“MILLENNIALS” are people born between 1980 and 2005.1(p3) They’ve grown up in a much different world than previous generations and are already showing some very interesting tendencies as they enter the workforce.
I’ve been brokering dental practices for 28 years, and it was traditionally assumed that most young dentists would go into private practices for themselves. In recent years, I have been increasingly concerned that the millennial generation may be different. Do young dentists want their own practices? Can young dentists afford to purchase or start their own practices?
Student loan debt is one major factor in the changing behaviors among young dentists. The total outstanding student loan debt in America surpassed #1 trillion dollars in 2014, cause in part by a nearly 100% increase in tuition expenses and a dramatic drop in state funding for schools.1(p16) This is due in part to reduced funding to state schools from state sources (i.e., budget cuts), which schools have compensated for by tuition hikes. In 1989, revenues from state sources accounted for 52.2% of total revenue for universities, but the figure shrunk to 12.5% by 2012.2(p16)
Here’s the bottom line: The average dentist how has $247,000 in debt after finishing his or her education.2(p18) Young dentists with this much debt look at initial career choices in a different light that young dentists did 20 years ago.
These financial challenges have a great impact on millennial dentists’ ability to choose their preferred career paths. I believe that many do not want to spend their careers working for a conglomerate or large network. However, nearly 50% of recent grads say they will consider corporate dentistry as their first job.3
The recession also had a large impact on the personal finances of millennials. Their generation has significantly lower credit scores and more debt that previous generation, meaning they will require some serious financial counseling before they’re in a position to make purchases like a home or a dental practice.
The historic economic downturn of the past decades has also shown millennials that the job market is unpredictable at best. They’ve responded by starting their career later in life, not working while going to school, and remaining longer with their first employer after graduation.
Finally, the percentage of women in dental schools has been steadily increasing to where they now account for approximately 50% of graduates.1(p16) Women tend to give preference to a balanced professional and personal life, raising children and sometimes caring for elderly parents while also growing their careers. This means that owning a practice is sometimes not a top priority for them.
What does all this mean for the generation of dentists preparing to retire?
Statistics tell us that roughly 42% of the working dentist population is over 55, meaning there will soon be a greater number of retiring dentists looking to sell their practices.4 Selling a private practice could become a much more difficult task than it was a few years ago if the pool of buyers is shrinking while the number of practices available is increasing.
There are extraordinary changes that are going on in dentistry today, and they will affect the profession in significant ways and in turn the buying, selling, and valuing of dental practices. It will be interesting to see how millennial dentists respond to these changes. In spite of their student debts and regardless that half the graduates are women, I believe there will always be a sizable proportion of young dentists who want the freedom that comes with owning a dental practice. These dentists want clinical autonomy and realize that their growth potentials are truly unlimited by working for themselves.
1. 15 Economic Facts About Millennials. Washington, DC: The Council of Economic Advisers; 2014.
2. Solomon E. The Future of Dental Practice – Dental Education. Dental Economics. 2015;105(1):16.
3. Diringer J, Phipps K, Carsel B, Critical Trends Affecting the Future of Dentistry: Assessing the Shifting Landscape. 2013. Page 8.
4. Solomon E. Dental workforce trends and the future of dental practices. Dental Economics. 2015;105(2):22.