Need a different pay plan

[cdhowell]

Looking for an hourly plan with incentives for production. The problem is half the work we do has no flat rate hours. The Jeep is an example. Cut off at the firewall, tube chassis fabricated, 1 ton axle swap and coil over suspension. We may go from a Kia water pump to a custom bumper on a Raptor. Other than a feel for how long it should take It is near impossible to track productivity. Any Idea's folks?

[AndersonAuto]

Anything custom like that Jeep is a "time and material" job. I have my guys punch the clock, and the customer gets charged for it. The tech gets paid straight time, so it's great fill in work for when they're not busy doing more profitable things.

[carolinahigear]

My 5 techs are paid hourly. Not flat rate. They also get a monthly bonus of 5% of their labor turned during the month. This 5% usually runs from $550 to $950 depending on work and tech. This amount usually pays their house payment for the 3 techs that have one. They also receive weekly (paid Monday) spiffs for flushes, shocks, struts, fuel services, filter, wipers, and batteries. Sometimes the weekly spiffs can be $250 to $300 per tech. They bust ass, write work, and are very productive. PLUS they're not EVEN thinking of going anywhere else for a job.

 

Hi-Gear

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I gave up a lot of custom fabrication and performance related work. I tell people that i am about "production not fabrication". Another words why would i spend hours or days fabricating something when i could do a couple brake jobs and make the same ammount of money. I send that stuff somewhere else. There are shops that are set up to do that kind of work and be profitable but a general repair facility is typically not. 

Sometimes people take that kind of work in because they are slow and i suppose its ok to fill the time but at that point it would be better to spend the time marketing to your target audience to drum up better jobs. 

[mmotley]

Technician efficiency benchmark is 125%. I'd have the technician punch in and out on the job, then multiply by 1.25. There needs to be an understanding that the technician is not to milk the clock however. 

[cdhowell]

On 12/3/2017 at 8:16 AM, carolinahigear said:

My 5 techs are paid hourly. Not flat rate. They also get a monthly bonus of 5% of their labor turned during the month. This 5% usually runs from $550 to $950 depending on work and tech. This amount usually pays their house payment for the 3 techs that have one. They also receive weekly (paid Monday) spiffs for flushes, shocks, struts, fuel services, filter, wipers, and batteries. Sometimes the weekly spiffs can be $250 to $300 per tech. They bust ass, write work, and are very productive. PLUS they're not EVEN thinking of going anywhere else for a job.

 

Hi-Gear

Labor turned? Do you mean flagged hours? Trying to understand.

 

[carolinahigear]

4 hours ago, cdhowell said:

Labor turned? Do you mean flagged hours? Trying to understand.

 

My guys clock in and out like a factory worker would, and get paid for 40 to 45 hours per week normally.  By labor turned, I mean the $dollar volume of labor produced. If Joe produces $14,000 labor for the month he gets a 5% bonus. $700.

[PAPShop]

We do a basic combination of what is discussed above.  No one is on flat rate. hourly and a percentage of hours billed.  General auto repair is billed out at book time and techs know what the job should take on book time.  On performance, there is no book time on performance jobs, however, after 10 years of business there is a knowledge base of how long it should take, and milking the time clock will not be tolerated.  Right now we h ave a group of go-getters and they were happy when the "clock watcher" was let go.  They are currently on a high after completing a restoration job, and they can't wait to finish the next performance job.  High Five's all around!

[gandgautorepair]

You can still give a bonus based on hours billed per week, or month, or pay period. Even if it's a custom job they still have to stay busy and get the hours billed. I admire guys who can make a 4x4/repair shop profitable. We started out as both, but over a few years we walked away from the 4x4 stuff. No margin in the parts, and not that many people would pay the labor charge that it takes for it to work for us. We still work on a ton of Jeeps, but no fab work anymore, and no accessories, and we haven't done a lift kit in awhile. It's hard to spend 1/2 hr or longer at the counter talking to someone about a potential build, or what gear ratio or shocks to run, while the techs are waiting on parts and approvals so they can keep busy on profitable repair work. 

As far as possible pay plans, my techs get a $2 per hour bonus if they hit 80 hours in the 2 week pay period. Just one way of doing it. This could be on flat rate or hourly.