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Flat Rate VS Salary Debate [THA 289]


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Are you doing flat rate, salary, or a hybrid model? What are the pros and cons of all three? My panel brings light to this hot topic from different perspectives. The consensus from the group is there is no cookie-cutter model on pay plans you must factor in your culture and your team.

Jeff Grassman, Carsmart Auto Service, Sumner, WA

Carlo Sabucco, Sil’s Complete Auto Care Centre, Oakville, ON. Carlo’s previous episodes HERE.

Dave Schedin, CompuTrek Automotive Management Systems. Dave’s previous episodes HERE

Key Talking Points

  • Flat rate shouldn’t be used to fix problems
  • A flat rate feels secure when there is a lot of work to be done, and there is tangible potential in front of them that they can get paid for. They fear when they don’t see the car count or have advisors who can’t sell and cater to presenting to “not get a no” from Mr. or Mrs. Jones.
  • The hybrid model: performance-based pay. It has a base to lead those with hourly fear to feel a bit of security and the abundance reward that can be created from getting paid for producing more than 8 hours per day.
  • All pay systems are good systems if the shop wins, the customer wins, and the employee wins.
  • The mindset behind flat rate is “ a worker is worth their wages.” They have the opportunity to create an increase which is about an abundance mindset. This mindset motivates itself.
  • The misconception that hourly is “safer” creates a scarcity or fear-based mindset. It always needs prodding to produce higher results at the level flat-rate can produce.
  • “Shorten the racetrack” by investing in multiple tools 
  • Get your techs excited about their efficiencies and quality of life
  • Ask your employees what their ‘love language' is

 

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Important Books

Check out today's partners: Shop-Ware: More Time. More Profit. Shop-Ware Shop Management getshopware.com Delphi-Call-to-action.png       Delphi Technologies: Keeping current on the latest vehicle systems and how to repair them is a must for today’s technicians. DelphiAftermarket.com ARN-Website-Banner-July-2022-1200x400-1. Screenshot_340-1.png

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  • Have you checked out Joe's Latest Blog?

         5 comments
      I recently spoke with a friend of mine who owns a large general repair shop in the Midwest. His father founded the business in 1975. He was telling me that although he’s busy, he’s also very frustrated. When I probed him more about his frustrations, he said that it’s hard to find qualified technicians. My friend employs four technicians and is looking to hire two more. I then asked him, “How long does a technician last working for you.” He looked puzzled and replied, “I never really thought about that, but I can tell that except for one tech, most technicians don’t last working for me longer than a few years.”
      Judging from personal experience as a shop owner and from what I know about the auto repair industry, I can tell you that other than a few exceptions, the turnover rate for technicians in our industry is too high. This makes me think, do we have a technician shortage or a retention problem? Have we done the best we can over the decades to provide great pay plans, benefits packages, great work environments, and the right culture to ensure that the techs we have stay with us?
      Finding and hiring qualified automotive technicians is not a new phenomenon. This problem has been around for as long as I can remember. While we do need to attract people to our industry and provide the necessary training and mentorship, we also need to focus on retention. Having a revolving door and needing to hire techs every few years or so costs your company money. Big money! And that revolving door may be a sign of an even bigger issue: poor leadership, and poor employee management skills.
      Here’s one more thing to consider, for the most part, technicians don’t leave one job to start a new career, they leave one shop as a technician to become a technician at another shop. The reasons why they leave can be debated, but there is one fact that we cannot deny, people don’t quit the company they work for, they usually leave because of the boss or manager they work for.
      Put yourselves in the shoes of your employees. Do you have a workplace that communicates, “We appreciate you and want you to stay!”
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