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Posted

Just wanted some opinions on labor rates. The management teachers always say to charge an uneven amount like 82.74 so it is harder for the customer to figure out. How many use this method and is it a good idea? Dealerships do not do this and they have no problem making lots of money.

Posted

Many don't know this, but in New York, you do not have to post a labor rate. So, I don’t post it. All I am required to do is to let the public know how I calculate my labor prices. My sign in my customer waiting area states:

 

“Labor rate may be computed by either hourly rate, which is multiplied by clock hours and / or flat rate manual.

 

Most labor costs are charged by method of menu pricing only. E.g.: oil service, wheel alignment, wheel balance, tire mounting, or diagnostic analysis.

 

You, as the consumer, have the right to additional information and explanation on labor costs upon request.”

 

I don’t know what the laws are in your area, but my opinion is to get away from talking about time. Many of the jobs we do are menu prices and don’t fall into an hourly labor rate. For example: a brake job that takes you 30 minutes you may have a menu price for 1 hour.

To answer your question, having a number like $82.74 is harder to calculate, but do you really need that to avoid confrontation by the customer? There must be a better way.

Posted

I was just wondering how many use the odd number method. I don't need it to avoid conflict with the customer. I try to never talk about the rate and if asked I say it depends on the job.

Posted

I use an odd number both for my labor rate ($59.97) and my shop supplies amount (8.01%). The example that was used for me was what Walmart does. They won't use even numbers and they also only use 3, 7, 9 price number endings if I can remember properly.

Posted

I don't know that it really matters a lot. Very rarely do I get asked what our labor rate is. Your labor rate needs to be what you need to be profitable and in line with your market. Our is currently $78. CARMandP where are you at in Tennessee. My daughter and son-in-law live in Cleveland, TN.

 

 

Hey I am in Cleveland, TN. It is a nice town. Where do your daughter and son-in-law go for auto service?

Cleveland is still a small town, I might know them.

 

Tony Gobble

www.gobblesauto.com

Posted

The only time I have been to Cleveland was to visit a friend at Lee University. That has been more than 10 yrs ago but that campus was very nice. I saw a program put on my the drama team that was probably one of the funniest things I have ever seen.

Posted

My son-in-law is a minister so they don't have a lot of money. They come to dear old dad for almost everything that will wait until they get to Indiana but I should hook them up with you. There names are Craig and Janna Jones. Craig works for Norvel Hayes Ministries. Craig and Janna even have their own web site. They are both tremedous singers and musicians. They met at Lee University in Voices of Lee Craig Jones Ministries Worship

 

Hey I would love to meet them. I understand wanting Dad to take care of things. If I can ever help them I would be glad to. I will make sure they are well taken care of. Lee University is a great school and a lot of talented folks come from there. Have a great week.

 

Tony Gobble

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  • Have you checked out Joe's Latest Blog?

         0 comments
      The Technician Shortage Is Our Fault, And It's Time We Own It
      Nearly every day, I hear shop owners complain: "There's a technician shortage. We can't find qualified people. There's no one out there." If that's true, then who's to blame?
      The industry? The schools? The government? I don't know how you feel, but who promised us an endless supply of qualified technicians?
      Another common complaint is that young people do not want to work in the trades. Well, if that were true, then why are other trades such as HVAC, electrical, and plumbing growing? What are they doing that the automotive industry is not? 
      Here's the reality we need to face: We do have a problem, but we shouldn't look for someone or any entity to rescue us. Not the government. Not the trade schools. Not the recruiting companies. No one owes us a workforce. If we want great people in our industry, it's up to us. At some point, we need to own up to the truth: Building a pipeline of qualified technicians is our responsibility.
      In this blog article, I will break down the key reasons we are in this situation today and what we, as an industry, can do to solve the technician shortage. Are you ready to look in the mirror?
      Have We Pushed Technicians Away?
      Let's take a look at flat-rate pay. True flat rate, which pays a technician only for the hours they produce, is a controversial pay plan that emphasizes high production levels and creates a competitive work environment that, if not properly controlled, can lead to increased mistakes and a decline in morale and team spirit. Additionally, the stress and physical demands placed on technicians as they age are not favorable to long-term employee retention. What do we do with technicians as they grow older into their fifties and begin to slow down? 
      I have heard all the arguments and pros and cons of flat-rate pay, and I am not going to judge any pay plan. Let the facts speak for themselves. True flat rate has changed in most areas around the country and has evolved into a pay plan that gives technicians some pay guarantee.
      Many shop owners have learned that team morale, along with the opportunity to earn income, is important to technicians and to the company's long-term success. But let me ask you: how many technicians have left or been pushed out over the years because of the old flat-rate pay system?
      Another issue is the workplace environment. I remember being grateful to be hired as a young technician at a local repair shop. While very thankful, the work environment was not ideal. The shop owner kept the bay doors open year-round (I am from New York) unless it rained or snowed. He felt that if the bay doors were closed, customers might think we were closed for business. We had no heat and no hot water. Many of the jobs were done outside, year-round,  in all types of weather. The starting pay was minimum wage, with no benefits, sick days, or vacation pay. 
      Now, again, I need to point out that I was truly grateful for the opportunity this shop owner gave me. I learned a lot working there, and the experience was pivotal in my career. But looking back, I wonder how many people were discouraged by these working conditions?
      While the physical demands of the repair workplace are daunting, perhaps even more critical is the culture. Too many of my generation shop owners preached the mindset of "my way or the highway." We were the business owners, after all. We started our companies, took all the risks, and provided jobs. Why shouldn't we be the ones to set the ground rules our way?   
      Many of us found over the years that the "my way or the highway" mentality was a sure way to isolate employees and make them more likely to look over the fence for greener grass. In other words, it led many technicians to seek employment elsewhere, where they felt they could be appreciated and recognized for their hard work. The issue, however, was that there wasn't much green grass around. Disappointment after disappointment, bouncing from repair to repair shop, eventually led to despair. So, I ask you: were workplace conditions a contributing factor in today's technician shortage?
      Another factor that we are all well aware of is the complexity of the modern automobile. When I started, the work was mostly physical, and you were required to master essentially three vehicle models: General Motors, Ford, and Chrysler. Let's fast-forward to today. The evolution of automotive technology, along with the extensive training and tools required, has outpaced the typical technician's pay compensation, with no clear career path. Again, leading to frustration and insecurity about the future.
      Here is the bottom line: people don't leave their job; they leave their experience. We must do a better job. 
      The News Isn't all Bad; Your Next Steps to Fix the Technician Shortage
      To fix the technician shortage, it will take a combined effort from everyone in the automotive industry, particularly automotive shop owners. Shop owners are in the perfect position to make the greatest impact, not only on their businesses but also on the future automotive workforce.
      First, shop owners must become better leaders and understand that their ultimate success is directly dependent on the people they assemble around them. Any shop owner who mistakenly believes they can build an empire solely on their abilities is destined for serious disappointment. Business owners who think like this will eventually plateau. Without the collective contributions from a team of qualified people, your business will stall; it will not continue to grow.
      Create a workplace that attracts top talent: a clean, professional, well-equipped facility designed to support productivity, teamwork, and a career, not just a job. Build a great reputation in your community by getting involved locally. Become the auto repair shop that people take notice of as "the" place to work.
      Next, shop owners must become more financially knowledgeable. Knowing your numbers and what you need to achieve for a strong bottom-line profit is essential to paying technicians the money they need and deserve. Profit will also allow you to compete with other trade industries by providing a benefits package that has real take-home value and security.
      When it comes to culture, this is where the rubber hits the road. People crave recognition, praise, and a sense of purpose. Despite what you hear, people are not just money-motivated. Once people feel secure in their financial situation, retaining and motivating technicians can only be achieved by connecting with them on an emotional level. You cannot show enough appreciation. Give out praise for a job well done as if your business depended on it, because it does.
      As technicians age, we need to have a place for them. Expecting a 58-year-old to perform like a 35-year-old is unrealistic. We need to be more focused on career pathing. Provide training, skill development, and coaching to develop leaders and mentors within our older workforce. While their bodies may have slowed, the knowledge they have gained is priceless. 
      Our future is dependent on young people entering our industry. We need to give more young people opportunities. Every shop owner across the country should consider hiring an apprentice, then build an apprentice training plan and career path for them. If every shop did this, we could solve the technician shortage within five years. Get involved with the trade schools and high schools in your area. Look into the NAPA Apprenticeship Program. Don't sit on your hands with this one. Do it today.
      Lastly, don't get left behind. Commit to ongoing training for all your employees. Keep up to date with tools and equipment tailored to your business model. Don't try to be all things to all people and all vehicles. Identify your core profile customer and the vehicles they drive, and become an expert on those vehicles and the services you offer.
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