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Not every shop pays flat rate; for many reasons. So, many techs are on hourly pay. There is nothing wrong with hourly pay, as long as you have an incentive program in place that promotes high production levels to avoid complacency. For hourly paid employees I strongly urge you to have a pay plan that rewards production levels on a sliding scale. As a business coach, I have seen too many times shops with low production levels and high tech payroll due to overtime pay. Overtime pay must not be used to get the jobs done with no regard to labor production. Limit overtime and create a strategy that increases production and rewards techs with production bonuses. By the way, there are many ways to incentivize techs, it's not all about money. Overtime without high levels of production will eat into profits and if not controlled, with kill your business. If your shop is an hourly paid shop, what incentives do you have in place to maintain production levels?
CLICK HERE TO JOIN THE SUCCESSFUL SHOP OWNERS FACEBOOK GROUP [transcription] Could Auto Repair Flat Rate Be Dead? TECHNICIAN shortage today is real. Last study that I saw said, for every eight shops that’s looking for a technician, there’s only one tech available so I know many of you watching this are experiencing that same thing. And I’ll also say one thing that I found: most technicians, when I mention flat rate, their cheeks kind of pucker up. They hate it. Why? There’s risk. They’ve been burned before. So often in the technicians starved market, what’s a shop owner left to do but put technicians on hourly or even maybe salary? And what that leads to is, really what I’m going to call an “uninspired performance.” Why? They get comfortable, they’re able to pay their bills without exerting a ton of effort. So what’s a shop owner to do? The answer I’ve uncovered recently in my shop is to have a Win Number. For every single employee. See one of the truths I discovered in my 30 plus years of being a shop owner is that often we don’t get the most out of our employees because we never really sat down and told them what we expect. I know that’s been one of my mistakes. So one of the things that I’ve done recently is I’ve given each employee a weekly Win Number, and that’s why it’s so important. For example, I recently sat down with each of my technicians and shared with them their Win Number. What do I mean by win number? What I expect out of them in parts and labor production for each employee. The numbers are based on my desired technician cost as a percentage of sales. It’s worked so well with my technicians that I now sent it out and established that win number with both my CSR and my service advisor. I’ve got to tell you the results have been incredible. Not only are my sales and profits up through the roof lately, it’s led to believe it or not, happier employees. Why? They drive home at the end of the day or at the end of the week knowing that they hit their goals. Knowing that they’ve contributed to a successful week for the shop and that certainly led to a happier shop owner! So, let me leave you with a question. Does each and every one of your employees on your team clearly know what you expect of them? If your answer is not a resounding YES, it’s time to put a pencil to paper and figure out each team employee or each team members weekly and daily Win.