the outcome after 12 months — we would expect you to be able to do A, B, and C.

And in year two, we’re going to build upon that to do the following. And in year three, we’re going to do the following. This starts to lay out the path for them of what their coming years look like.

And the path to clinical mastery takes on a level of certainty — just like I was talking about income before. Solving for certainty — solving for the certainty around clinical mastery — is, I think, critically important. Because if somebody doesn’t want to go down that path, is that the candidate you want to give an offer to?

You know, maybe it is, maybe it isn’t. I would think that it’s not.

But if this is the point where — hey, if you join our team, Dr. Tuinei — this is my expectation of you in terms of the development process. Furthermore, here’s the amount of travel it might take if you have to go somewhere to obtain that knowledge. Here’s the cost of the doctor development plan. And I’m going to fund half of it, and you’re going to fund half of it, or something like that.

Perrin DesPortes: So now we’re getting the co-investment piece out ahead of time that tells you, “Hey, this is your career, and you shouldn’t expect me to fund the whole thing. You gotta be in it to win it every bit as much as I am with you.” And oh, by the way, when you come back from wherever it is that you’re taking these courses, I’m going to be the one helping reinforce the learning that you obtained.

And we’re going to go through this together from a mentorship standpoint. I’m going to be the one looking over your shoulder. We’re going to collaborate on cases, we’re going to talk about how to present ’em, how to diagnose ’em, and how to complete treatment on time to a high degree of patient satisfaction and all that kind of good stuff.

But this is much more of a collaborative and an active type of an approach that, in my opinion, should be part of your recruiting process. Right? Again, you’re trying to tap into somebody’s true aspirations of becoming something greater than what they are right now. Mm-hmm.

And if yours is a winning team that supports that, I think you’ve got a really, really good story to tell.

Ben Tuinei: I love it. You know, I always think about the whole concept of training associates to eventually become so great at the clinical skills that they then become a risk for being a major competitor. And in my mind, I mean, I’m thinking about my own career and it’s like — well, that’s not the case.

You know, there’s always going to be — and especially right now — despite how many doctors are coming outta school these days, there are still major segments of the country where they need dentists. You know? And there’s a lot of underserved communities.

And so when you look at it from the perspective of abundance, you know, where you’re solving the issue of finding somebody that’s going to work with you as an associate, and you’re going to mentor them — which, for me, if I were a dentist, that would be super exciting. That I get to learn from a super dentist, you know, and all the clinical skills that they have. And I get paid to work here to learn those things, you know?

And it just seems like that’s the culture among doctors these days — the younger… well, I shouldn’t say it’s exclusive to the younger generation. Every doctor I know is just hungry for knowledge. They’re hungry to learn more. You know?

So I appreciate you mentioning that there.

Perrin DesPortes: Yeah. Let me — you touched, you walked up to something and let me accentuate a point that you were about to hit on, I think. Because there is — what’s the word — there’s a healthy amount of skepticism or fear in the marketplace that, “Hey, Dr. Tuinei, if I hire you and I spend the time and effort and money and blah, blah, blah, blah, blah developing you, and then you leave… like, what do I have then?” Right?

So let’s talk about that for a second, because I think that is a very real fear, for sure. And again, this is something that we — that I kind of dive deep into with the Next Level Executive group that I coach. And that is the following…

Perrin DesPortes: Um, if you spend the time and the money to invest in the skill development of somebody that makes them a master at whatever they do, you do run the risk of losing them. Okay? Because that candidate — rightly or wrongly — when left to their own devices, starts deluding themselves into, “Hey, this is easy. I can do it too.” Right? And that is not altogether the case.

So let’s talk about how to preempt that. And first things first, if you make the dollar investment in somebody — and even if they co-invest — and they end up leaving within some X, Y, Z period of time, you ought to be able to claw that back from them, alright? Just the dollars. That doesn’t mean the person won’t leave, but at least you get some of your money back, right? That’s the bare minimum.

Perrin DesPortes: Mm-hmm.

Perrin DesPortes: But more importantly, let’s always be proactive in talking with our associate about the great strides that he or she has made from a clinical capability standpoint. “Dr. [Name], I remember when you had trouble cutting crown preps — and now you’re doing guided implant surgery. Look at how far you’ve come.”

Let’s reinforce the positive outcomes for sure. But let’s also talk about the fact that — “You know, I’m thrilled that we have the marketing engine on the front end of our business that produces the level of new patients that allows you to do that number of guided implant surgeries on a monthly basis.”

It’s taken me so many years to build the marketing, the treatment, the verbiage, the case presentation, the financing arrangements — whatever else it may be — that help the patient get in the front doors. And once it’s diagnosed, help get them to say yes.

Now, your associate does the work. Let’s give him or her credit for that. But they don’t do the work in isolation. There’s a lot that goes on around them from the front end of the business itself that creates the playing field. And then you surround them with the most capable dental assistants and treatment coordinators and people that can present financing in a way — all that other kind of stuff — in addition to the fact that you’re able to mentor them, that allows them to be the master at their craft on the playing field when the stage is the brightest.

Perrin DesPortes: Yeah. And if that is the case, it is an indirect way of you saying: can you do this on your own? Yeah. But you’re not taking any of my team with you, and it’s going to take you a heck of a long time to build the front end of the business that allows you to get back to that point.

So aren’t you better off being a high performer on an A-team than trying to do it on your own?

Ben Tuinei: Yeah. I love that you mentioned that, because that’s my philosophy exactly. People can become competitors — and I’ve trained people that are now my competitors — and I’m totally okay with that, because they don’t have the support tasks that we do, you know? So their delivery is not anywhere close to what it was when they worked here, you know what I mean?

But I like how you think about that, because in the end, you’re totally right — so many people that learn from great mentors end up burning their mentor, thinking that they’re burning their mentors intentionally or unintentionally, or feeling bad about the fact that they want to go and spread their own wings.

But almost everybody that I talk to in those situations, they agree with you. They try to do it on their own and they realize how foolish they were — abandoning a great situation and cutting off that learning process, you know? Because they don’t have it the way that it used to be.

Ben Tuinei: ’Cause they don’t — they’re missing out on two-thirds of the business setup that’s required to make an efficient practice an efficient process, no matter what extensive procedure you’re trying to do. You know — the marketing side and all that stuff.

So I appreciate you mentioning that because I think in this day and age, it’s interesting that the culture for competitive capitalistic markets these days is “What’s in it for me?” You know?

Perrin DesPortes: Yeah.

Ben Tuinei: And I think we need to be more of a mindset of “What’s in it for us together,” you know what I mean?

Perrin DesPortes: You know, success is usually a lot less about the individual and a lot more about the team. Now, we don’t like to admit that because we celebrate individuals for the success they create.

And look — if you’re Tiger Woods, then you were on a level that no one, arguably, has ever touched, right? But if you’re Tom Brady, you had the surrounding cast. You had a great defense, you had a good offensive line, you had great skill players, wonderful coaching — and, like, there was all of it, right?

And Tom Brady would tell you that. He was an incredibly accomplished athlete and a truly great quarterback, but he didn’t do it on his own. He had the team around him.

And in our world of clinical dentistry and high-flying associates, that is the model. It’s up to us as business owners to reinforce the collective success — not allow the prima donna to assume that he or she is better than everybody else and that we’re all indirectly working for them. That’s not the case.

If that is the case, you need to get ’em off your team anyway.

Ben Tuinei: Yeah, I love it. I love it there. Well, Perrin, I know that we’re getting kind of closer to wrapping up here, and — gosh, we could talk about these things… I mean, every time you say something, I’m thinking about something new. But we won’t go down those tangents in my mind.

I want to honor you with doing most of the talking here.

The last question I have is regarding the options for associates — you know, if presented. What are your thoughts about when associates are offered buy-in ownership versus earn-in ownership?

Perrin DesPortes: Yeah. So, you know, I think if you do have a high-performing associate or associates, I do think it’s prudent to be thinking of ownership and partnership along the way. And depending upon how valuable your business is, you could end up with several different methodologies. And I used to give presentations on this that would go 90 minutes in length, so I’m gonna keep it really, really brief here.

But, you know, if yours is a solo practice, the likelihood is a traditional buy-in is going to be the right vehicle to creating stability and rewarding the associate with a seat at the table and some level of ownership in the business.

If you are going to afford them the opportunity to buy in, my advice would be have ’em buy in at somewhere between 20 and 40% of the value of the business to start.

Perrin DesPortes: Mm-hmm.

Perrin DesPortes: The reason for that is — well, there are a lot of reasons for that. But first and foremost, you would like — as the founder — to maintain voting control in almost every instance that you possibly can. And an 80% ownership stake will allow you full voting control on anything that requires a simple majority (meaning 51%), or what’s known as a supermajority vote, which is usually somewhere between about two-thirds and 80%.

So a 20% buy-in allows you to keep outright control of the business. It also allows you to have further tranches of equity that you could sell this associate upon subsequent years — or possibly another associate an equal tranche down the road too. So you’re kind of protecting your ability to control the entity for the risk that you took originally to start it.

Ultimately, this is going to be a vehicle to buy you out once it’s time for you to transition out of the business and retire.

Perrin DesPortes: On the other hand, if yours is a large-footprint solo practice — think like 20 ops under one roof or something like that — I kind of think of that as like a small group practice. Even though it’s one location, it tends to have a higher valuation and more dynamics that are akin to a three- to five-location group.

You probably have multiple associate candidates, and a buy-in structure could be appropriate. The likelihood is that it’s going to be a smaller percentage, because they’re not going to qualify for as much of a loan from a bank. So if your business values at $10 million and you want them to only be a 10% owner, that’s a million-dollar loan, right?

Alright, so we gotta think about what the bank will fund when the associate’s gonna borrow money to buy in. Are they bankable? And if so, how much?

You also, in a group practice, have the opportunity to create earn-in structures — which are more akin to something that I had when I worked for Patterson. Earned equity is real equity in a company. It comes with distribution rights and voting rights typically, and economic rights if the business is sold. So it is real equity, not phantom equity.

But it’s usually a performance-driven scenario where the candidate — in this case, the associate — through his or her collection levels, if they exceed a goal, they start to earn equity in the business.

Perrin DesPortes: The nice thing for the founder is they go from being a 100% owner of a pie valued at, say, $10 million, to an 80% owner of a pie valued at $16 to $20 million or something like that. So they own a slightly smaller piece of a much larger pie.

That can be beneficial to the associate earning equity — because they don’t have to borrow money and buy in to do it — but it can also be beneficial to the founder because he or she can own a slightly smaller piece of a much larger pie and create stability along the way.

So there are pluses and minuses to all of this. Again, in my Next Level Executive program, I go through a good bit of it with the people in there. As a matter of fact, we’re going through that this quarter in the program.

So the topic we’re talking about today is a little bit near and dear to me in that respect. But I think the key takeaway — whatever the vehicle is, buy-in, earn-in, hybrid, whatever it may be — when you find the right associate that does great dentistry, that you work well with, that your team works well with, and wants to be there for the long haul, let’s figure out a way to bring ’em into partnership in the business and do it in a way that’s beneficial to them, but also is beneficial to you.

Ben Tuinei: Yeah. No, I love that. That’s an excellent way to retain amazing talent — you bring them in as a partner. And that way, the risk of losing that kind of amazing talent that is driving all kinds of amazing revenue to the business — you don’t have to worry about that.

And that’s what most high producers want — they want a stake long-term to reward their skillset with some mechanism that says, “You got it.” And ownership is one of the greatest ways that you could tell somebody how great they are.

Ben Tuinei: So Perrin — wow — you are sort of the obvious person to talk to about these things, and I hope our listeners kind of see the value and pick up the phone or, you know, keyboard and give you an email or a phone call to discuss these things.

So of course, if you’re listening to this and you have questions for Perrin, we’re gonna include his email and his direct contact information and website in the show notes. Check that out and keep this for future reference.

You know, if you’re not there yet with hiring associates or anything else that you’ve heard from Perrin, you can naturally see that it’s so easy to agree with him on these things — because these are logical things that a lot of business owners think about… or don’t think about. It’s like, “Wow, I’m gonna start focusing on that — ’cause that makes perfect logical sense.”

So Perrin, thank you for that. Any final thoughts for our listeners that you want to mention as we wrap up today’s episode?

Closing Thoughts 

Perrin DesPortes: Yeah. Thank— I mean, and Ben, the website is thenextlevelexecutive.com. They can find a link to me there to book a call. They can, you know, read blogs, listen to a prior podcast. I’ve got a podcast as well called The Next Level Executive. And I need to have you on the show at some point in the not-too-distant future too.

But if you like this kind of subject matter — you know, executive mindsets, leadership, and business knowledge — I like to say wonky business knowledge — subscribe to my podcast, you’ll get a double dose of all of that. But hopefully, a lot of what we talked about today reverberates with your audience, and I hope that they find some value in it.

And if you want a deeper dive, you can find me on any of that I mentioned before. I take calls on almost a daily basis, I feel like, from people. So don’t be shy about reaching out if there’s something I can help with.

Ben Tuinei: Oh yeah, Perrin’s definitely, in my opinion, one of the leading experts in these subjects. So give him some love there, reach out to him. And of course, I’m gonna subscribe to your podcast for sure. And you’re—

Perrin DesPortes: You’re not already, Ben? Good lord. I mean, come on.

Ben Tuinei: I’m gonna. Part of my apology for my lateness is I’ll repurpose a lot of your episodes on our stuff too.

Perrin DesPortes: Oh, there you go. There you go. I’ll grant you that, my friend. I’ll grant you that. Thank you for that. Seriously, that’s great.

Ben Tuinei: Thank you so much, Perrin. And to our listeners, I want to thank you again for joining us today — another amazing episode of the Insurance Untangled podcast.

Check out insuranceuntangled.com, not only just for this episode, but other episodes as well as future webinars and perks that we’re gonna be issuing out to listeners — just a thank you for your loyalty and for your patronage and tuning in.

Until we meet next time, we wish all of you the best of success. Take care, everybody.