Truett

5 hours ago, mmotley said:

Truett, how's the new pay plan working out for you so far? You should have about 3 weeks worth of data. Any improvement?

Well.....My low end techs (oil changers and tire people) have come up to 55% from about 40%. My "B" techs are now doing around 60% and my lead techs that were below 50% are now running 62-65%. Amazing how that works isn't it.... They are trying really hard to get that $100 bonus for over 60% for the month. Hope this keeps up. Will let you know.

Richard

7 hours ago, dstremski said:

Interesting to hear other shops compensation plans. ( Always a head scratcher ) I do agree there's a time to re-evaluate and find a balanced that rewards techs and maintains shop margins. That said, Our compensation plan we pay an hourly rate plus book hour (Mitchell).  Most jobs are plus .5 - 1 book hour over mitchell to account for older cars and we work largely with computer / electrical issues,  Cleaning up the attempted repair damage from other shops/customers many times. 

As I understand it: Being independant and not entitled to dealership rules, over 40 hours is 1.5 x hourly rate. This seems to work well in shop my two lead techs are solid with many years onboard . Techs 3-4 are not as consistent and becoming harder to find. What experiences do others have with this compensation approach? What compensation approach do you find works better with a younger generation?  I welcome insights, Thanks   

I do not know about the labor rules in your state, but in Illinois we also have to pay overtime (1.5 x bonus hourly rate) on the bonus. Don’t forget about it as it can become costly if you get audited. I was audited last year and thank goodness i had done it correctly.

I feel this, done that been there.

Well i guess I will find out how it works. I implemented it starting Oct 1....so we will see

1 hour ago, Stevens Automotive Service said:

This is a very true statement.

 

 Make it a win win for everyone. If you stay the way you are now I am sure you know where you will end up!  

We have tried to show them what their numbers were and what their production is, but if it does not affect them directly they don't want to "Change the status quo ". I feel I have to shake thing up. Want I wanted to know is how this new plan compares to other shops. I have only worked in this system or a full flat rate system. I was very productive in both but always have been self motivated.

As for a Win, If they just reach a 60% level they can be close to their old numbers and if they reach 75% they can make more (and so can I). I am going to approach it in that manor.

Richard

3 hours ago, mspecperformance said:

Richard,

 

Depending on how much your techs make now (actual dollars) you may have a really hard time implementing a new pay plan and getting them to buy in. I am assuming they are coasting by making really good money at 7% a ticket (if its 7% of gross sale). Even at 7% of gross profit they still might doing pretty damn good. I have heard of these pay plans mainly from tire dealers and franchise stores like STS. With margins getting squeezed everyday its going to be hard to keep up with those pay plans. From my experience when you take away something from an employee and they will definitely feel that you are you'll have a really big break in morale. Plan B is to start recruiting.

Yes I think I will have to start Recruiting. I know it is an Uphill battle to get the moral back but if they want a job it may have to be this way or will not be in business for much longer.

2 hours ago, Wheelingauto said:

I have a lot of questions about your operation and before I can render an opinion on the pay plan I would need some answers.

More importantly, your definition of efficiency is different to how I've been taught. I always believed efficiency is time allotted to actual time doing the work. So, if I am given 2 hours to complete a task and it takes me 2 hours I am 100% efficient. If I take a crap for 30 minutes it is not part of the equation. Other measurements must be take to determine the cause of inefficiency.

Productivity is the difference of clock hours vs hours working on cars (accounts for above mentioned potty break). So if you guys are slow and there are not enough cars the tech does not get a bad rep for being inefficient.

To better explain, 3 times are needed to be measured and calculated. Time on the clock (40 hours, available) time working on cars (actual) and time given per task (billed, booked, flat rate time).

Efficiency is billed divided by actual. A journeyman tech should aim for 135%

Productivity is actual divided by available, aim should be for 90%

If you find your guys are not efficient you need to determine if they are lazy, ill equipped, untrained or unmotivated. Increasing efficiency via pay can only change unmotivated. If you find your guys are unproductive you need to figure out if there are not enough cars, not enough staff or scheduling needs to be looked at. Again, unmotivated is the only factor that might be modified by pay. If your techs need to unload a truck full of tires they cant be working on cars and thats a factor.

How you currently measure does not give me enough data to give an opinion on pay.

You are correct, I meant to say production not efficiency.. My problem stems from an old pay system left over from the former owner that was a Goodyear plan used at company stores.

We pay x dollars per hour and 7% commission on total ticket. Exception is tires. No commission for techs on tires. 

The techs are making enough that they do not feel any urgency to get work done in a timely manor. I pay them, most times, more they the make the shop. Mostly they do two clock hours or more for each flag hour they turn. 

So unmotivated is what I feel they are. Hoping this will kick start more production. There efficiency is poor also. I was a line tech in my past life and I did turn the 135% week in and week out on full flat rate. Mostly they turn less then 20 hours in a 40 hour week.

There are 3 techs in each one of my stores. A lead "A" tech, a "B" tech and and oil changer / tire guy. I pay them different hourly wages according to their ability. All of them do less then 50% productivity.

Richard

I need to change my pay plan for my Technicians from a hourly wage plus a commission on total ticket. This is what I am thinking about. Anyone have any comments?

Richard Rollins

Forgot to mention we currently are at about 35 to 40 % efficiency. 

Sorry so large but it was copy and paste.....

New Pay Plan

The new pay plan will be based on Technicians efficiency. The Technicians will no longer be getting a commission on sales but rather a Bonus based on the ability of the Technician to complete the job in the allotted times.

1.  Less then 50 %                      0 % Bonus

2.  50 % to 54.99 %                  10 % Bonus

3.  55 % to 59.99 %                  20 % Bonus

4.  60 % to 64.99 %                  30 % Bonus

5.  65 % to 74.99 %                  40 % Bonus

6. 75 % or greater                      50 % Bonus

    

   Also there is going to be a $100.00 Monthly Bonus for anyone staying above the 60% level for the entire month.

    

   Percentage amount is based on Hourly Wage.

   Percentage is figured on Flagged hours divided by Clock hours.

    

   Example:

    

   25 Flagged hours divided by 30 Clock hours would be a 83% Efficiency rate. This would be a 50% bonus.

    

   20 Flagged hours divided by 35 Clock hours would be a 57% Efficiency rate. This would be a 20% bonus.

    

   19 Flagged hours divided by 40 Clock hours would be a 48% Efficiency rate. This would not result in a bonus.

    

   Overtime would be figured as:

   ((Hourly Wage + bonus X 40) +

    ((1.5 X Hourly wage + bonus) X (hours over 40))).

3 hours ago, Ulfar said:

Long time lurker with a question. For those who pay under .5hr do you give additional time under another labor op for giving the vehicle a once over? 15-18 min in my opinion isn't enough unless you've got lot guys/helpers that are bringing the vehicle in and setting it up for the tech or you've got lube pits and even then you're probably losing out on potential sales.


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We also pay a commission on total ticket so it is really closer to .5 on a LOF plus commission on what they find if they replace it. A finders fee if it goes to a tech.

We pay .3 for an oil change

🎂

Cake, cake is always good way to celebrate !!!!!

No really thanks for all the responses and great posts.

Richard

I'm in Illinois, other side of xrac, and we are down 15-20% first 3 months of the year. Route sales guys say it's the same every where they go.

Richard

Has anyone tried RepairPal? What were your experiences? Cost? Did it work? I am thinking abut tiring it for my locations. Just need a little information to base a decision on.

Thanks,

Richard Rollilns

Everyone pays the same bank processing fees . What you pay above that is the secret. After two weeks researching We choose Dharma merchant services . Saved us $200 the first month we changed over merchant service. No contract check out there website

True. We use WorldPay (First Mile). We pay a flat Fee per month ($200) no matter how many we process, then the bank fees. Have saved as much as $500 in both stores from old system (EPX)

We switched to Vonage about a year ago. I have two lines, Internet fax service(love this) and call waiting and voice mail all for only $79.33 pre store per month. I have had Vontage at home for over 5 years and pay $9.95 per month for it. The only time it goes down is when we loose internet or like said before when the dos atack happened. If we have poor connections or any other problems they are there (real People) and they solve the trouble right then. I have fiber in one store and high speed cable ($59.95 per month each store) in the other so do not know how well it works on a slow connection.

Jeff,

Let us know what you did and how you are doing. Good Luck

Richard

I am also going to have to write a handbook this year. Any and all samples of what you have would be great as a primer.

Thanks,

Richard

[email protected]

We give $500 to managers, $250 to lead techs, $100 to "B" techs, tire and oil changers. Don't forget taxes.

Richard

Glad your here. Not real close but same state. We are in Champaign-Urbana. Your up by Dupage College if I remember correctly.

I have thought abut this also. In the major city's I can see this but in the rural community's there is no way. Can you see sending a car 10 miles out into the country to get a farmer then going back. Remember they, milinums want it now not in half and hour.

Just my thought.

 

That was my first thought when I started considering what self driving cars mean for our industry. I think about this subject quite often as I have a young son that is really interested in our industry.

 

I agree there will be parts to replace and repair, but it could be a very different market. Look at all of the changes to our industry over the last 2 or 3 decades and you see that some adapt and others go away. This particular issue may be a little different than what we have seen in the past though. Google and Apple are both interested in the self driving car market. If we have learned anything from watching them change the world, we have learned that they will do it in a way no one else has. I do not feel that self driving or electric cars will ruin our industry, but it could be a very different place. Here is my concern: If the cars can completely drive themselves, then I am willing to bet there are very little reasons to own a car if you live anywhere near a metropolitan area. Why have a payment and one sitting in the driveway when you can use an app on your phone and a car will come pick you up whenever you need it? You will pay for what you use and all of the other hassles of car ownership are no longer a burden to you. The companies doing this (think Apple and Google) will most likely have their own facilities and probably will not need the independent repair facility at all. These cars may not go to the dealer, but they won't come to you either.

 

There will always be those of us who love to drive and own our own vehicles, but the more customers that I run into that have no idea of what year/make/model of the car that THEY PURCHASED, makes me wonder how many people really care to own one.... I'm willing to be that the majority of people only own vehicles 100% out of necessity. That necessity may be a little less necessary in the future.

 

(disclaimer: these are just my thoughts with no real data to back it up!)

And yet the current administration says this.....

http://www.theblaze.com/news/2016/12/06/wh-press-secretary-says-wwii-veterans-should-get-over-their-bitterness-about-pearl-harbor-attack/

To all World War Two Vets (my dad included) THANK YOU.....

Richard E Rollins

Let's throw this out for discussion. I own two Goodyear tire stores. For the last 15 years we have been open on Saturday from 8 till noon. We are closed on Sunday. We have a manager/service writer and a "B" level oil changer and tire tech. Most Saturdays we do 2 oil changes, a few tire repairs, maybe a tire or two. About once a month a set of tires. One or two people who only come in on Saturday but could come in during the week. Almost never make payroll let alone expenses. Looking into closing on Saturday, at least for the winter months. We are located in a downtown location and don't see much traffic on the weekends.

What do you do and what do you think about my situation?

Richard

I feel your pain. I am 61 and have been in the business for 45 years also. Has happened a few times to me. Only thought I have when it happens is what comes around goes around and that persons karma will show some time in their life. Get pissed and move on. At least now a days we have a place to vent.

On another note, have you gotten into texting yet? I find I have a 90% answer rate with texting and only about a 50/50 chance with the phone any more. We ask every customer at write up if we can text them. Phone return calls with voice mail average about 2-3 hours, texting about 7 minutes. Set up a texting system for our shops for about $13 a month and can be used on any computer in the shop.

Richard

How about this, next time you offer a free alignment check get the authorization for the alignment if it is out. This way your not out and the customer is not surprised.

Richard