The automotive repair industry is at a critical point, with shop owners struggling to attract and retain skilled technicians by clinging to outdated wage expectations, according to a business coach.
Speaking at the Tirecraft 2025 Conference in Blue Mountain, Ontario, automotive aftermarket business coach Alan Beech shared a discussion that captured the industry’s current labour challenges. He described a shop owner who was “pulling his hair out” over a complete lack of technicians. He has no techs working for him. Yet stubbornly refusing to pay more than $35 per hour.
“What’s so magical about $35?” Beech wondered. “There’s nothing magical about that number, but he has put that as a line in the sand that he won’t go across. Hence, he doesn’t have any technicians working for him.”
The problem goes beyond a simple wage dispute. Beech outlined a comprehensive strategy for shop owners to rethink their approach to technician compensation. He recommended paying top technicians 30 per cent of the shop’s effective labour rate.
Using a practical example of a shop with a $140 door rate, Beech demonstrated how this translates to wage calculations. He calculated that an effective labour rate is typically about $12 lower than the shop rate.
So with an effective labour rate of about $128 — and a top tech should be earning around 30 per cent of that — there is an issue. That puts the shop’s top pay rate at $32 an hour.
“And you simply can’t hire techs at that rate in today’s market,” Beech said of top-skilled technicians.
The solution, according to Beech, is straightforward but challenging for many shop owners: Raise door rates. He drew parallels to other industries, pointing out that price increases are a natural response to rising costs.
“If our costs go up, our door rate will go up,” Beech said. “It happens everywhere. Happens with groceries. It happens with everything. And they don’t have any negative thoughts about raising our grocery prices. We need to do the same — if our costs go up, we’ve got to raise our prices. And we have to move it up.”
Image credit: Depositphotos.com
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Comments
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I guess there are two ways of running an aftermarket automotive business. #1: Keep cost down, making less money over a longer period of time, while retaining customers and reducing their lifetime car count. or #2: Have high overhead making as much money as quickly as possible and unload the business before you lose all your customers back to the dealership for a new car or new lease.
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With the advances in technology the skill level of the techs increases. If you want to keep your shop current you need to attract the higher level technicians. Higher wages are reflected in the shop labour rate. A fair wage is one way but the shop environment is also very important. Getting a team that works together is as important as wages. Shops that cater to their market by keeping current with technology will attract and keep customers. High skill level techs will keep the business growing by being able to service the complex vehicles on the road today. Without the high skill level technicians you will be losing business to shops that can service everything.
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Missing from this conversation is the important distinction between flat rate and hourly. There is zero argument to be made against $40 + in a flat rate environment. In an hourly scenario, guys should be pretty happy to be getting mid $30’s for sweeping the floor in January while the boss eats kraft dinner. Over the course of a year, depending on the shop, I believe the hourly tech making a lower hourly rate is living the better life. There is definitely an upside to a predictable, 44 hour paycheque. When combined with no nights and no weekends that the flat rate dealer techs have to contend with, is it really even a discussion?
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Another point missing from this conversation is the BS that this industry spews. Throwing bogus numbers around just like our Politian’s do. Alan states that an effective labour rate is typically about $12 lower than the shop labour rate.” So a $100 shop rate will have an 88% efficiency rate, $140 labour rate will have a 91% efficiency rate and a $200 labour rate will have a 94% efficiency rate. Therefore the higher the shop labour rate is, means the more efficient the shop is? Also a $140 shop labour rate with a $128 effective labour rate providing the top technician wage from 30% of the effective labour would be $32 an hour? ($128 x 30%= $38.40 an hour, not $32) Regardless $70,000 -$80,000 wage for a blue collar job is a pretty good wage. I’ve talked to numerous top technicians over the years and we all have the same opinion. If a tech states they are making over $100,000 a year, they are either lying or stealing. As for technology, being a technician owner it is my reasonability to educate myself and choose what technology and when to implement it into my business not my “top tech’s” reasonability. Imagine your “top tech” coming back from training and stating you need to remove that hoist and make room for ADAS equipment, or we have to license with CASIS as a locksmith and purchase the Autel IM608II so we can program 2 key fobs a year. As far as I am concerned the way this industry promotes itself is chasing everyone out of it. Young techs and new shop owners need to know that this is a very lucrative business and they don’t need to repair every fault on every make and model car to be successful. My advise to young technician owners out there is don’t be a hero, cover your back side, and go after the money. Train and educate yourself for new technology, implementing it slowly into your business , while raking it in on chassis work.
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Auto mechanic door rates in my area, North Central Alberta, range range between$150 to $175 an hour. That would be amazing, if only I wasn’t running a collision repair facility. Being under the thumb of the auto insurance industry is somewhat depressing. I spend tens of thousands every year on training and equipment upgrades, even though the highest paying insurer, pays a rate of $82.00/hr. I recently received an insurance estimate/appraisal from Intact Insurance to repair a vehicle at the rate of $72.50/hr. I feel like I’m still in the 1990’s.
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