Employee Compensation Pays
After years of working in the auto repair business, I have noticed that when it comes to employee compensation, the only thing you can count on is the inconsistency from shop to shop. Years ago, you could count on 50 percent of the labor rate being the standard of the industry. Today, things are different.
The rising costs of living and insurance and increased customer service requirements have changed the auto service business.
Employees now look to the employer for health care, vacation, holiday pay and a stable income, as well as a safe and comfortable workplace. Today, compensation means a lot more than just "flat-rate." Compensation must be stable and reflect the quality of employee that the shop wants representing them in the community.
A happy, less-stressed employee is much more productive, allowing you to make more money. And that is the name of the game.Like it or not, our employees have as much presence in our neighborhood as the shop owners and managers. We need them to reflect a mission of high-quality service, and we don't need them undercutting our labor rate by working on cars in their driveways. In today's market of high demand for high-tech mechanics, if you don't take care of your employees, someone else will.
So this is where it gets hard. The shop owner wants a full day's work for a full day's pay. Sometimes that is just not going to happen. You are going to have down or dead days, and you are going to have great days. It is up to us -- the shop owners -- to level out the good and the bad (Management 101) and to provide a stable and comfortable environment for our employees. A happy, less-stressed employee is much more productive, allowing you to make more money. And that is the name of the game.
So you are asking, "what is the point?" The point is, take care of your employees' needs, and it will cost you a lot less money. Here are a few pointers:
1. It is cheaper for the shop to provide health insurance -- even if it is just major medical -- than it is for the employee to provide his own, and it is much cheaper than finding another good mechanic.
2. Always value an employee's ideas. Remember, you hired them, and that says a world about you. If you treat them like part of the team, they will act like part of the team.
3. When it comes to vacation time, remember that a burned-out mechanic can't make you any money.
4. If you are paying flat-rate or any other form of owner's "safety net" pay system, with no security for the mechanics, they will always be looking for another job. It is much more effective to pay a salary with bonuses or commissions, and remember benefits are cheaper than wages.
5. A-level mechanics are highly skilled individuals and are much more productive at fixing cars than in performing menial tasks. Hire a helper; production will go up, and costs will go down.
6. Keep track of productivity by tech, and fire unproductive employees. Some of us have been using flat-rate as a way to force employees to quit. If you track productivity by tech and document it correctly, you should have no fear in firing an unproductive employee.
7. Remember you are a team, every day is game day, and the name of the game is to make money.
