|How do you make your money?|
Sure, you turn wrenches for a living, but how is your work measured? How does your boss know how much to give you at the end of the day?
In a very busy shop, a flat-rate system might make sense for technicians. Certain jobs should require only a certain amount of time and it’s the technician’s responsibility to do his or her work properly and on time.
Most service departments at dealerships use the flat-rate system in place – although the rationale for that isn’t necessarily top-of-mind.
Gino Pennino, the service manager of Raceway Chrysler Dodge Jeep in Toronto, says the flat-rate system has been in place since he started working there 15 years ago. "This is the way it always has been," he said.
The sentiment is echoed by Scott Fraser, service manager at Fraser Ford in Oshawa, ON. Asked why it’s preferred, he said, "I’ve never really thought about it, that’s the way it was always done."
"If you’re in a shop that’s not so busy, flat rate doesn’t work too well," he says. "There’s no back-up policy to cover you and there are no minimums. In a some cases, some of the shops will have a minimum that they will cover you for at least 20 hours a week. There"s usually that much work coming through the doors so they don’t have to worry about it."
Timothy Martin, owner of Martin Automotive in Moncton, NB, also used to work in a flat-rate shop. "A straight hourly system is better. You do your job and you get paid for what you do," he says. "I’m running my own company now and I would never go and do that [have a flat rate system] to the employees that I hire. Have an hourly rate and you keep the employees happy."
Rudy Cordoviz, of 3C Auto Clinic in Winnipeg, MB, jokingly says if he were to implement the flat-rate system in his shop there would be dire consequences. "They’d be starving if we had a flat rate. If the technician does a three-hour job in six hours he’s not going to make any money."
He also has deep reservations about the quality of work performed in flat-rate shops. "If the guy’s on flat rate, he’s rushing the job," says Cordoviz. "He wants to get into the next job. He wants to put in his eight to 12 hours instead of three hours."
Most independent auto service shops pay their technicians using an hourly fee.
Tony Suberlak, owner of A&M Auto Centre in North Battleford, SK, says, "Most guys don’t like flat rate, because in slow times they wouldn’t make any money." His shop had a flat-rate system in place about 20 years ago, but the hourly system has proven better for the technicians.
"We try not be slow," says Suberlak, "but it does happen so we have to bite the bullet."
At Precision Auto Clinic in Moncton, NB, the technicians on staff are sold on the hourly system. Manager Gary Lovelock says the hourly system is fair for everybody. "We talked about it [moving to a different wage model]. The boys aren’t interested in it. They prefer the hourly wage."
For some owner/operators neither the fixed rate nor hourly rate system works. Peter Warren, one of the owners of Multi-Tech Automotive in Hatchet Lake, NS, says, "There are two technicians in the shop – my partner and me. As partners we both draw a salary."
What about you? How do you get paid? Do you wish your shop were using a different model? Drop us a line at Canadian Technician, 451 Attwell Drive, Toronto, ON, M9W 5C4. Or call the Canadian Technician hotline at 1-866-22-6787.
The problem isn’t the backyarder, its price differenciation. As a shop you simply cannot charge each client the maximum that they are willing to pay. But the backyarder can, he will negotiate the price.
Yes you offer a different “product” but the price is limiting your product. If you want to play the quality card you have to prove that you install better parts, faster, with a warranty and are easier to deal with than your competition. I’m not talking about a coke and a smile but something that can really differentiates your quality from the others.
Else, you probably don’t want that customer anyway – they will try to get you to install a garage spring to hold their trunk lid open after they cut the original spring to install 6X9 speakers that don’t fit behind the rear headrests….