What DSOs Get Wrong About Recruiting and Retaining Talent

Jon Fidler Pulse Equity


That’s the major pain point for DSOs looking to recruit and retain talent.

It may be a group just starting out with three locations, run by owner-clinicians who don’t have a business background. Or a group with 2000 locations and operational structures in place. Either way, there’s uncertainty — especially around tracking equity and potential sale prices.

Everybody seems to have this idea: build up to “X” number of locations, then exit. But so many DSOs don’t take the time to map things out. If they grow to 50 locations, what’s the value at exit? Is it $50 million or $100 million? They start with an idea of the current market, but it can be completely different five years down the line.

There are a lot of gray areas, especially for candidates who might come into a DSO.

Some candidates and groups have everything figured out at the beginning of a negotiation. They know exactly what’s going to happen and can lay out a clear plan. However, for most groups, negotiations don’t start from a clear baseline.

From the candidate’s perspective, they’re aware that there are many paths and challenges to reach that exit point. So many equity deals don’t come to fruition — the candidates leave, or the sale doesn’t happen. Even with this context, the exact numbers are often lacking.

They might know they have 3% or 5% equity, and what it might be worth — but then it sort of falls into the abyss. It just gets lost.

For DSOs to win the war for top talent — and further drive the value of their group — they need to provide more clarity.

Products like Pulse Equity help provide clarity. Designed with dentists and doctors in mind, Pulse is a tailored platform for managing equity in medical and dental practices. They’ve got a new whitepaper out about maximizing your DSO’s value, which I highly recommend to anyone in the space.

DSOs pulse equity

When a group offers equity, it’s one thing to say it, but it’s another to clearly show what that equity means. A group might say they’ve set aside 15% for the C-suite, or given 6% to the CEO — but it’s often unclear what these percentages translate to in terms of actual value. It helps tremendously when these numbers can be seen.

If things go exceptionally well, like hitting a goldmine, candidates can see how this improves the company’s value or the value of the transaction, effectively acting as another bonus or incentive to strive for.

There’s so much movement in the dental industry now. Candidates are increasingly seeking stability.

Providing something concrete, like a clear understanding of the equity they could earn, can offer that sense of stability.

Candidates want to know that when they join a group, especially one aiming for an exit, their hard work will be rewarded. Being able to quantify this reward, or at least illustrate a clear path to it, lends an additional layer of security. It reassures them that even though they might work themselves out of a job after a successful growth and sale, they can see and understand the end game and what it means for them.

This concept is pertinent to smaller and mid-sized groups, where adaptability is key. Every candidate values different things, and there aren’t any set rules when it comes to hiring. Groups need to be creative and flexible in their approach, whether it’s through offering equity, remote working options, additional PTO days, or other benefits.

This flexibility is essential not just for attracting talent, but also for retaining it.

pulse equity

jon fidlerWritten by Jon Fidler. As the founder/CEO of Fidler and Associates, Jon has a history of building teams by connecting talent with opportunity. For the last 17 years, Jon has focused his skills specifically within the dental industry. During this time, Jon has placed successful executives throughout the country for multi-location groups, manufacturers, distributors, and many other dental related organizations. Throughout his career, Jon has been responsible for hiring, training and developing numerous performance award-winning employees and executives.

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