Employee agreements

[ncautoshop]

We've been looking for a new tech to help us grow recently and a topic that's come up for us is a minimum hour or weekly guarantee. I don't mind doing this at all, as I want pur techs to earn a fair and living wage. Honestly as far as I'm concerned I'd love for them to take 50% of the hourly rate including taxes - we want our employees happy and financially we'll. But I also want to be financially well, I'm concerned if I give a tech a minimum guarantee I may have productivity issues. In the same respect I'm not sure if it's acceptable to put a statement saying the minimum only applies to weeks when X amount of hours is not available or something similar. Any input?

Thanks in advance!

 

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[Andy Price]

I am trying a new approach by paying an hourly rate and then so much per flat rate hour on top of that.

[ncautoshop]

I am trying a new approach by paying an hourly rate and then so much per flat rate hour on top of that.

Very interesting. Any more data on how it works? Any employee feedback ?

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[Andy Price]

I am just a small shop me and another guy that is just beginning.  I pay him a base pay of 12 an hour and give him 6 dollars for every flat rate hour he turns. By doing this if we are ever slow he has a base pay and also initiative to stay busy on other things such as building maintainence etc. He seems to really like it and it works good for me.

 

[Joe Marconi]

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[ncautoshop]

I do agree that we need to pay our employees a decent wage. It's a main factor in attracting quality people to our industry. The only thing I would recommend is to carefully look at your overhead, cost of sales and make sure your generating enough profit. This may take some time, but it's worth it.  In other words, it's one thing to want to pay someone a certain amount, but you need to make sure the company earns a profit and that the technician is generating enough labor production hours.
I pay techs a base wage, which is above average in my area, and also pay production bonus on top. 
One more thing, money is not the only motivator for production. A healthy work environment, with a strong leader, and recognition of your employees will do wonders for your production.
 

Thanks Joe!
We're a small shop so we struggle with the offerings that some employees are looking for beyond pay. We do offer a family like environment that's very laid back and everyone that works for us seems to appreciate it. We could certainly use some orginization & productivity improvement but that's a struggle when the owner is turning wrenches and writing service. I think we're finally to a point where expanding is a real possibility, but we've got to find some quality techs!

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[AndersonAuto]

I used to struggle with this when I first started out. I found that technicians would generally ask for enough money to make sure they can pay all their bills as a "guarantee". The end result was lazy technicians. If I would guarantee a guy 30 hours plus whatever he produced above that, he would invariably produce 28-32 hours.

Years ago I decided that all my techs would be flat rate with no floor. I also put my advisor on a straight commission plan with no floor. The result has been technicians who are almost always flagging over 40, and advisors who sell. My job is to give them all an opportunity to succeed.

A side benefit to this is in the bookkeeping. My tech wages are calculated as a COGS as they have a direct correlation to billed labor. It makes life easy when you're looking at your labor profitability vs ELR etc. Having a disconnect between labor hours billed and technician wages muddies the waters a bit. And since I'm the laziest human being on the planet, I like easy.

No matter what you do with your pay plan, one adage I always go back to is "There's no better manager than a properly structured pay plan". If your pay plan by default has your employees doing what you want them to do, life gets easy for everyone.

[3PuttFever]

I pay a healthy living, hourly wage for the slow times and when the RO's just don't work out for whatever reason for the Tech. I want them to earn a percentage of what they produce and give them their hourly or the % of their production, whichever is greater. From the accounting side it works best to pay them hourly and then calculate the % as a bonus when they hit minimum production levels. 

[Hands On]

I give them a 30 hour guarantee but they do not get it if they produce less then 30 and I have cars left over every day.