As you know, we have been talking about marketing and bringing more people to your shop for quite some time, after all, we know that the first thing that you have to do in order to make money is bring in clientele so you can start making money so your business can grow. However, today, we decided to change it around a bit. We want to talk about another important factor in every repair shop. Motivating employees so they can produce more. That is why we decided to bring in automotive industry expert Bob Cooper. He is not only one of the best automotive industry experts out there but he is also one of the nation's leading authorities on both personal and career success. So who better to talk about motivating employees and keeping them happy than the man himself. So without further ado, here is Bob Cooper's "8 Pay Program Tips That Generate Happy Technicians"
In the coming years, no component of your shop will be more critical to your success than the caliber of the people that work with you. If you want to hire and keep superstar employees at your auto repair business, you need to have pay programs in place that ensure they stay motivated, and happy to call themselves a part of your team. Here are 8 pay program tips that will help you employ superstar technicians that will contribute to your shop’s success for years to come.
1. Without question, the best pay programs for techs are based on billable hours. If you pay your techs a salary or an hourly rate, you’re rewarding them for showing up; not for producing. The good technicians love to produce, and should be rewarded for doing so. Some shop owners argue that the problem with flagged-hour programs is that they encourage techs to recommend services that don't need to be sold, or lead to poor quality work if they cause your techs to rush through each job. The truth is that in both cases the problem is either that the shop owner has employed the wrong technicians, or has not provided proper training - neither problem should be attributed to a flagged-hour pay program. There’s nothing wrong with paying people based on their productivity, because we should all be rewarded for our contributions.
2. Techs should be paid a predetermined hourly rate for each billed hour rather than a commission based on sales. If you pay your techs a commission on labor sales, then when you have to raise your labor rate to accommodate for any increase in your operating expenses, your techs will automatically receive a raise, and you’ll have to raise your labor rate even higher to compensate.
3. Ensure you have a tiered compensation program in place. For example, if your techs flag up to 40 hours in a 40-hour week, they will earn $22.00 per hour. If they flag over 45 hours in a 40-hour week, they will earn $24.00 for each of the 45 hours. You should consider the possibility that if it’s the end of the week and the tech knows he’s not going to flag 45 hours, he may decide to sand-bag by carrying the almost completed job over to Monday, rather than finishing up the job on Friday. You can avoid this temptation by implementing a policy which states that in order for your techs to be eligible for the performance incentive, and earn the higher hourly rate, they need to have flagged at least XX hours in the previous week. Your techs should also know that to be eligible for the performance incentive, they need to meet with your pay period requirements for controlling comebacks, and reaching predetermined CSI scores.
4. When it comes to guarantees, you should provide your techs with a guaranteed number of vehicles rather than a guaranteed number of hours. If you guarantee a specific number of hours, it’s no different than giving your techs a guaranteed income that they don’t need to work for. The first step is establishing the labor value of your average repair order. If you discover you average 2 labor hours per vehicle, then rather than giving your techs a guarantee of 30 hours, give them a guarantee of 15 vehicles. By using this approach it becomes up to them to do their job of properly inspecting the vehicles and performing the authorized services. If during the pay period you are only able to provide them with 13 of the 15 guaranteed vehicles, you’d owe them the four hour difference.
5. At Elite, we have a saying that goes, “When you hire Larry, you get Mary”. This means that you need to make sure your technician’s entire family is happy, so you always need to consider how you can reward your techs in a way that benefits their families. Rather than rewarding them solely through bigger paychecks, consider movie tickets that they can use with their kids, gift certificates to their favorite restaurants, etc. These types of gifts have “take home value”, and can help turn your technicians’ families into huge fans of you and your shop.
6. Never have your technicians compete against each other. Not only do they have different skills and abilities, but often times patterns develop where one tech wins every week, and the rest of your techs begin to view themselves as losers. I highly recommend that you set individual goals for each tech, and motivate them to compete against the person they should be competing against: Themselves. This way, all of your techs have the opportunity to be winners at the end of each pay period.
7. Instead of giving techs raises based on tenure, raises should always be based on their productivity (with the exception of raises that are based on inflation). Just because a tech has been with your company for a year doesn’t mean they are now worth more money. You need to provide all of your employees with the opportunity to earn a higher income by being more productive. If they have produced more in the past year than they did the prior year, then they have earned that raise. You should also consider having conditions in place in order to be eligible for raises, such as complying with company policies, completing a certain number of training hours, and acquiring specific certifications.
8. Never give cash incentives as bonuses. They are not only illegal, but send a message to your employees that you are willing to cheat the government, and give them good reason to question your ethics. Cash incentives violate the ethics of operating a good business, and may lead your employees to believe that if you are capable of cheating the government, why should they have confidence that you will always be honest and ethical with them, or your customers? I’d strongly recommend staying away from any policy that might cause your employees or customers to question your ethics.
Follow these 8 tips and you’ll be on your way to increased productivity, and to instilling the morale that your auto repair business needs to excel.
Since 1990, Bob Cooper has been the president of Elite, a company that strives to help shop owners reach their goals and live happier lives, while having a positive impact on their employees, customers and community. The company offers one-on-one coaching from the industry’s top shop owners, service advisor training, peer groups, along with sales, marketing and shop management courses. You can learn more about Elite by visiting www.EliteWorldwide.com.