Not enough production/efficiency from current group.
I believe the question I should be asking is how should I structure a pay plan that would work well for both my employees and my shop? Right now we have 3 technicians (on flat salary) and myself (also on salary) with my father working throughout the day to pick up slack I have run the numbers on efficiency and we’re at roughly 28% on “good” weeks. Our gross profit on labor is -7.5% also on one of these “good” weeks. Our car count is around 135-150/month with a ticket avg of around $200 – $215. I believe we are doing a pretty good job looking vehicles over, but since everyone is salary I have to constantly be asking my techs to look for more work to sell. Without a major increase in either ticket average or car count I don’t see how we have enough work here for more than 1-2 techs. My main obstacle is that I don’t get to call the shots but since that may change in the foreseeable future I want to have a pay plan worked out so that I can make this transition. What I gather from the discussions on here is that a flat rate plus a commission when either production/eff. exceeds a set goal is what many shop owners seem to like. I’ve read on here $10-15 per hour based on experience and abilities but we’re here 50-55 hrs/week so wouldn’t that involve quite a bit of overtime every week or would I just have to overlap my techs so they work 40-45 hrs/week? I’m sure there is a lot to work over in this post and there are several other issues that if I could address I would but I feel like this is the core problem since our labor deficit eats up profit from parts sales.
Some facts about our shop that might be relevant to production and would probably affect advice you might have for me.
3 bays (with room for a fourth)
General maintenance, tires, as well as motor and trans swaps infrequently
Techs have been with us for 12-20 years
We don’t have a shop management system (we use alldata, identifix, and Real time for labor guide)
Our hourly rate is 60/hr and has been for 9-10 yrs
No advertizing budget other than craigslist