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We've been looking for a new tech to help us grow recently and a topic that's come up for us is a minimum hour or weekly guarantee. I don't mind doing this at all, as I want pur techs to earn a fair and living wage. Honestly as far as I'm concerned I'd love for them to take 50% of the hourly rate including taxes - we want our employees happy and financially we'll. But I also want to be financially well, I'm concerned if I give a tech a minimum guarantee I may have productivity issues. In the same respect I'm not sure if it's acceptable to put a statement saying the minimum only applies to weeks when X amount of hours is not available or something similar. Any input?

Thanks in advance!

 

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I am just a small shop me and another guy that is just beginning.  I pay him a base pay of 12 an hour and give him 6 dollars for every flat rate hour he turns. By doing this if we are ever slow he has a base pay and also initiative to stay busy on other things such as building maintainence etc. He seems to really like it and it works good for me.

 

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I do agree that we need to pay our employees a decent wage. It's a main factor in attracting quality people to our industry. The only thing I would recommend is to carefully look at your overhead, cost of sales and make sure your generating enough profit. This may take some time, but it's worth it.  In other words, it's one thing to want to pay someone a certain amount, but you need to make sure the company earns a profit and that the technician is generating enough labor production hours.
I pay techs a base wage, which is above average in my area, and also pay production bonus on top. 
One more thing, money is not the only motivator for production. A healthy work environment, with a strong leader, and recognition of your employees will do wonders for your production.
 
Thanks Joe!
We're a small shop so we struggle with the offerings that some employees are looking for beyond pay. We do offer a family like environment that's very laid back and everyone that works for us seems to appreciate it. We could certainly use some orginization & productivity improvement but that's a struggle when the owner is turning wrenches and writing service. I think we're finally to a point where expanding is a real possibility, but we've got to find some quality techs!

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I used to struggle with this when I first started out. I found that technicians would generally ask for enough money to make sure they can pay all their bills as a "guarantee". The end result was lazy technicians. If I would guarantee a guy 30 hours plus whatever he produced above that, he would invariably produce 28-32 hours.

Years ago I decided that all my techs would be flat rate with no floor. I also put my advisor on a straight commission plan with no floor. The result has been technicians who are almost always flagging over 40, and advisors who sell. My job is to give them all an opportunity to succeed.

A side benefit to this is in the bookkeeping. My tech wages are calculated as a COGS as they have a direct correlation to billed labor. It makes life easy when you're looking at your labor profitability vs ELR etc. Having a disconnect between labor hours billed and technician wages muddies the waters a bit. And since I'm the laziest human being on the planet, I like easy.

No matter what you do with your pay plan, one adage I always go back to is "There's no better manager than a properly structured pay plan". If your pay plan by default has your employees doing what you want them to do, life gets easy for everyone.

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I pay a healthy living, hourly wage for the slow times and when the RO's just don't work out for whatever reason for the Tech. I want them to earn a percentage of what they produce and give them their hourly or the % of their production, whichever is greater. From the accounting side it works best to pay them hourly and then calculate the % as a bonus when they hit minimum production levels. 

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  • Have you checked out Joe's Latest Blog?

         0 comments
      It always amazes me when I hear about a technician who quits one repair shop to go work at another shop for less money. I know you have heard of this too, and you’ve probably asked yourself, “Can this be true? And Why?” The answer rests within the culture of the company. More specifically, the boss, manager, or a toxic work environment literally pushed the technician out the door.
      While money and benefits tend to attract people to a company, it won’t keep them there. When a technician begins to look over the fence for greener grass, that is usually a sign that something is wrong within the workplace. It also means that his or her heart is probably already gone. If the issue is not resolved, no amount of money will keep that technician for the long term. The heart is always the first to leave. The last thing that leaves is the technician’s toolbox.
      Shop owners: Focus more on employee retention than acquisition. This is not to say that you should not be constantly recruiting. You should. What it does means is that once you hire someone, your job isn’t over, that’s when it begins. Get to know your technicians. Build strong relationships. Have frequent one-on-ones. Engage in meaningful conversation. Find what truly motivates your technicians. You may be surprised that while money is a motivator, it’s usually not the prime motivator.
      One last thing; the cost of technician turnover can be financially devastating. It also affects shop morale. Do all you can to create a workplace where technicians feel they are respected, recognized, and know that their work contributes to the overall success of the company. This will lead to improved morale and team spirit. Remember, when you see a technician’s toolbox rolling out of the bay on its way to another shop, the heart was most likely gone long before that.
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