When I’m asked to work with a shop to improve their numbers the first thing I will often do is ask a shop owner what their goal is. Many times the goal is related to making  more money, or creating a higher gross profit. Sometimes this profit goal translates into “I want my people to make more money along with me”. If everyone wants to make more money there is only one thing to do in my mind…increase productivity.

Think about it. An auto repair shop has one primary product. Time. You may sell parts, accessories, tires, or any number of other things, but your primary product is time. This is why you have that labor rate posted the wall! If you want to make more money, you have to sell more time. Great, you say, but there’s only so much time in a day, week, or month. True, however I would ask “are you selling as much time as you have available”? The answer to this is often a resounding ‘no’. There could be multiple reasons for this. For this post let’s just focus on technician productivity.

I know this is a source of contention, but here me out. Many shops tell me they are happy with technicians giving them 85 to 90 percent productivity during the week. Think about what this means. I show up for work at your shop and you pay me for 40 hours worth of work, while I give you in return 34 hours worth of billable hours. This suggests that there is a little more than an hour each day where you are paying me, but I’m not producing for you. At the end of the week instead of billing $3200 in labor you’ve billed $2700 in labor (assuming $80 an hour posted labor rate). Multiply that difference by each technician and you can be losing thousands of dollars in potential each month.

So what do you do about your productivity? At the very least post each technician’s daily productivity where they can see it. Post it big, colorful, and in graphic form if you want. The nature of human competition will eventually take over and they’ll begin increasing productivity on their own.

What else can you do? Change their pay plan. Create an incentivized pay plan that allows them to reap weekly rewards for increasing their productivity. Remember, technicians often think “here and now”. Monthly productivity rewards don’t mean the same thing to a technician that it might to a service advisor, manager or shop owner.

I’m guessing there’s room in your productivity numbers! Increasing productivity means more labor sales, parts sales, and overall increased revenue. This means that everyone working at the shop should benefit financially.

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