What Does Losing an Employee Actually Cost You? The Answer Will Surprise You.

Most practice owners think about employee turnover as an inconvenience. An interruption. Something that costs some time and some energy to work through before things get back to normal.

It is not an inconvenience. It is one of the most expensive events that can happen inside your practice. And most owners have never seen the real number.

The $64,000 Question That's Worth Far More

This is not just a dental practice problem. I was recently talking with a close friend of mine who leads an entire division of an engineering firm. He was in the middle of fighting for a new hire who had been with the company less than a year but was already demonstrating capabilities well beyond her current pay grade.

He went to HR and made the case. He fought to get her a raise and made sure she understood clearly how much the company valued her work, her skill set, and her commitment. He did not wait for her to start looking elsewhere. He acted before the conversation became necessary.

He and I quickly realized we are completely aligned on this. And the core of that alignment came down to one observation that I hear almost nobody in practice management talking about openly.

We spend significant time, energy, and money attracting and hiring great people. And then almost immediately that effort goes cold.

The Hiring Investment Nobody Accounts For

Think about what it actually costs to bring a new team member on board. Job postings. Time spent reviewing applications. Multiple rounds of interviews. The hours your team spends in that process that are not being spent on production. The onboarding. The training. The learning curve while the new hire gets up to speed. The mistakes that happen during that ramp-up period and what those cost.

And before all of that there was the pitch. You told that candidate about your practice. You painted a picture of the culture, the team, the opportunity. You were deliberate and enthusiastic about bringing them in.

The question is how hard you are fighting to maintain that same momentum after they become an employee. The same level of deliberate effort. The same energy. Because in most practices the answer is that the effort drops off significantly the moment the offer letter is signed.

What Turnover Actually Costs

I have shared this number in presentations for years and I still watch people's expressions shift when it lands.

One employee position turning over can cost anywhere from 100% to 200% of that employee's annualized salary. Minimum.

Most people do not believe it at first. So let me show you where that number comes from.

There is the cost of the vacancy itself. Production that did not happen because the seat was empty or because remaining team members were stretched covering responsibilities that were not theirs. There is the cost of recruiting. Posting, screening, interviewing, and selecting a replacement. There is the cost of onboarding and training. There is the productivity loss during the ramp-up period while the new hire learns the systems, the patients, the culture, and the pace. There is the cost of mistakes made during that learning curve. And there is the less visible but very real cost of the disruption to the team, to the patient experience, and to the momentum of the practice while all of this is happening.

Add it up honestly and 100% to 200% of annualized salary is not an exaggeration. For certain roles, particularly those that are deeply embedded in patient relationships, systems management, or clinical coordination, the number can go significantly higher.

The Raise Conversation Most People Avoid

Here is where I want to challenge you directly.

Do your employees know what it takes to earn their next raise?

In my experience working with practices across the country I would say that at minimum 90% of employees do not know and do not understand what it takes to advance their own compensation. And a significant part of the reason is that managers and practitioners avoid having that conversation entirely. Not because they do not care. Because they do not want to open a discussion about money that they do not feel prepared to have.

That avoidance is costing you far more than the raise you are afraid to discuss.

Here is the reframe I want you to consider. The raise conversation is not a threat to your overhead. It is one of the most powerful retention and performance tools available to you. The moment you sit down with a team member and clearly outline exactly what it takes for them to earn their next raise you have transferred the accountability entirely to them. You have told them precisely what technical skills to develop, what soft skills to sharpen, what performance standards to meet. They now have a roadmap. And the outcome of that roadmap is completely in their hands.

You should be looking forward to that conversation. Not dreading it.

My friend from the engineering firm did not wait for his new hire to start quietly updating her resume. He saw her worth, made the case before she had a reason to leave, and locked in a team member who had already demonstrated she was worth fighting for. That is deliberate leadership. And it is far cheaper than the alternative.

The Secrecy Problem

There is one more element of this that I want to address because it creates unnecessary stress for practice owners and unnecessary tension inside teams.

Compensation secrecy. The unspoken rule that nobody talks about what they make.

When compensation is treated as a secret it creates an environment where assumptions fill the void. Team members compare. They speculate. They feel undervalued without any basis for knowing whether that feeling is accurate. And when someone eventually leaves for more money elsewhere you are left wondering whether a different conversation at the right time might have changed the outcome.

When you remove the secrecy around compensation and make it open and transparent within a clearly defined structure, something shifts. Team members understand what the compensation levels are, what it takes to reach each one, and where they stand relative to that path. The anxiety around the topic dissipates. The entitlement mentality that comes from arbitrary raises dissolves because the standard is known by everyone.

Your level of compensation should function as a monthly reminder of how much you value that person's contribution. When it is structured transparently and tied to clear performance standards it communicates that value consistently without anyone having to say a word.

Do that well and you will reduce your turnover. You will reduce the overhead that turnover creates. And you will build a team that understands exactly what they are working toward and why it is worth staying to get there.

Let's talk.