Numbers: How Pay Plans Effect Efficiency
One of the longest and most contentious debates in the repair industry centers around technician pay. Mainly, which type of pay plan is going to lead to the most successful business. Now “success” can mean many different things. From KPI measurement to fostering a strong culture amongst employees to customer satisfaction.
Isolating for just one factor, efficiency, the 2021 Ratchet+Wrench Industry Survey found there is a clear difference between shops that use flat rate and shops that use anything else.
How do you pay your technicians?
- Flat rate - 25%
- Salary - 9%
- Hourly - 28%
- Hourly plus commission - 20%
- Salary plus commission - 5%
- Other - 13%
Average technician efficiency of shops based on pay plan
% of shops with less than 100 percent efficiency
- Flat rate - 49%
- Salary - 66%
- Hourly - 72%
- Hourly plus commission - 62%