MECHANIC PAY PLAN

[integritytrans]

Hello All,

I hope in these uncertain times that you all stay healthy and continue to thrive with your shops.

Questions/needed guidance from the forum would greatly be appreciated. I currently have 1 mechanic  that is salary. This mechanic takes on heavy line work for us. Removing and installing transmissions. Engine replacements. Things of that natue.

I am adding another mechanic to my crew and wanted him to be on a more flag/possible performance pay plan to suit his style of work for daily jobs that would include maintenance work, brakes, tune ups, ETC. I was curious what pay plans you all had out there for a mechanic of this style and possibly pros/cons to it as well

Any and all help would be greatly appreciated. 

Henry 

[Joe Marconi]

Henry, there are many different ways to create a pay plan. Are they any trade organizations in your area. The reason I ask is that there are many labor laws you need to be compliant with.  For example, in my state, Flat Rate is not legal. 

I hate to be vague, but I just want to make sure you get the right information.  Pay plans can be complicated. However, the right pay plans can incentivize the right people. 

[dfrisby]

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[DUFRESNES]

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[Joe Marconi]

43 minutes ago, DUFRESNES said:

I have been in Auto Repair Business going on 54 years.  There are always ups and downs with employees.  Right now I have 4 technicians, 2 are hourly with commission  (B Techs)  and 1 fully certified in everything and the other one is a diag technician very good with no certs.  All employees have been here 5 years or more.  I am interested in what are you paying per labor hour.  They are asking for 45-60.  We now pay 35 for the diag tech (with no certs) and 38 for the ASE cert Tech.  I feel this is a good wage, but they feel that the Service writer makes a lot more due to labor rate changes.  We did a million and half last year in our small location.

That is a tough question to answer without being too general in nature. However, here's my opinion.  I am in New York, and it's not uncommon for top techs to ask for 40 to 50 an hour.

BUT, the bigger question is how to pay that salary. A lot goes into it: Production, the type of work you sell, your labor rate, are you charging more for labor with jobs that don't include parts; such as complicated computer-related problems?

I am going to state a disclaimer before I continue: THE FOLLOWING IS GENERIC IN NATURE, AND YOU MUST DO YOUR OWN MATH TO DETERMINE YOUR LABOR RATE.

Now with that said, to pay a tech $45.00 your labor rate for that tech (at 100% productive) needs to be around $180.00 per hour.