Joe, when I first started working with my father over 30 years ago, I wanted to hire a guy who was an ex Matco Tool man, he wanted 650 a week plus full paid benefits and 2 weeks a year vacation. My father told me it was too much, but if I thought the guy was good hire him and it was up to me to pull the difference. At the end of the first week my dad told me to give Karl an extra 100 cause he was worth it.  Not only did he pull his weight, but he was one of those guys that made everyone in shop better and helped me get better help.

38 minutes ago, RYAN B said:

Joe, when I first started working with my father over 30 years ago, I wanted to hire a guy who was an ex Matco Tool man, he wanted 650 a week plus full paid benefits and 2 weeks a year vacation. My father told me it was too much, but if I thought the guy was good hire him and it was up to me to pull the difference. At the end of the first week my dad told me to give Karl an extra 100 cause he was worth it.  Not only did he pull his weight, but he was one of those guys that made everyone in shop better and helped me get better help.

Wow!  Another great story about how great people make a great difference. I too have learned though the years that we are only as good as the people around us! Thanks for sharing that story! 

A recent article in Ratchet & Wrench magazine said, "Flat rate puts the burden on the employee and hourly puts the burden on the shop."  In the transmission business, I agree.  I don't know of a shop whose main source of revenue is automatic transmission repair that pays their technicians by the flat rate system although many general repair shops and dealerships do.
To me, if the front and back office are doing their jobs properly, including, 

• marketing
• advertising 
• selling

And by treating their customers right by giving them a pleasing experience, there should be plenty of jobs to perform.  Sadly, shops like that are in the minority.  I only discovered this truth in the last 7 years I was in business because I came from a technical background, not business. In most shops, the technicians fully expect slow times.  It wasn't true in our shop once I harnessed the power of the internet.  Although we had our first website in 1997, we didn't start using it properly until ten years later when I started spending more of my time in the back office.

I came to learn that no matter what the pay plan was, it was the office's responsibility to keep the shop busy and full of work.  That bears repeating, it is the office's responsibility to keep the shop busy and full of work.  I think the best techs like to stay busy by nature.  At least that has been my experience.  Techs that were slackers didn't stay around long or if they did, they soon got with the program from peer pressure from the other techs.

I don't care what compensation plan a shop offers, if the techs can't pay their bills with some leftover, they won't be around long.  Whether what's left over after paying bills goes to savings, entertainment, or whatever, that's their choice.  The key phrase I would often use is "a comfortable living."  Some techs struggle to buy tools as reported in this article.

Conversely, I believe most shops have their techs suffer the burden of ineffective marketing, advertising, and sales that lead to slow times.  To me, from a tech's perspective, this isn't right.  It's management's equivalent of a recheck or comeback.  Why should the tech be penalized for it being slow?  This is why we always paid by the hour and it worked well for us.  It placed the burden of keeping everyone busy on me, and not penalizing the techs if I didn't keep them busy.  Any compensation package is perfect as long as the tech makes "a comfortable living."  If you want to know what most technicians think, read this WrenchWay industry survey.

My solution for others is to either learn how to use the internet effectively or hire someone who can.  That was my solution to the perfect pay plan.