Quantcast
Jump to content


Who pays....the shop owner or the mechanic?


5 Star Auto Spa

Recommended Posts

I just had a quick question I wanted to ask some other shop owners. Just a little background but we are a mechanic shop that pays hourly and not flat rate. If your mechanic diagnoses a vehicle for problem X and after the customer approves and the repair is completed, problem X is not fixed but additional parts and labor are needed to fix the problem, how do you all proceed? Does the wrongly diagnosed parts or labor or both get taken out of the mechanics pay?

 

Also, if a mechanic breaks something on the vehicle while doing the repair, does the mechanic pay for it or the shop owner? I wanted to get a better understanding of how other shops are handeling these 2 situations.

Link to comment
Share on other sites


Grammarly Writing Support


The #1 Writing Tool


Grammarly Writing Support

As a shop owner, I feel that I am responsible for my technicians. Stuff gets broken and unless it was just plain abuse, I cover the costs of the repairs. If braking things is a common occurence it may be time to have a discussion with the technician about this or start looking for a new technician. As far as wrong diagnosis this is a little different story. I have taken parts off vehicles when they didn't fix the repair. I don't feel that its appropriate to charge a customer for parts that don't fix the problem. I had one this week that I ate about $100 in parts because they didn't fix the problem. This customer is one of my most loyal over the years so sometimes I feel its just a part of doing business.

Link to comment
Share on other sites

Even the best mechanics make mistakes from time to time. I have made my share of blunders too.

 

Unless we share in all the profits of the business with our techs, we need to realize that things will go wrong and chalk it up to another cost of doing business. If a tech has a comeback due to his or her mistake, that tech should re-do the job, if possible. Flat rate shops and hourly rate based shops will have different pay procedures to deal with this.

 

If a tech makes a mistake, find out why. Is it lack of training, lack of following company policies and procedure or is due to sloppiness. If there is a trend where the tech’s quality cannot be improved, you will need to let that tech go.

 

We track all comebacks, tech related or part related and we know what percentage of total sales are comeback related. We know that in any given year we will have 2 to 3% tech comebacks. We add this to our cost of doing business breakeven number and amortize this expense like any other budgeted expense. It hurts less when we know the numbers and have it budgeted. Because we track the number of each tech we can tell if a problem is developing and deal with it.

Link to comment
Share on other sites

Hey Joe,

 

Do you happen to know what some of the payment methods that hourly shops do in these types of situations? I understand in a flate rate shop that the mechanic is just given the job again and the shop may not give the mechanic hours for the come back but in an hourly shop, what do they do (clock the mechanic out so he does not receive hourly pay during the repair)?

Link to comment
Share on other sites

Hey Joe,

 

Do you happen to know what some of the payment methods that hourly shops do in these types of situations? I understand in a flate rate shop that the mechanic is just given the job again and the shop may not give the mechanic hours for the come back but in an hourly shop, what do they do (clock the mechanic out so he does not receive hourly pay during the repair)?

 

There are a few ways they handle it. Shops that use a clock will still clock the actual time, but charge back the tech at the end of the pay period. If at all possible, the tech that caused the error should get the job back to redo, if not the tech that does the comeback will get credit which goes against the other techs hours.

 

With shops that don’t track productivity hours and just pay an hourly wage or salary, it’s a little harder. Some shops, when the tech as very few comeback, will not even make an issue out of an occasional mistake and eat it as a cost of doing business. Remember, a chronic comeback problem cannot be tolerated and usually is an indication of a problem. If it’s not a part issue or training issue, then it’s a tech issue. If the tech cannot improve, you need to pull the trigger.

 

I don’t know of any shop owners that actually make the tech pay out of pocket, unless the action was deliberate, and in that case there’s a real problem at that shop.

Link to comment
Share on other sites

  • 3 weeks later...

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • Similar Topics

    • By Joe Marconi
      The Summer is in full swing, a time when many people take vacations and also spend time engaging in their favorite hobbies and activities. 
      How do you spend your free time?  
    • By Transmission Repair

      Premium Member Content 

      This content is hidden to guests, one of the benefits of a paid membership. Please login or register to view this content.

    • By Joe Marconi
      I will never forget the day when a customer, who didn't like the price, took cash out of his pocket, crumbled up the cash, and threw the money at me. 
      This customer clearly crossed the line, in my opinion. 
      Before I tell the rest of this "true" story, I would like to hear from you: How would you have handled this situation? 
       

    • By Joe Marconi
      I thought this article from Ratchet and Wrench was an interesting perspective. Let me know what you think?  Joe Marconi 
      Is It Time to Raise Your Labor Rates?
      May 27, 2022   Nolan O'Hara   No Comments With increasing costs and rising inflation, many shop owners realize it may be time to raise their labor rates. But it’s always a battle. 
      There are several factors to consider, including customer satisfaction. Every shop owner needs to keep their pulse on the industry and make sure they're running an effective business, but when do you know, and what steps should you take when you’re considering raising your labor rates? 
      The Backstory
      Andy Massoll, founder and CEO of The Detroit Garage, has been working in the auto industry for over 20 years. His father opened their first store, Curt’s Service Center, which Massoll still operates as part of The Detroit Garage auto family. 
      Massoll understands the battle shop owners go through when considering raising their labor rates. He also knows there’s a misconception in the industry that gets a lot of shop owners into trouble: the difference between a door rate and an effective labor rate. 
      The Problem
      It’s difficult to run a shop, and it’s certainly not easy to find and keep professional technicians. It’s vital to know your numbers. Massoll bases his labor rates on his effective labor rate, analyzing his wages and costs. 
      Massoll says understanding your effective labor rate is critical and provides a better insight into your true costs, including the costs of obtaining and keeping your skilled labor. 
      “If I can’t obtain or retain (professional) talent … that is when, clearly, I need to pay more,” Massoll says.
      Shops need to control rates to balance customer expectations and run the business.
      The Solution
      Massoll keeps a close eye on his shops’ productivity. That means understanding how many billable hours your shop is producing and comparing the number of hours worked. 
      Understanding where your productivity is at is crucial in determining raising your labor rates. 
      “You can’t begin to make an educated guess on what (the) labor rate you should charge is until you truly know your labor costs,” Massoll says. “And it’s hard to know your labor costs if you don’t understand and know your labor proficiency or productivity.” 
      Close supervision is key, but you don’t need to write it all out on a whiteboard. Massoll uses a software program to make sure he has a keen understanding of his shops’ productivity. Their goal at The Detroit Garage is to always be at 100 percent productivity overall. That helps Massoll understand when it’s the right time to raise his rates. 
      Additionally, Massoll is on top of his numbers. He spends time in the weeds, analyzing his total number of labor hours and the labor dollars they sell per store over a month, comparing that to his employees’ wages, and understanding the true costs of his business.
      Massoll knows when it’s the right time to raise those rates because he’s spent the time analyzing his numbers, working to keep on top of a gross profit goal of 70 percent to 72 percent on labor. 
      The Aftermath
      Eventually, there comes a time when it’s necessary to increase those rates, and Massoll has done so fairly recently. 
      Economic factors are also important to consider—factors like rising parts costs and inflation. As inflation soared to around 7 percent in 2021, Massoll gave all his employees a 7 percent pay rate increase to counter that economic influence. Because of that, he increased his labor rates.
      The Takeaway
      With prices going up everywhere, Massoll’s biggest piece of advice for other shop owners is to charge appropriately for your work. 
      He says too many shop owners think of the decision emotionally, wanting to help their customers. Massoll acknowledges it needs to be a factual and calculated decision. 
      Massoll notes that he once had a long-term customer come in, who, when he paid for his bill, asked, “That’s it? That seems too cheap.” 
      Massoll explained to him that he was a good customer, and Massoll wanted to take care of him. The customer told him, “If you don’t charge me appropriately and be profitable in your business, and you go out of business, how does that help me the next time I need your service?”
      That’s a lesson that’s stuck with Massoll through the years. 
      “This industry is full of very good people; our business is in helping people. People have car problems, and we help them,” Massoll says. “But we do that for a monetary exchange. And too many business owners run their business with their heart, and when it comes to business, you have to be profitable.” 
       
       
       
    • Heavy Duty Parts Fleetcross
    • By carmcapriotto
      Daniel Griffith, Wally's Precision Auto Care, Las Vegas, NV
      Key Talking Points
      Finding, identifying, and connecting with the ideal customer and naming them (Jennifer and Clara)- what books are they reading? Who are they following on social media? What are their expectations?  Build out each phase of the customer experience process, and look at the highs and lows What parts of the process are easy and what parts are hard? Simplify that down as much as possible If something's not working, change it. It's that simple Hiring new employees- asked his current employees what they like about their job, then used their words on the job descriptions “Culture eats strategies for breakfast.” The average tenure of his current team is over 12 years  
      Connect with the Podcast:
      Aftermarket Radio Network
       
      Subscribe on YouTube
      Visit us on the Web
      Follow on Facebook
      Become an Insider
      Buy me a coffee
      Important Books
      Check out today's partners:
             
      Set your sights on Las Vegas in 2022. Mark your calendar now … November 1-3, 2022, AAPEX - Now more than ever. And don’t miss the next free AAPEX webinar. Register now at AAPEXSHOW.COM/WEBINAR.

      More Time. More Profit. Transform your shop at getshopware.com/carm


      Click to go to the Podcast on Remarkable Results Radio


  • Our Sponsors










×
×
  • Create New...