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Many Shops Have Raised their Labor Rates, But Still Struggle!

Joe Marconi
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juanpablo4219 Contributor

juanpablo4219

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On 12/1/2024 at 3:27 PM, Transmission Repair said:

Speaking of shops experiencing an uptick in labor costs, has anybody allowed for bonuses?  What about a holiday (Thanksgiving, Christmas, etc.) bonus?  What do you consider if and when a bonus is warranted?

Has anybody noticed the massive layoffs and businesses that are closing locations?  I don't understand why shipping companies are laying off a lot of employees at the busiest time (holidays) of the year.

If your making reference to the season, at this point it's the hi season for them. The holidays is the answer. Business closing, there are so many factors.
For the shipping companies laying off, they're at their peak due to the Holidays and online orders, not laying off until after season... The purchasing habits have change a lot...
My sales for November & December had diminished a lot, nothing to compared to the previous months. My thoughts for this year, "Black Friday turn into Black November" The Black Friday sales started early in November and not in the Black Friday, therefore people spending on gifts and specials for the holidays. Once we got to the Thank Giving week, the consumer buy food and kids are out of school, so their funds go to the groceries store.
The auto shops are empty since the consumer does not consider their car well being since it runs, if it does not run then they'll consider doing something about it... it's an uphill battle. and Yes, I have been advertising even more, with very little outcome.

 

weighit Enthusiast

weighit

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Posted

I may have done it all wrong when I owned the last service business in figuring my true costs, but this is what I did. Took every single expense that we had for the entire year, everything from taxes, materials payroll, utilites, advertising, damages. Tried to not miss one thing and got a total. Then counter every single hour worked in the shop, if I or any employee was there, it got counted as worked hours. Didived that and got my true cost to have the business by hour opened. So I knew what I was having to bring through the doors to be open and break even. Knowing that I knew to make a profit, or I should say to make the profit I wanted I then knew how much over that dollar per hour rate I needed to make, on every hour we were working. Right or wrong it kept me on my toes and we did make a decedent profit every year.  It also let me know how much every year to raise my prices to keep my profit where I wanted it.

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      The Toolbox is Last to Leave, First is the Heart
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      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.

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