Why Guaranteed Pay Is Not the Answer To The Tech Crisis

Why Guaranteed Pay Is Not the Answer To The Tech Crisis

The secret to success is to incentivize technician productivity, and then empower them to hit their goals.

There’s no denying it: we are in a full-blown technician crisis. With every passing year, the automotive industry falls further behind in adding enough new technicians to replace the ones who are leaving.

The U.S. Department of Labor Statistics projects that the industry needs to increase the rate of new techs by 7 percent through 2024 to keep up! In other words, we were already short thousands of technicians, and the problem only figures to get worse from here.

The trade schools are fully aware. In an interview with Repair Driven News, WyoTech Laramie Campus president Caleb Perriton said, “Our industry is in crisis mode. It’s a lack of technicians. They need help, and they need it yesterday. It’s a full-on crisis, and we have a skills gap that we just aren’t filling right now.”

The question of why so many techs are leaving is a critical one, and one worth digging into, but the subject for another article.

Instead, I’m focused on the other end of the equation. Namely, how we can attract new technicians, and more specifically, how we can create an environment where technicians can earn a paycheck that matches their commitment, education, investment in tools, and professionalism.

In other words, top technicians deserve the opportunity to make upwards of $100,000. How can we put technicians in charge of their paycheck so they can make what they deserve?

Some clarification is in order, of course.

When I say that technicians need to make what they deserve, I’m not proposing increasing pay for no increase in productivity, which would cause problems on every level.

First, the shop would need to charge more for no additional benefit to customers. The additional labor rate wouldn’t allow the shop to provide better warranties, or hire more staff, or improve the waiting area – it would go straight to payroll.

Second, paying more for the same work is a surefire way to see productivity decrease, as the employee realizes they don’t have to work as hard to reach their compensation comfort level.

Which means that, third, when the shop’s efficiency drops as a result, the shops’ gross profit will necessarily drop – and along with it, the shop’s sustainability and the owner’s paycheck.

The secret to success – and the only outcome that helps customers, owners, the shop and the techs all get what they want and deserve – is to incentivize technician productivity, and then empower them to hit their goals by maximizing the shop’s efficiency.

Why incentive pay plans should not be undertaken lightly.

Benchmarks for pay plans must make the employee stretch without being unattainable. They must be balanced and synchronized so the whole team is working together to reach their goals. They need to avoid disincentives that encourage employees to decrease productivity…and have to be sustainable so that the employees don’t end up holding the shop hostage.

Which means that pay plans are best built by professionals with a successful track record, not something to take a stab at.

But when properly constructed, they are the first critical step in allowing a technician to control their paycheck by doing the things your shop needs most: complete inspections, thorough writeups, efficient repairs, and team®work.

Of course, incentivizing a tech to increase their productivity but doing nothing to improve their efficiency is a losing combination. If the wrenches aren’t turning, nobody’s earning!

That’s because technicians are often stuck doing the busiest of busy work instead of the things that make them and the shop money. If they’re constantly juggling labor guide logins, access to diagnostic software, hunting for communication from Service Advisors, waiting for scanners, lifts and more, then they’re losing time that they could be spending billing hours for your shop.

Putting techs in charge of their paycheck, in other words, means allowing them to make their productivity – and thus your profitability and their paycheck – their highest priority by choosing shop management tools that remove production bottlenecks and leaks.

Some Of It Falls On The Shop

Maximizing your production pipeline can often lead to exposing problems further upstream. If the shop can more efficiently inspect, writeup, advise and repair vehicles, but the shop can’t pay the vendor because the shop isn’t charging enough for parts, the growth from efficiency is unsustainable.

Which means that a critical part of making sure that the technician can earn the paycheck they deserve is that the shop is on a sustainable enough path that the technician can continue to earn what they deserve.

If your shop management system doesn’t include real-time metrics that allow you to hold your team accountable to critical shop benchmarks each morning, consider adding a shop benchmark tool like RPM ToolKit® to your ecosystem. Being able to see how your shop is performing every day – and see how the changes you make are positively impacting the shop’s profitability and growth – is critical for creating sustainable growth.

Don’t Miss On Marketing

Finally, when your shop maximizes efficiency, incentivizes technicians, and empowers them to increase their productivity, the shop needs to have marketing in place to drive more quality customers to the shop.

This has to be about much more than finding warm bodies to fill your bays. When technicians do thorough inspections, and then service advisors do complete advisements, the type of customer you drive with your marketing has to be one who is loyal and trusting enough to approve those recommendations, or you’ll create disincentives.

Which means that the marketing company you choose for your shop has to understand quality customers, where they live, what makes them respond, and how to create relationships with them so that they trust you before they ever walk through your front door.

A quick and easy check on how well your marketing company is doing today at driving quality customers is to compare the average repair order of your new customers vs existing customers. Are you constantly improving your customer base? If not, then your techs may never have the vehicles in their bays that they need in order to grow their paycheck.

Create The Culture Of Success

If your shop is able to do these things, it’s possible for all of the parties involved to win. In my shop, every technician makes six figures, and has for years, because they’re incentivized and empowered to, and the shop’s success is sustainable.

Which means that while there are a lot of potential pitfalls – including some that have the potential of destroying your shop – it is worth finding an expert to help you go through this process. It empowers technicians to grow to the compensation they deserve, while helping the shop to grow to the level it also deserves.

It’s the secret to creating a culture of success where everyone involved – the owner, the shop, the customer and especially the tech – can succeed!

David Rogers is the president of Auto Profit Masters and Shop4D, the industry’s first and most complete all-in-one shop-management system that allows each component – from the point of sale to labor guides, inspections, marketing, estimating, parts ordering and even shop management – to talk to one another, improving efficiency, helping techs bill more hours, and saving money. Learn more and register for a free webinar at shop4d.com. Reach David via email at [email protected] or toll-free at 866-826-7911.

Photo by Alexander Schimmeck on Unsplash

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