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what is a realistic number of labor hours charged for a 40 hr per week tech

Bob K
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Bob K Enthusiast

Bob K

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I have 2 great,hard working techs. Our car count is fairly consistent at about 45 cars per week. We use a worksheet to check out every vehicle that comes in and we sell a lot of recommended work from those inspections. We consistantly produce about 55 hours total per week. Is it really realistic to achieve 80 hours for these two techs?

flacvabeach Community Regular

flacvabeach

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You didn't say what level techs these are. I have two A techs who consistently pull 45-55 hours per week each, but if the second tech is a general service guy doing oil changes and other loss-leader work, it will be difficult for him/her to earn the hours.

Bob K Enthusiast

Bob K

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One tech is a veteran tech with about 30th years experience. While not a strong diagnostician, he has years of experience and does excellent with mechanical work like brakes, chassis, engine, transmission work. Our second tech has just graduated from Alfred tech, a great auto tech college. He's very intelligent but only has about 1 year work experience. Both techs have a great work ethic and really hustle every day. They are both paid hourly.

Bob K Enthusiast

Bob K

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Thanks for the clarification of tech levels. With that i would classify them as B and C techs. I have no doubt that our C tech will eventually be an A tech. Our B tech will likely always stay a B. Would you recommend hiring a C tech to do the oil changes and tires and keep the current techs doing repairs ?

flacvabeach Community Regular

flacvabeach

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Now you have touched on the mystery of shop management. Having the right labor mix for the work you can reasonably expect to bring in is probably the biggest challenge we all face. Assuming you are paying your techs on some kind of incentive plan based on hours earned, you probably feel pressure to feed them as many hours as possible, so you hesitate to bring in additional techs and water down the available hours. If you are short on labor, overtime can destroy your labor margins if not carefully managed. Let's say your successful in increasing car count and your SWs are selling work, when is the right time to bring in another tech? And will you be able to find a great tech? Techs leave, and the ones you hire after great deliberation turn our to be, well, not great. You don't ever solve this one - you attempt to manage it on a continuing basis.

Bob K Enthusiast

Bob K

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There is always a mix of work to be done on every vehicle that comes in the shop. Since we only have these two great techs, who are happy to do the mix, perhaps it might be best to not complicate our processes by changing things up right now. I have been considering an incentive for improving billed hours. Any advice on incentives would be greatly appreciated.

mspecperformance Mentor

mspecperformance

Posted
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If your technicians are as good as you say they are and also you are selling a lot of work maybe the problem is you are not selling the work at its full value. You could easily bump your numbers up by selling the proper time on each job and also selling your diagnostic time for proper value. Something I learned recently that I am still working on.

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flacvabeach Community Regular

flacvabeach

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We believe that ALL employees should end up on a pay plan that rewards them for meeting and exceeding performance goals, whatever those goals may be. We spent months with our ATI coach working on technician pay matrices that

 

1. increase pay scale for obtaining additional professional certifications

2. Reward production (hourly pay for the week increases as they achieve production thresholds)

3. Insure that we are paying time and a half for overtime

4. Tell us when we can let a tech work OT and preserve our labor margins

 

If you have a tech who has turned 20 labor hours by Friday and he ends up working 45 hours, your labor margins are probably taking a beating. If your techs are not on an incentive plan, what motivates them to pull that last car in at 4:30 in the afternoon and do a through courtesy check on it? Because they're nice guys? Because they really like you? I want them to do it because we ALL materially benefit from it.

 

Why did it take us so long? First, it's a difficult concept to absorb, it takes a while to actually develop the individual pay matrices, we're not "strongarm" managers (we're wimps), and we were taking people off of pay plans they were comfortable with and moving them to a challenging new pay plan that rewards them for performance.

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ATSAutomotive Collaborator

ATSAutomotive

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You have an average hours per ticket of 0.81 hrs per car, that is low. You should be up around 1.5 hrs per car where you would be looking at 67.5 hrs. Which would be 84-85% efficiency. You have a good car count coming through your shop but you aren't selling enough hours per ticket.

  • 3 weeks later...
Shopcat Community Regular

Shopcat

Posted
Posted (edited)

Your per vehicle average is low. I suggest you should be averaging about 2.0 hours per vehicle as an initial goal. Along with that, an equivilent amount of parts. The actual ratio is .80 parts to 1.00 labor. For your shop, 45 cars with an average of 2.0hrs per r.o., you will have 90 hours of production for those two technicians. That would be about 110% productive. This is a realistic goal, and can be achieved with some good processes in place. There needs to be a graduated pay scale to create incentive to find and do the work, I know with the numbers you mention, you are leaving work on the table. This is a particular concern because your customers count on you to let them know what is going on with their car. If you miss something during their last visit, they may wind up at another shop that will show them everything that is wrong with their car. However if you document and prioritize all the concerns, you will develop loyalty with your clients. I call it "we report, you decide". Give them what needs repaired first, then things in the near future, then recommended services, etc. They will be happy, you will also make more money, which means a brighter future, all because you are doing it right. I love this part of the business. You have good car count....now you need to make the cars count.

Edited by Shopcat
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  • Have you checked out Joe's Latest Blog?

    • Joe Marconi
      The Technician Shortage Is Our Fault, And It's Time We Own It
      By Joe Marconi in Joe's 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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