Talk to shop owners who have shifted their business away from a flat-rate pay plan, and they likely will have one thing in common: They all probably experienced significant turn-over during the transition. Many see that as inevitable. But let me assure you it doesn’t have to be. I know, because our business did it without losing a single technician.
Before I explain how we did that, let me introduce myself as one of ABRN’s new shop-owner columnists. In 2002, after just four years working as a technician, I purchased an established business, Able Body Shop, in Anchorage, Alaska. We now have two locations with about 40 employees and annual sales of about $6 million as well as a truck accessories shop.
I can’t say I’ve done everything right nor that we are necessarily among the most successful businesses in the industry by every measure. But I can (like you, I presume) point to some things that we’ve done very well, and that’s what I hope to focus on in these columns.
So how did I switch from a well-entrenched flat-rate pay plan to a team payment plan that still promotes technicians to excel without losing an employee? The key was employee buy-in — letting them see how it would benefit them and giving them a voice in the change.
First, they trusted that I wasn’t out just to cut my costs. My intention was only to create a better environment that allowed us to fix cars faster and more efficiently; I knew that would improve things for all of us.
Second, I let them take a look at what the change could look like. On two separate occasions, I took four employees down to Arizona to visit a shop owned by a friend who had switched to the type of pay plan I was considering. My employees had some say in deciding who would go on these trips. I told them that what they would see might not be exactly what we implemented here, but that I wanted them to see what a change might look like.
On each trip, we spent a day at the shop with no formal presentations — just my techs talking with the techs and the owner at that shop, seeing how things worked there. Both times on the flight home I heard the same thing from my employees: We’ve got to do this, and we’ve got to it now. They were amazed at how much work flowed through the shop without the chaos that the one-man-one-car flat-rate system often creates.
After those trips, we ran the numbers side-by-side for employees for a few months, so they could see what it might look like for them. Then we did a trial with a group of the employees who volunteered to try it.
Getting their input and buy-in kept us from losing a single technician. As a matter of fact, now a few years later, if I were to tell them we were switching back, that actually might make some employees quit.
I’ll explain more about the details of the pay plan in a future column, but here’s why it can work for both your employees and for your business. Before the switch, we averaged about 1,000 or 1,100 production hours every two weeks at our main shop. Now, with the same number of employees, we average 1,500 or 1,600 hours and sometimes hit 1,700. We’ve boosted production and improved cycle time, and everyone makes more money.
Is it the right pay plan for your shop? Only you and your team can decide that. We’ve had some people come on board after we made the switch who decided it wasn't for them and who found a flat-rate job elsewhere. But if someone tells you it’s not possible to change pay plans without losing people, tell them you know a collision repair business that has done it.
