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Got your attention? Good. The truth is, there is no such thing as the perfect technician pay plan. There are countless ways to create any pay plan. I’ve heard all the claims and opinions, and to be honest, it’s getting a little frustrating. Claims that an hourly paid pay plan cannot motivate. That flat rate is the only way to truly get the most production from your technicians. And then there’s the hybrid performance-based pay plan that many claim is the best.
At a recent industry event, a shop owner from the Midwest boasted about his flat-rate techs and insisted that this pay plan should be adopted by all shops across the country. When I informed him that in states like New York, you cannot pay flat-rate, he was shocked. “Then how do you motivate your techs” he asked me.
I remember the day in 1986 when I hired the best technician who ever worked for me in my 41 years as an automotive shop owner. We’ll call him Hal. When Hal reviewed my pay plan for him, and the incentive bonus document, he stared at it for a minute, looked up, and said, “Joe, this looks good, but here’s what I want.” He then wrote on top of the document the weekly salary he wanted. It was a BIG number. He went on to say, “Joe, I need to take home a certain amount of money. I have a home, a wife, two kids, and my Harly Davidson. I will work hard and produce for you. I don’t need an incentive bonus to do my work.” And he did, for the next 30 years, until the day he retired.
Everyone is entitled to their opinion. So, here’s mine. Money is a motivator, but not the only motivator, and not the best motivator either. We have all heard this scenario, “She quit ABC Auto Center, to get a job at XYZ Auto Repair, and she’s making less money now at XYZ!” We all know that people don’t leave companies, they leave the people they work for or work with.
With all this said, I do believe that an incentive-based pay plan can work. However, I also believe that a technician must be paid a very good base wage that is commensurate with their ability, experience, and certifications. I also believe that in addition to money, there needs to be a great benefits package. But the icing on the cake in any pay plan is the culture, mission, and vision of the company, which takes strong leadership. And let’s not forget that motivation also comes from praise, recognition, respect, and when technicians know that their work matters.
Rather than looking for that elusive perfect pay plan, sit down with your technician. Find out what motivates them. What their goals are. Why do they get out of bed in the morning? When you tie their goals with your goals, you will have one powerful pay plan.
By Joe Marconi
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In this end-of-year update podcast episode, Coach Chris Cotton from Auto Fix Auto Shop Coaching, along with Coaches Mike, Brent, and Al, discuss the challenges and successes of running auto repair shops. The coaches highlight the importance of having a cohesive team, dealing with parts availability and cost increases, and the need for clear career paths for technicians. They also discuss the impact of high interest rates on the industry, the challenges of finding replacement parts, and the trend of shops closing due to lack of succession plans. The podcast ends on a positive note, with the coaches sharing success stories and expressing their excitement for the upcoming year.
The impact of lockdown team on shop performance (00:01:44) Coach Mike discusses how establishing a strong team atmosphere and having the right technicians greatly impacted his shop's performance. Hiring an additional staff member (00:03:05) Coach Brent talks about the positive impact of hiring his son as an additional staff member, relieving him from various duties and reducing stress. Improving staffing and team dynamics (00:04:59) Coach Al shares how having a cohesive team and implementing employee rewards helped improve workflow and reduce turnover in his shop. Technicians struggling to find parts (00:10:29) Discussion about the challenges of finding parts and the need to raise labor rates to compensate for the time spent searching. Increasing cost of parts (00:11:51) Conversation about the rising costs of parts and the impact it has on the industry, including the need to update quotes more frequently. Dealerships marketing against independent shops (00:13:09) Discussion about a dealership specifically targeting an independent shop and the use of geofencing and advertising to compete. The technicians' perception of income (00:20:01) Discussion on how front-end guys buying new campers led to the perception that they were making more money, and how this perception changed after a hierarchy was shown. Providing a path forward for technicians (00:21:13) Importance of building a foundation and providing growth opportunities for technicians, including training, job experience, and addressing productivity levels. The cost of owning a shop and technician frustrations (00:23:21) Discussion on the financial aspects of owning a shop, including insurance costs, and how it can discourage technicians from wanting to start their own shop. Also, the importance of having a path forward for technicians and helping them reach their goals.
Note: Only three timestamps were provided in the given transcription segment.
The average age of vehicles is increasing (00:30:17) Discussion on the shortage of used cars and the rising cost of repairs on newer vehicles. The increase in repairs on 18-20 model vehicles (00:31:08) Exploration of how the high cost of replacing vehicles is leading to more repairs on newer vehicles. Challenges faced by unsuccessful shop owners and the trend of shop closures (00:35:08) Conversation about the difficulties faced by shop owners who are not profitable and the increasing number of small shops closing their doors. Success Stories and Relief for a Mechanic's Wife (00:40:23) A coach shares a success story of a mechanic who implemented coaching recommendations, leading to increased profits and reduced stress for his wife. Small Town Success (00:41:50) A small town auto shop in rural Kansas achieves record-breaking success and hosts community events with high turnout. Setting Up Business Foundations (00:42:59) A coach discusses the importance of establishing a strong foundation for auto repair businesses and the satisfaction of helping clients build successful structures. 00:51:06 - The Outlook for 2024 Discussion on the potential success of the auto repair industry in the coming year and the importance of treating customers and employees right. 00:51:37 - The Importance of Coaching Encouragement for struggling shop owners to seek coaching or join peer groups to improve their businesses. 00:53:28 - The Power of Coaching Personal testimonial of the impact of coaching on the success and growth of an auto repair business.
Connect with Chris:
#autofixautoshopcoaching #autofixbeautofixing #autoshopprofits #autoshopprofit #autoshopprofitsfirst #autoshopleadership #autoshopmanagement #autorepairshopcoaching #autorepairshopconsulting #autorepairshoptraining #autorepairshop #autorepair #serviceadvisor #serviceadvisorefficiency #autorepairshopmarketing #theweeklyblitz #autofix #shopmarketingpros
Click to go to the Podcast on Remarkable Results Radio
By Joe Marconi