The average independent aftermarket shop has not embraced the mathematics of their business. This lack of focus means many shop owners do not understand today’s business realities. Let’s look at one reality as to what you are really paying a technician. I believe you are, on average, paying substantially more per hour than you think. Go through this exercise in your own operation.
1. Take the technician’s basic hourly wage you are paying him or her and multiply it by the number of hours per week that he/she works. This will equal their total gross wages for the week
2. Now take the average number of labor hours per day that the technician is actually billed out that week and multiply that by the number of days he/she worked that week. This gives you the total billed hours the technician was actually billed out.
3. Take answer in #1 and divide it by the answer in #2. This will tell you what you actually paid the technician per hour that week.
4. Take the answer in #3 and subtract the basic hourly wage you paid the technician and that will tell you the difference in hourly pay you actually paid.
Here is an example:
$25 technician hourly pay times 40 hours worked per week = $1,000 in gross wages for the week that was paid.
5.39 hours per day the technician is on average actually billed out times 5 days per week he/she worked = 26.95 the total billed hours for the week the technician was actually billed out.
$1000 divided by 26.95 = $37.11 as actual wages paid per hour for that week
$37.11 minus $25.00 = $12.11 difference in actual wages paid per hour compared to the perception as to what the technician was actually paid.
The other point to remember is that the actual wage paid in my example ($37.11) is also before any benefits you provide to the technician, so add that hourly number to the real number you just discovered.
Don’t fall into the trap that you cannot afford a competent technician. It is not about the hourly pay, it is about the total weekly hours actually billed without comebacks.
It is time for all shop owners to realize that competent licensed technicians who bill out a minimum of 8 to 12 hours a day consistently are worth substantially more than a technician who gets 4 to 6 hours billed out on average per day. The 4 to 6 billed hour number would be the minimum of what an apprentice technician is expected to do.
Competent people make a company money!
I would encourage you to do this exercise each and every week on each technician so that management can now start to build a file in order to address what is the real issue if a technician cannot bill out the total hours they were working in the shop each day. The daily conversation with each technician must take place and it must be documented. Find out the facts. “Why did we not achieve a minimum of 8 billed hours today?” Is further training required for that individual on the work that they are asked to do? Do they have the right tools, software and equipment to do the job efficiently and right the first time? Are they constantly waiting for parts to arrive? Is the daily flat-line number being met each day, meaning is the right number of vehicles being booked in each day by the Service Advisor to ensure the technician has a full and productive day? Is the shop layout conducive to providing a productive shop?
I have seen shop owners turn away very competent technicians because that tech was perceived as asking too much per hour. It’s time to ask the technician the right question: “On an average day, how many hours are you billed out?” When the answer is above eight, (which can be monitored from day one) what is your hesitation? Your door rate reflects your shop competency, does it not?
Remember we are now a knowledge-based industry, as the trade days are over. We are truly a highly skilled profession today and management must understand the new reality.
