Jump to content

tracking shop hours billed vs hours worked.

Recommended Posts

I will be starting to track our shops hours billed versus hours worked this week. What i really need to know from those of you who have been doing this is what is a realistic number of hours per tech per week. Thank you in advance. Bob Keene.

Link to comment
Share on other sites

This is currently being discussed in this thread: http://www.autoshopowner.com/topic/9540-effective-labor-rate/

since the formula you are going to track is actually technician productivity.

Tech productivity = Hours billed / Hours available


Industry standard for productivity nowadays is 110% or more (bill about 9 hours in an 8 hour day), however most independent shops across North America are hovering below 70%, and many are actually around 55%, or half of what you need to be a profitable shop!

Productivity, more then any other key performance indicator (KPI), DIRECTLY translates into profit! High productivity = high profits, low productivity = low profits!


You should also consider tracking tech efficiency:

Tech efficiency = Hours billed / Actual hours it took to complete the jobs

Efficiency is a better measure of how good your techs are (tech skill and motivation), while productivity also factors in many other things, like shop layout, front counter processes, tooling etc.


To track efficiency you also need to track lost time (all the hours your techs spend doing non-revenue generating tasks, such as sweeping, cleaning, tool repair, shuttling customers, picking up parts, waiting for the next job etc) because:

Actual hours = Available hours - lost time hours

Ideally, lost time hours would be 0, but this is unrealistic. It needs to be tracked so you can minimize it each week, and it helps you find and fix problems in your work flow processes.


You can have high tech efficiency (great techs), but have low productivity, which will still translate to low profits, if your techs just don't have enough work to do, or you don't have a service adviser, or your front counter processes are lacking.

On the other hand, if you have low efficiency (weak techs), I'd be surprised if you could attain a truly high productivity.

If you're looking to pay bonuses, try to look at efficiency for your tech's bonuses, and productivity + profit margins + gross sales for your service adviser and shop foremen/managers.

  • Like 1
Link to comment
Share on other sites

Thanks for your help. I'll will post our results after a week to give a snapshot of our shop numbers. Also on a personal note I have an uncle in your city. James Keene former concert master of the Edmonton Alberta Symphony Orchestra. Small world.

Link to comment
Share on other sites

Right on, it's always good to see real world numbers, and be able to compare apples to apples, something most people don't do.


As for the Edmonton Symphony Orchestra, it's not my style of music so I've never seen them, but I hear that it's world renowned, so that's quite impressive. Small world indeed.

Link to comment
Share on other sites

It costs about $80/month. To exploit it fully, you need to have all of your techs punching in and out of the jobs they are doing and every time they go to lunch or take a smoke break. If you enforce that, you, your techs and your SAs will be able to see where tech time is going. It color codes productivity on individual jobs so if a tech is taking 4 hours to do three hour jobs, you know you need to look at his performance or your estimating. An added benefit is that it gives you an automated timeclock for wage/hour purposes. If you are not going to make your techs punch work and breaks in and out it probably is a waste of money. For any fans of Vin Waterhouse, a tool like this will help you fine tune your factory. Takes discipline.

  • Like 1
Link to comment
Share on other sites

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
  • Have you checked out Joe's Latest Blog?

      Most shop owners would agree that the independent auto repair industry has been too cheap for too long regarding its pricing and labor rates. However, can we keep raising our labor rates and prices until we achieve the profit we desire and need? Is it that simple?
      The first step in achieving your required gross and net profit is understanding your numbers and establishing the correct labor and part margins. The next step is to find your business's inefficiencies that impact high production levels.
      Here are a few things to consider. First, do you have the workflow processes in place that is conducive to high production? What about your shop layout? Do you have all the right tools and equipment? Do you have a continuous training program in place? Are technicians waiting to use a particular scanner or waiting to access information from the shop's workstation computer?
      And lastly, are all the estimates written correctly? Is the labor correct for each job? Are you allowing extra time for rust, older vehicles, labor jobs with no parts included, and the fact that many published labor times are wrong? Let's not forget that perhaps the most significant labor loss is not charging enough labor time for testing, electrical work, and other complicated repairs.  
      Once you have determined the correct labor rate and pricing, review your entire operation. Then, tighten up on all those labor leaks and inefficiencies. Improving production and paying close attention to the labor on each job will add much-needed dollars to your bottom line.
  • Similar Topics

    • 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 ASOG Podcast
      The Biggest Mistake New Shops Make
    • By carmcapriotto
      During Today's episode #105 Brent and I Talk About:
      Brent’s Favorite Super Hero Brent’s Shop Brent’s Coaching Style Brent’s Ideal Client  
      This episode is sponsored by AutoLeap. AutoLeap is a cloud-based all-in-one automotive invoice software that helps you supercharge your mechanic shop. Their customers have experienced:
      30% increase in revenue by improving transparency and trust 50% reduction in time spent researching and ordering parts 10% increase in profit margins through robust reporting  
      Click here to learn more about AutoLeap and schedule a demo: http://bit.ly/3GRgO88
      Don't forget to rate and review us!
      Connect with Chris:
      [email protected]
      Facebook: https://www.facebook.com/AutoFixAutoShopCoaching
      Youtube: https://bit.ly/3ClX0ae
      Click to go to the Podcast on Remarkable Results Radio
    • By ASOG Podcast
      Free Diagnostic Time: Is It Worth It for Auto Repair Shops?
    • By Ruben Van Zenden
      Today, we simply cannot ignore social media, everyone is using it whether you are a fan or not. Personally, I think it has its negative and positive sides. 
      I have been looking at 100+ car repair shops and noticed that only a hand full are using social media marketing, for example, Facebook advertising. 
      Why are so few car repair shops making use of this, in my opinion, great opportunity to increase car count? 

  • Our Sponsors

  • Create New...