Pay Plan for Service Manager?

[Victor LaVarnway]

I’m actually interested in this as well. I am looking to open a shop that I will not be able to run daily so I will need to hire a Service/General Manager.

[Unknown Member]

This is something that depends on the size and volume of your shop. In general, all of your non-technician labor should not exceed 10% of sales. That being said, at both of our stores, we pay our managers a % of sales, along with bonuses for hitting 3 to 4 goals on a monthly basis.

[Rick White]

David,

This is a great question and one that you’ll find there are as many different pay plans out there as there are shops. The first thing you need is a specific job description that clearly outlines his duties and responsibilities. That will help you figure out what he has control over. Then, when you’re thinking about his compensation, the simple question that you want to ask yourself is, “What do I want him to achieve in the areas that he can control?”

Simply put, you want to make your goals his goals. Things like gross profit, billed hours, hours per RO, net profit, and parts gross profit are just some of the ideas for a compensation plan.

If you’d like some help with this offline, shoot me an email to rick@180biz.com and I’ll be happy to offer some individual guidance.

I hope this helps,

Rick

[jbrenn77]

I like Rick’s response from above.  We focus mainly on a % of GP $ they sell.  Since they can influence production it doesn’t count toward their pay until the work is completed and RO closed.  Also they have bonuses that change depending on what we are focusing on at the time.

[Chris]

The pay plans that I create are based on sales and Gross Profit. This should be the carrot to dangle out in front of your service advisor. Typically I try to keep the pay plan between 7 & 10% of sales, depending on what type of advisor you have. 10% would be more towards the they are running the shop and you are mostly an absentee owner type of situation.

I am happy to help if you would like to see a sample pay plan or would like me to create one for you. Just email me: chris@autofixsos.com

[David Nix]

Call Me, David

[Brandon]

Also interested in this topic.

I’m currently a shop foreman at a dealer, and am close to accepting an offer as a service manager with another dealer.

My question is what to expect as far as a pay plan goes. Obviously I’m sure it will include some type of GP%, a CSI bonus, some sort of salary, as well as an incentivized objection bonus.

I’m coming from a flat rate and small bonus pay plan. I want to make sure I’m making the right decision for myself and my family from a financial standpoint. Any and all advice and help would be greatly appreciated! Thanks!

[Tom]

Brandon, what we do at our shop with all staff is to create pay plans that are roughly half base and roughly half incentive. For a foreman or manager that would primarily be based on GP. We try to keep the pay plans simple so everyone can figure out their pay in a few seconds. Good luck!

[Rick White]

Brandon,

You’re going to find that almost every shop has a different job description, goals, and expectations for each position. That being said, you want to have a compensation plan with a base that allows you to live and a healthy bonus structure based on criteria that you can measure and control.

I hope this helps!

Rick

[Rob]

Brandon, Both Tom, and Rick responded with great answers. I would reach out to the hiring Dealer and ask to see their Service manager’s pay plan or the plan they have in mind for you. Once you have an idea of what that looks like I would then request to see their current KPIs (YTD) and then ask what are their KPI goals. Also, a good Service Manager does not make progress without the right team so you got know who you are surrounding yourself with. If they are the right shop they will respect and appreciate you doing your due diligence. Good luck.

[Brian Maillet]

Before accepting make sure you understand the pay structure and if you don’t understand don’t accept