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In case you were hibernating the last year and half, you had to notice all the increases around you. From food, gas, utilities, taxes, insurance, etc., etc., etc. Not to mention all the training and tool investment we must make from now on, to remain in the business.

I have been preaching this for decades: As an industry we don't charge enough, especially when it comes to labor. 

While there are ways to increase labor dollars, for example: becoming more productive, making sure that we charge for complex testing and driveability; Base labor rates have to factor in as the most important KPI in your business.

Do the math, get help from a coach if you need help calculating your labor rate.

A real Down and Dirty calculation:  If you have one tech and you pay this tech $35 per hour ($42 loaded), then this tech has to bill $140 of labor for every hour worked.  ASSUMING THIS TECH IS 100% PRODUCTTIVE. 

DISCLAIMNER:  THIS IS A REAL DOWN AND DIRTY QUICK CALCULATION, SEEK ADVICE IF YOU WANT A MORE ACCURATE REQUIRED LABOR RATE. 

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  • Have you checked out Joe's Latest Blog?

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      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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