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How are you paying your technicians?

Successful Dealer Staff November 21, 2012

Having a strong payment structure can help your dealership keep quality technicians.

By Lucas Deal, Associate Editor

lucasdeal@randallreilly.com

A major key to keeping dealer’s service department running smoothly is quality technicians. When you have quality employees, it helps to have a strong payment structure in place to keep them.

Today there are several ways to compensate heavy-duty service technicians. The two most popular methods are a flat-rate system and an hourly system, and each has advantages that can work in your business.

When choosing the best payment plan for your technicians, it is important to research each method and how you can implement it.

The flat-rate system is rapidly gaining popularity in the industry. The system works by charging customers and paying technicians for an equal amount of hours when providing service. Meaning, if a dealer quotes a fleet two hours to replace two brake shoes, the technician making the repair is then paid two hours in wages to complete the job.

According to Mark Martincic at KEA Advisors, the flat-rate system is a positive influence on technicians because it motivates them to complete work in the time billed on repair invoices.

“The [flat-rate] system is a great way to increase productivity,” he says, “because it allows a service provider to equalize the labor it bills with the labor its technicians provide.”

Under the system, if a technician is paid for two hours of work and completes a job in an hour, he is still paid for two hours. However, if a two-hour job takes three hours, he is only paid for two hours.

Katie Hopkins, executive vice president at Truck Centers, Inc., says her company has been using a flat-rate system to pay its technicians since the 1980s. Hopkins says the benefits speak for themselves.

“I think it motivates [the technicians] to do their work as quickly and effectively as possible,” she says. “It allows them to create their own destiny.”

The hourly system is the most common payment plan in the heavy-duty industry. The system works by compensating technicians a certain wage per hour for the work they do.

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