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Technician Pay Structure

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I'm curious to hear about pay structures out there that are successful.  We pay all of our techs hourly, regardless of what is billed, and then offer a bonus program based on productivity each week.  Ie, they bill 60% of the time they were paid for, they get $xx additional dollars per hour, bill 70%, get $x, bill 80%, get $x etc etc.

Anyone have any pay structures that are working well for them that they would want to share?  I've debated flat rate, but not sure how other non-billable tasks would get handled - ie unloading tire deliveries, cleaning up the shop, shuttling customers, etc.  

Our current structure seems difficult for the techs to track, so I'm hoping to simplify as well as motivate them.  

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I would be happy to share my program but it is similar to yours in the fact we pay hourly and an efficiency bonus on top. I have 2 lead techs and they are paid hourly only.

Bigger question is what do you wish to accomplish by changing pay plans? The first thing that stood out about your post is the question about non billable tasks. Imagine your tech as a tool for a moment. Your company is not making money if the tool is not working. I would bet the average tech bills out $180 an hour in parts and labor. That's $3 a minute. They say when you take a tech off a job is takes a minimum of .2 to get his mind back to the task at hand. Thats 12 MINUTES. 12 x $3 = $36 of unrealized billable time. That would pay a helper 3 1/2 hours to unload a truck, empty garbages, clean floors and or anything else that needs doing. This frees up the techs to MAKE money for the company.

I would take a day and sit out in the shop, analyze everything the techs do that is not billable and figure out how to have helpers/porters anyone else but the techs do. The fastest way to true profitability is through tech efficiency and productivity. If you focus on this you will crush the numbers AND have very happy techs because they will finally be making what they should as techs, not garbagemen....truck unloaders, floor sweepers, shuttle drivers, etc.

Dont pay a $30 broom to sweep the floor when a $10 one will do the job just as well....


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Thanks for your reply, and definitely need to consider your comments.  I'm ultimately looking for a motivating pay structure, where the employees are involved in tracking their performance and are aware as the week unfolds how they are tracking.  I'm not sure if our structure is too confusing, maybe... I don't feel the employees have a sense of where they are at, as I see them missing bonuses sometimes by a half hour give or take.  I will contact you for more info - thank you!

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My guys are all paid hourly plus spiffs plus monthly percentage of labor turned. These guys get paid on Friday and again on Monday when they receive their spiff money. They work very, very hard and are super productive, and are doing high-quality work and are not trying to beat the clock. When broken bolts and/or other situations arise, they take care of them knowing that they are getting paid. One reason this works for me is because I have built a very dedicated, capable, and talented team who absolutely love their jobs, our environment, and our work ethic.



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  • 2 weeks later...

I pay my A tech a salary and a % of upsold services.

My question is about the quick service tech.  I normally start around $15/hr for that position but want to find a way to incentivize that role as well for the upsells.  In the past, I tried to pay a % of the upsells the tech made but that became hard to track because each checklist had to be held out and it was cross referenced with the customer request to verify it was an upsell and given the car count for that position it became a logistical nightmare on payroll night. 

When I don't have the incentive there I find that the guys start off strong then continue to go through the motions with little end result.  

How are you all handling the bonuses for quick service? 

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  • 2 years later...

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  • Have you checked out Joe's Latest Blog?

    • By Joe Marconi in Joe's Blog
      Typically, when productivity suffers, the shop owner or manager directs their attention to the technicians. Are they doing all they can do to maintain high billable hours? Are they as efficient as they can be?  Is there time being wasted throughout the technician’s day? 
      All these reasons factor into production problems, but before we point fingers at the technicians, let’s consider a few other factors.
      Are estimates being written properly? Are labor testing and inspections being billed out correctly? Are you charging enough for testing and inspecting, especially for highly specialized electrical, on-board computer issues, and other complex drivability work?  Is there a clear workflow process everyone follows that details every step from the write-up to vehicle delivery? Do you track comebacks, and is that affecting production?  Is the shop layout not conducive to high production? For example, is it unorganized, where shop tools, technical information, and equipment are not easily accessible to every technician?  Are you charging the correct labor rate and allowing for variables such as rust, vehicle age, and the fact that most labor guides are wrong? Also, is there effective communication between the tech and the service advisor to ensure that extra labor time is accounted for and billed to the customer? These are a few of the top reasons for low productivity problems. There are others, but the main point is to look at the entire operation. Productivity is a team effort.  Blaming the techs or other staff members does not get to the root cause in most cases.
      Maintaining adequate production levels is the responsibility of management to create the processes that will lead to high production while holding everyone accountable. 
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