Quantcast
Jump to content


Recommended Posts



$120 Chicago suburbs. I can see $130 by the end of the year.

I think in the near future we will be going thru a major industry change. I think labor rate will go up substantially.....like 30%. There is a major tech shortage out there and the ones who will win will be able to compensate their people properly and that's going to take a lot more $$$ and a change in how we currently compensate techs. (flat rate)

Of all the industry speak I hear all shops including so called good ones are having difficult times finding employees. Business has been really really good....but we can't keep up.

  • Like 2
Link to comment
Share on other sites

I completely agree with the change coming. With a shortage of Techs the industry will need to raise wages to get people interested in the trade. I’m trying to stay ahead of the curve.  

Local dealer has an add out with a $10,000 signing bonus. I had seen $1500 - $2500 in the past two years and have had trouble finding 2 good tech's myself but things must be worse than I thought.

Edited by ohlmannr
Link to comment
Share on other sites

I like seeing this, the industry has been low for years, our techs are valuable and we pay them well  

We are in Marin county our labor Rate is 155.00. The near by dealers are at 175.00,

i am considering a thee dollar bump because of recent expenses. 

Tony. 

  • Like 1
Link to comment
Share on other sites

My experience in the past two years I went from $85 - $95 then $95 - $105 my car count has increased.  Industry standard is around 2 hrs per RO I think. So if you raise your rate $10 per hr the increase average is about $20. If a customer doesn’t come back over $20 either you don’t want that customer or you haven’t built enough value into your repairs or service.

 

  • Like 3
Link to comment
Share on other sites

We are just outside of Pittsburgh, PA and recently raised our rate to $100. But we tend to adjust it down if the bill seems too high. Probably not a good practice on our part but we aren't in an affluent area so we try to take care of people if we can. The average rates in our area are $80-$110.

 

Link to comment
Share on other sites

I'm in Bakersfield CA and our rate is $126.57, $110 for first time customers, $96.50 for initial testing time, $189.86 is they bring their own parts. We are definitely the highest in town, by a long shot, and we pay our techs probably the highest in town. I actually want to pay the highest in town and I want everyone to know it.

We've struggled with parts margins and overall GP% and I wonder how you all hit your GP goals with such low labor rates. Not being sarcastic, I really wonder. I'd like to know what labor and overall GP percentage you're hitting with those labor rates.

  • Like 1
Link to comment
Share on other sites

I’m really surprised to see a sub $130 rate in California and to hear it’s among the highest. You mentioned labor GP %. The cost of living and going rates for tech’s from each of our areas I’m sure is different so that will have an effect.

I like the fact you are paying top dollar for techs. I’m moving in that direction and the only way I can do that is to continue to raise my labor rates. I wont actively poach other shops, but I wouldn’t mind if word got out that we have a great place to work, good car count and we pay well. If anyone has looked for techs lately you know they are hard to find. I believe anyone who wants to survive in the coming years is going to have to raise their rates a significant amount to retain your current tech’s or attract new ones.   

Link to comment
Share on other sites

We're in the central valley of CA, so more of a midwest economy than SoCal and the bay area. We have among the lowest home prices in CA. We are the highest, the shop across the street from us has a $90 labor rate, a couple of my friends who own shops are at $98. I just decided I need to charge what we're worth regardless of what anyone else did. In the last few years we went from $89 to $126.57, and we've grown 30+% per year for the last 4 yrs. I'm pretty convinced that labor rate is a state of mind. If we're going to attract the type of techs we'll need in the future, we better make it an attractive, relatively high paying job, and to do that we need to charge enough for what we do. I learned that nothing bad happens by raising the labor rate. We had a strategy, we kept initial test time lower so we don't have to discuss a higher rate, and we avoid quoting rate...way too many ways to nicely and credibly side step the issue...and if we must quote a rate we quote our average rate (effective rate). We also price frequent services, like oil changes, brake jobs, trans service, etc, at competitive prices...what we call comparables. And, we focus on the customer having a great experience. I know every one of you could raise your labor rate $10 tomorrow and nothing would happen.

  • Like 3
Link to comment
Share on other sites

When you say you've grown 30+% I'm assuming you mean in sales and not car count, hours billed or some other metric. It's logical that you would have a big increase in sales if you raised your labor rate 42+%. So your car count and hours billed might not actually change, you're just making more for the same work. And that ain't a bad thing.

 

Link to comment
Share on other sites

Good point. One of the things we did to build car count was go to cheap oil changes, which dropped our ARO. We've worked hard to get ARO and GP up to where it should be, and we're finally having a very good year in GP and net. From 2013 to YTD 2017 we grew an average of 33.5% per yr in gross sales, 35% in car count, and 27.5% in hours billed. And at the same time raised our labor rate from $89 to $126.57.

I started my shop from scratch 7 yrs ago with me and a partner. I bought him out in 2013. I now have 8 employees plus me, and I don't work in the shop. I'm only saying this stuff to encourage others to not be afraid to raise your rates. When my partner left I was afraid to raise the labor rate, and I worked my ass off and didn't make any money. Then I was challenged to raise the rate and I did, then raised it again, and again, and again, in both big jumps and small jumps. Nothing happened, and we kept growing. If I can encourage some of you to just raise the rate then we're all better off. Friendly service and marketing matter, price is very minor.

  • Like 5
Link to comment
Share on other sites

  • 4 months later...
  • Alex changed the title to Shop Labor Rate
  • 2 years later...
On 1/1/2018 at 10:33 PM, Silas Martin said:

When you mention paying your techs "well", would you care to share what dollar range that is? I think our highest paid tech non equity individual is paid "very well". Is anyone paying more than 80k a year?

That, in my opinion is "very well"!  I can't imagine how you pay a tech 80K/year with a labor rate as you stated of $74ish. How is there any left for you or expenses? Next question; Are you hiring? lol.

Link to comment
Share on other sites

All in, my guys get over $80k per year.  That includes the whole picture, salary, tool allowance,  health care, IRA contribution etc...  We're in Westchester County NY and the labor rate is 113 and going up.  I can't  seem to attract techs either.  Maybe I'm not looking in the right places, maybe not offering enough, maybe no one is out there...  I wish I had the answer.  One thing i do know... my labor rate will be higher this week and I'll be paying closer attention to parts margins.

  • Like 2
Link to comment
Share on other sites

We're at $130 and on our invoices, I don't print the rate or hours (not required to).   We simply quote a labor charge for the job.   I have a shop near me with a labor rate of $99, but job for job, his labor charges are same or higher than mine - using additional labor hours.  We pad for our persistent negotiators to have room for them "to win".   If asked, we share the labor rate.   We start with a base diagnostic of $99.95 for the 1st hour.  While working on this, we fail to always charge for longer diags.  Sometimes it's lost and sometimes we factor it into the rest of the job when building the quote.      Even when we're asked the labor rate, we haven't received any negative feedback on it.  We build value / trust which helps on approvals.  If we don't close a deal, it is usually related to cost-of-job vs value-of-the-car OR cost-of-job vs down-payment on a new car.   I get more vitriol for having the audacity to charge for diag.   If I get a pure price shopper, I quickly dismiss them saying we won't be the cheapest.

 

  • Like 2
Link to comment
Share on other sites

$110 to $120 depending on type of work done, northwest rural Seattle. Labor rate needs to be set by a lot of expense factors and I think you really need a variable rate for different types of jobs, most modern management system can do this.

One of the expense factors here is how much you pay your Technicians, I hear and read how hard it is to find good experienced Techs and most agree that low pay is a big factor especially when trying to bring up new Techs, I am sure there is shops out there taking good care of there top Techs, I have been Tech for over 40 years now and my pay has been stagnant for the last 20 years but I have seen labor rates at the shop's go up nearly 40% ????   I understand the cost of doing business in this industry and how its rising all the time, I started at 50% labor 10% parts at a gas station then went to a Dealership and it dropped to 40% Labor has dropped from there now around low 20%. When Looking for new Employees you have to show the cost of the position, insurance your retirement plan tool allowance ect. ect. now the employee can feel better about the base wage and why its not 50% labor any more. 

This is a good Podcast about how they are doing Business Down under  and there way of pricing.

 

       

  • Like 1
Link to comment
Share on other sites

  • 2 weeks later...

Shop labor rate should be set off your shop’s fixed costs & hours of operation, not what somebody else is charging.  That’s what we do.  However, I don’t tell customers what we charge per hour, I simply tell them we charge by the job, not by the hour.  We are a transmission specialty shop and for most vehicles, we charge $1,750 labor only for the R&R and the build.  Some are less, some are more.  When calculating by the hour behind the scenes, we calculate it @ $125/hr but still tell the customer we charge by the job if they ask how much an hour, but that’s only perhaps >2% of all customers who ask.

In my experience, the subject of shop hourly labor rate virtually never comes up unless we mention it.  Most people only want to know the bottom line.

  • Like 1
Link to comment
Share on other sites

The people that ask the labor rate are not normally good customers. We price by the job brake pads and rotors $335 plus tax for most cars just an Example but that's all they want to know how much to get my car fixed. Tell someone its $90/hr next thing you know they show up with half the bolts taken out and parts in the trunk "imma pay you 30 mins to put it together right now quick" so I just price the job so we can pay everyone to work another day. 

  • Like 1
Link to comment
Share on other sites

  • 1 year later...

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • Available Subscriptions

  • Have you checked out Joe's Latest Blog?

         0 comments
      It always amazes me when I hear about a technician who quits one repair shop to go work at another shop for less money. I know you have heard of this too, and you’ve probably asked yourself, “Can this be true? And Why?” The answer rests within the culture of the company. More specifically, the boss, manager, or a toxic work environment literally pushed the technician out the door.
      While money and benefits tend to attract people to a company, it won’t keep them there. When a technician begins to look over the fence for greener grass, that is usually a sign that something is wrong within the workplace. It also means that his or her heart is probably already gone. If the issue is not resolved, no amount of money will keep that technician for the long term. The heart is always the first to leave. The last thing that leaves is the technician’s toolbox.
      Shop owners: Focus more on employee retention than acquisition. This is not to say that you should not be constantly recruiting. You should. What it does means is that once you hire someone, your job isn’t over, that’s when it begins. Get to know your technicians. Build strong relationships. Have frequent one-on-ones. Engage in meaningful conversation. Find what truly motivates your technicians. You may be surprised that while money is a motivator, it’s usually not the prime motivator.
      One last thing; the cost of technician turnover can be financially devastating. It also affects shop morale. Do all you can to create a workplace where technicians feel they are respected, recognized, and know that their work contributes to the overall success of the company. This will lead to improved morale and team spirit. Remember, when you see a technician’s toolbox rolling out of the bay on its way to another shop, the heart was most likely gone long before that.
  • Similar Topics

    • By Joe Marconi

      Premium Member Content 

      This content is hidden to guests, one of the benefits of a paid membership. Please login or register to view this content.

    • By Changing The Industry
      The Crucial Role of Scanning in Collision Repair
    • By carmcapriotto
      Thanks to our Partners, Shop Boss, and 360 Payments In this episode of For the Record, Maylan Newton tackles the pressing issue of the technician shortage in the automotive industry. Maylan emphasizes the importance of proactive involvement from shop owners and industry representatives in engaging with educational institutions and students. He highlights the need for better representation at vocational events and the necessity of running businesses that attract and retain skilled technicians. Maylan urges the industry to work together to create an inviting career path for the next generation. Maylan Newton, ESI- Educational Seminars Institute. Maylan’s previous Episodes HERE Show Notes
      Hiring Challenges in the Industry (00:00:30) Maylan discusses the full-time nature of hiring and the industry's struggles to attract technicians. Skills USA Event Insights (00:01:02) Maylan shares his experience at a Skills USA event, highlighting the lack of automotive representation. Engaging Young People (00:02:19) He emphasizes the need for the automotive industry to inform youth about career paths available. Personal Outreach to Schools (00:03:24) Maylan recounts his efforts speaking at high schools to promote automotive careers. Importance of Industry Visibility (00:05:25) Maylan urges industry members to actively engage with schools and promote career opportunities. Attracting and Retaining Technicians (00:06:17) He stresses the need for fair treatment and compensation for new technicians entering the field. Talent Acquisition Efforts (00:08:01) Maylan highlights the proactive approach of other industries in recruiting young talent. Call to Action for Shop Owners (00:09:38) He challenges shop owners to commit to engaging with local schools and vocational programs. Quotes for Inspiration (00:10:35) Mahlon shares motivational quotes to encourage industry involvement and improvement.
      Thanks to our Partners, Shop Boss and 360 Payments Shop Boss – Shop Management Software built by shop owners for shop owners. It works the way you need it to, right out of the box. Find on the web at https://shopboss.net Connect with the Podcast: -Follow on Facebook: https://www.facebook.com/RemarkableResultsRadioPodcast/ -Join Our Virtual Toastmasters Club: https://remarkableresults.biz/toastmasters -Join Our Private Facebook Community: https://www.facebook.com/groups/1734687266778976 -Subscribe on YouTube: https://www.youtube.com/carmcapriotto -Follow on LinkedIn: https://www.linkedin.com/in/carmcapriotto/ -Follow on Instagram: https://www.instagram.com/remarkableresultsradiopodcast/ -Follow on Twitter: https://twitter.com/RResultsBiz -Visit the Website: https://remarkableresults.biz/ -Join our Insider List: https://remarkableresults.biz/insider -All books mentioned on our podcasts: https://remarkableresults.biz/books -Our Classroom page for personal or team learning: https://remarkableresults.biz/classroom -Buy Me a Coffee: https://www.buymeacoffee.com/carm -The Aftermarket Radio Network: https://aftermarketradionetwork.com -Special episode collections: https://remarkableresults.biz/collections The Aftermarket Radio Network Remarkable Results Radio Podcast with Carm Capriotto: Advancing the Aftermarket by Facilitating Wisdom Through Story Telling and Open Discussion Diagnosing the Aftermarket A to Z with Matt Fanslow: From Diagnostics to Metallica and Mental Health, Matt Fanslow is Lifting the Hood on Life. The Auto Repair Marketing Podcast with Kim and Brian Walker: Marketing Experts Brian & Kim Walker Work with Shop Owners to Take it to the Next Level. The Weekly Blitz with Chris Cotton: Weekly Inspiration with Business Coach Chris Cotton from AutoFix - Auto Shop Coaching. Business by the Numbers with Hunt Demarest: Understand the Numbers of Your Business with CPA Hunt Demarest. Speak Up! Effective Communication with Craig O'Neill: Develop Interpersonal and Professional Communication Skills when Speaking to Audiences of Any Size.              
      Click to go to the Podcast on Remarkable Results Radio
    • By carmcapriotto
      Thanks to our Partners, AAPEX, NAPA TRACS, and Automotive Management Network "I Went to Yale Law School and Trade School Because American Prosperity Depends on Both Lawyers and Tradespeople." Darnell Epps Darnell Epps, a Yale Law School graduate and CEO of Thurgood Industries, and Andy Bizub, owner of Midwest Performance Cars, discuss the importance of skilled trades and the need to promote alternative career paths. Darnell shares his inspiring journey from a challenging upbringing to success, emphasizing the value of vocational schools and education. Andy highlights the urgent demand for skilled workers in the automotive industry. Together, they advocate for greater collaboration between industry, education, and families to bridge the skills gap and create fulfilling career opportunities. Darnell Epps, CEO, Thurgood Industries Andy Bizub, Midwest Performance Cars, Chicago and Northbrook, IL.  Andy’s previous episodes HERE. Show Notes
      Darnell's Law School Experience (00:02:31) Darnell shares his memorable graduation moment at Yale Law School with his children present. Darnell's Background in Brooklyn (00:03:20) He discusses growing up and overcoming challenges through education. Connecting Darnell's Story to Skilled Trades (00:04:32) Carm highlights the relevance of Darnell's experiences to the skilled trades industry. Darnell's Journey to Lincoln Tech (00:04:53) Darnell explains his decision to attend Lincoln Tech while working on legal issues in low-income neighborhoods. Skills Gap in the Workforce (00:06:39) Darnell discusses the desperate need for skilled workers in various industries he encountered. Darnell's Training at Lincoln Tech (00:07:45) He details his enrollment in a machining program and his experience at the Kentucky Advanced Manufacturing Institute. Tapping into Hidden Talent (00:09:20) Darnell emphasizes the importance of connecting skilled trades with underutilized talent in communities. Need for Skilled Workers in Automotive (00:10:27) Andy highlights the projected demand for automotive technicians over the next decade. Parallels in Darnell and Andy's Stories (00:11:36) Andy shares similarities in their backgrounds and the importance of skilled trades for future generations. Importance of Alternative Education Pathways (00:12:48) Both speakers stress the need for diverse career paths beyond traditional education. Engaging Parents in Career Decisions (00:13:21) Darnell advocates for involving parents in discussions about alternative career options for their children. Celebrating Skilled Trades (00:14:57) Darnell expresses his desire to raise awareness about the craftsmanship and opportunities in skilled trades. Changing Perceptions of Education (00:15:39) Darnell challenges the notion that success is only achievable through traditional college pathways. Personal Educational Experiences (00:20:08) Andy shares his own college dropout story and how he found his passion in the trading business. Job Security in Legal vs. Technical Fields (00:20:36) Andy highlights the job security differences between legal professions and technical trades amid automation. The Evolution of Skilled Trades (00:21:18) Discussion on the changing perception of blue-collar jobs and the need for skilled workers. Automation and Job Security (00:21:40) Exploration of how automation is transforming factory jobs, enhancing the need for skilled labor. AI and Productivity in Repair Shops (00:23:34) The potential of AI to improve technician productivity and efficiency in automotive repair. Goals of Thurgood Industries (00:26:27) Darnell shares his vision for connecting employers with hidden talent pools in underserved communities. Building a Community for Skilled Workers (00:29:04) Discussion on creating a platform to celebrate skilled workers and improve public perception. Introducing the Thurgood App (00:32:35) Overview of the app designed for skills assessments and community engagement among skilled workers. Darnell's Legal Aspirations (00:35:28) Darnell discusses his plans for the bar exam and pro bono legal work in the future. Advocating for Skilled Trades (00:39:23) The need for industry leaders to engage with educators and promote the importance of skilled trades.
      Thanks to our Partners, AAPEX, NAPA TRACS, and Automotive Management Network Set your sights on Las Vegas in 2024. Mark your calendar now … November 5th-7th, 2024. AAPEX - Now more than ever. And don’t miss the next free AAPEX webinar. Register now at http://AAPEXSHOW.COM/WEBINAR NAPA TRACS will move your shop into the SMS fast lane with onsite training and six days a week of support and local representation. Find NAPA TRACS on the Web at http://napatracs.com/ Get ready to grow your business with the Automotive Management Network: Find on the Web at http://AftermarketManagementNetwork.com for information that can help you move your business ahead and for the free and informative http://LaborRateTracker.com Connect with the Podcast: -The Aftermarket Radio Network: https://aftermarketradionetwork.com -Follow on Facebook: https://www.facebook.com/RemarkableResultsRadioPodcast/ -Join Our Private Facebook Community: https://www.facebook.com/groups/1734687266778976 -Join Our Virtual Toastmasters Club: https://remarkableresults.biz/toastmasters -Subscribe on YouTube: https://www.youtube.com/carmcapriotto -Follow on LinkedIn: https://www.linkedin.com/in/carmcapriotto/ -Follow on Instagram: https://www.instagram.com/remarkableresultsradiopodcast/ -Follow on X: https://twitter.com/RResultsBiz -Visit the Website: https://remarkableresults.biz/ -Join our Insider List: https://remarkableresults.biz/insider -All books mentioned on our podcasts: https://remarkableresults.biz/books -Our Classroom page for personal or team learning: https://remarkableresults.biz/classroom -Buy Me a Coffee: https://www.buymeacoffee.com/carm -Special episode collections: https://remarkableresults.biz/collections            
      Click to go to the Podcast on Remarkable Results Radio
    • Fast Free Shipping on All Orders Over $50
    • By carmcapriotto
      Thanks to our Partners, Shop Boss, and 360 Payments
      Matt Fanslow, host of "Diagnosing the Aftermarket A to Z," discusses the critical importance of consulting service information before performing vehicle maintenance or repairs. Matt shares multiple real-world scenarios illustrating why thoroughly understanding service procedures is essential to avoiding costly mistakes and ensuring professional work.
      Diagnosing the Aftermarket A to Z with Matt Fanslow: From Diagnostics to Metallica and Mental Health, Matt Fanslow is Lifting the Hood on Life. [email protected]
      Show Notes
      Importance of Service Information (00:00:25) Matt emphasizes the necessity of reading service information before starting any repair work. Common Mistakes in Vehicle Maintenance (00:01:12) Matt shares horror stories of technicians neglecting service information, leading to mistakes during vehicle maintenance. Encouragement to Use Service Info (00:04:03) Matt advises technicians to always consult service information before starting any job. Warranty Concerns and Accountability (00:05:05) Discussion on the importance of service information for warranty claims and accountability in repairs. Pay Structure and Professionalism (00:06:34) Matt addresses how pay structures can affect adherence to proper procedures in the automotive industry. Call to Action for Technicians (00:07:34) Matt encourages a cultural shift towards professionalism by prioritizing service information in repairs.  
      Thanks to our Partners, Shop Boss and 360 Payments
       
      Shop Boss – Shop Management Software built by shop owners for shop owners. It works the way you need it to, right out of the box. Find on the web at https://shopboss.net
      Connect with the Podcast:
      -Follow on Facebook: https://www.facebook.com/RemarkableResultsRadioPodcast/
      -Join Our Virtual Toastmasters Club: https://remarkableresults.biz/toastmasters
      -Join Our Private Facebook Community: https://www.facebook.com/groups/1734687266778976
      -Subscribe on YouTube: https://www.youtube.com/carmcapriotto
      -Follow on LinkedIn: https://www.linkedin.com/in/carmcapriotto/
      -Follow on Instagram: https://www.instagram.com/remarkableresultsradiopodcast/
      -Follow on Twitter: https://twitter.com/RResultsBiz
      -Visit the Website: https://remarkableresults.biz/
      -Join our Insider List: https://remarkableresults.biz/insider
      -All books mentioned on our podcasts: https://remarkableresults.biz/books
      -Our Classroom page for personal or team learning: https://remarkableresults.biz/classroom
      -Buy Me a Coffee: https://www.buymeacoffee.com/carm
      -The Aftermarket Radio Network: https://aftermarketradionetwork.com
      -Special episode collections: https://remarkableresults.biz/collections
      The Aftermarket Radio Network
      Remarkable Results Radio Podcast with Carm Capriotto: Advancing the Aftermarket by Facilitating Wisdom Through Story Telling and Open Discussion
      Diagnosing the Aftermarket A to Z with Matt Fanslow: From Diagnostics to Metallica and Mental Health, Matt Fanslow is Lifting the Hood on Life.
      The Auto Repair Marketing Podcast with Kim and Brian Walker: Marketing Experts Brian & Kim Walker Work with Shop Owners to Take it to the Next Level.
      The Weekly Blitz with Chris Cotton: Weekly Inspiration with Business Coach Chris Cotton from AutoFix - Auto Shop Coaching.
      Business by the Numbers with Hunt Demarest: Understand the Numbers of Your Business with CPA Hunt Demarest.
      Speak Up! Effective Communication with Craig O'Neill: Develop Interpersonal and Professional Communication Skills when Speaking to Audiences of Any Size.
      Click to go to the Podcast on Remarkable Results Radio


  • Similar Tagged Content

  • Our Sponsors



×
×
  • Create New...