When the labor rate in my area was $20 per hour, most shops either paid their techs $10 per hour on flat rate or 50 percent commission. A few years later when the door rates had risen to $24 and $26 per hour, most shops hired techs at $10.50 per hour on flat rate while the few shops that still paid commission were down to 40 percent. More recently, shops began getting $32 per hour while trying to hire techs at $12 per hour. Notice I said trying. When that amount didn’t work, a few shops in my area offered $12.50 or even $13, but only because no one responded to their previous offer.
Over the years, the labor rate has increased by 50 percent while technician compensation has risen by only 25 percent. In those same years, I’ve seen a drastic reduction in the number of technicians beating down the front doors of body shops to get to the “great pay and benefits” advertised in Sunday’s paper. (Obviously, there’s a connection.) I’ve heard valid explanations for the lack of increase in technician pay, but no one seems to be able to give me — or the thousands of other technicians in this industry — the gut feeling that something’s being done to remedy the situation. And from our perspective, that’s a big problem.
Let’s face it. It’s difficult these days for a collision repair technician to make a good living producing first-class quality repairs. Hacksterism and butchery pay more than top quality — and that’s backward.
What’s the solution? Some shop owners and managers are beginning to experiment with alternatives to old production-oriented pay plans. One of the most popular alternatives I’ve encountered is to negotiate an individual salary with each employee.
But as many shop owners have learned in the past and many more are learning now, shop production tends to taper off when the whole crew is on straight salary. Does a pay plan exist that will motivate techs to produce as much profit for the company as possible without compromising the quality of any repair? Yes. But the dynamics of each shop are different, so no one plan will work for everyone.
Get Your Priorities Straight
Production is still top priority throughout the industry, which is understandable. More production increases profits. But in too many shops these days, the thorough and meticulous repairman is shoved into a corner where he only fixes those vehicles owned by customers who seem to know where to look for repair flaws. That technician is considered slow and less profitable than the 150-hour-a-week guys, even though 99 percent of the “slow guy’s” customers are completely satisfied with his work. Although shop owners and managers cater to faster, more productive techs, the industry needs to focus more attention on the so-called slow but thorough technicians if it’s ever going to clean up its dirty image. Believe me, I’m not the only one who thinks that. I’d bet my next paycheck that there are techs working in your shop who think the same way.
Many of the faster repairmen who produce flawed repairs are actually quite capable of producing top quality repairs — but doing so would result in smaller paychecks. And how can you expect them to slow down and pay closer attention to detail for less money? Should the tech who consistently satisfies customers the first time make a higher hourly wage or higher percentage of the labor rate? While many shop owners will say it’s not good business sense to pay more money to a less productive tech, I say stop thinking of it as paying more for less and start thinking of it as paying more for better.
Another thing to consider is the message you send by paying more for better. If you have a really fast tech producing mediocre repairs and a slower tech producing impeccable quality repairs for a higher hourly wage or higher percentage, would the fast tech take measures to improve the quality of his repairs in an effort to earn a raise? Of course. By the same token, the faster — and shrewd — tech may improve quality only to get the raise and then go back to the previously used short cuts. Obviously, you can’t fix everything by throwing money at it, so it’s important to determine whether a technician will continue to maintain a high level of quality in his repairs before you start paying the higher rate.
Without incentives for quality, you’ll always have difficulty demanding top workmanship. You can hire trainees and teach them to do perfect work, but if they make more money by finishing more jobs, it’s just a matter of time before a portion of them start cutting corners. Trust me. As a technician, I know this firsthand. The young trainees who see other guys making good money on shortcuts will learn to use the shortcuts themselves. And as long as the cost of living continues to increase, many commission or flat-rate techs will continue to take shortcuts to increase their productivity, sometimes even if it means risking a customer’s life.
What could motivate these techs to go the extra mile and do everything by the book? As a tech, I know one thing that would help: writing more estimates and repair orders by the book. Perfect paperwork merits perfect repairs, and the technician who’s unwilling to produce perfect repairs deserves his walking papers.
But how many shops these days are ready, willing and able to guarantee their techs full payment for all necessary procedures? (If you’re one of the few shops that does, your techs appreciate it more than you know.) With more accurate estimates that cover all procedures, commission and flat-rate techs can better afford to take the needed time to perform all necessary procedures and complete better quality repairs.
I’ll let you in on a little secret: A large percentage of the collision industry’s technicians are disgruntled about their pay and have been for years — which is why many of them are leaving the industry for other trades. Of the remaining techs, many are disgruntled to the point of near bitterness and no longer care whether they produce quality repairs or not. In many cases, really good collision techs are producing mediocre repairs because their minds aren’t on it, their hearts aren’t in it and most of all, their employers/supervisors don’t care about anything except getting the job done fast. Every wreck on the lot looks like another hard-earned buck, while everybody else involved in the process is making more money for less physical labor.
You can change this by offering incentives for quality.
Are there other ways to pay more for better quality? Maybe. Consider what it’s worth to you to improve the level of quality and customer satisfaction in your shop. Is it worth $10 per customer? Maybe $20? Suppose that for each vehicle that goes through the shop, up to $20 went into an account. Suppose, again, that the money accumulated in this account was divided evenly and distributed to the entire crew in the form of a quarterly check. If levels of quality and customer satisfaction determined the size of the quarterly check, would your crew pull together to keep those levels as high as possible? As a crew member, I’d say yes.
Best of all, your customers can be the ones to decide how much the quality bonus should be on each repair. A few weeks after a vehicle is delivered and the customer has had time to drive and inspect his vehicle, send a one-page survey letter with a SASE for convenience. At the top of the page, briefly explain the importance of customer satisfaction as well as the fact that your employees receive quarterly cash bonuses, the amounts of which are determined by customer responses to these letters. Then list 10 questions or 10 categories of your crew’s performance that your customer could rate on a scale of one to 10 for a possible total of 100 points. The questions or categories should cover all aspects of the service: appearance and alignment of parts, proper function of components and drivability, paint appearance, cleanup and detail, etc. You may also want to include an “additional comments” section at the bottom or on the back of the page.
After each category of performance is rated by your customer on a scale of one to 10, the letter can be placed in the return envelope, which you’ve already stamped and addressed to your shop. The total number of points your crew scores on each survey can be multiplied by $.10 or $.20 and added to an account that, as mentioned earlier, is divided among the employees to make a rather attractive quality incentive. Since everyone gets an equal portion of the bonus, a good crew will work together to improve the bonus. To some shop owners, this may seem like another cut in profits or just one more thing to keep track of, but isn’t it worth the extra dollars and the extra effort to improve the quality of the services you provide?
Want another alternative? How about profit-sharing plans? If a portion of your monthly or quarterly net profit was divided equally and distributed to your crew, would they pull together and reduce costs where they can? Suppose your employees all buckle down and knock $1,000 off your expenses this month. By dividing $700 of that among all your employees, you provide ample motivation for them to save you money every month in all areas of the business. Once again, since everyone gets an equal portion, they may improve their teamwork to increase the bonus.
Better Pay for Better Work
These are all trial and error suggestions. They’ll work great with some crews … and not so great with others. As with any aspect of running a business, the best thing any owner can do is scrap a plan immediately if it’s not working. It’s better to move on and try different methods until we all find what works best for us in our own situations. And the time and effort you invest in finding the right incentive and pay plan for your shop will pay off in more content techs and higher-quality repairs.
Writer Paul Bailey, a contributing editor to BodyShop Business, has been a collision repairman for 17 years and is an avid photographer and writer who maintains a consumer-awareness Web page in his spare time. He resides in Florida with his wife, Cathy.