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Is Flat Rate Pay the Problem?

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Is Flat Rate Pay the Problem?
A technician’s perspective on pay and the tech shortage.

I am not going to suggest in this article that I have all the answers to the technician shortage or pay problems. I will, however, give you my opinion on some of the issues that I see as contributing factors. And I will get controversial, with the purpose of getting all of us to seriously look at our industry and prepare for our future.

A few months ago, my manager called me and asked if I wanted to sit in on an interview he had scheduled with a dealer technician. While we were not actively looking to hire at that time, we’re always looking to expand our network and fill our employee pipeline. Plus, my manager had a feeling this tech had the qualifications we look for.

My manager and I met the dealer technician after work in my office. I started the conversation with a few questions and asked him to tell me about his career. The dealer tech (we’ll call him DT) spoke at length about the different companies he worked for throughout the years, and his early years working for an independent foreign car shop. He was upbeat and spoke with confidence, but I could tell he was holding back. He highlighted his career as filled with hard work and dedication, but mixed with turmoil.

After a series of questions, I asked DT, “You’ve been with this dealership for years. Why are you looking to make a move?” DT sat back in his chair, took a moment, and said, “Well, I’m 48 years old and have played this flat rate game way too long. It’s nice when one week you make a ton of money, but then the next week you go home with nothing. Come each Monday, I have no guarantee. Each day I worry and put in long hours to make sure I have enough booked hours to earn a decent paycheck.”

I paused a moment, and then followed up with, “Is there any other reason why you want to make a move at this time in your life?” DT took a long breath and replied, “Please don’t take this the wrong way, but neither the manager nor the owner show any appreciation. I work hard—very hard. And as a senior tech, I look after and teach the younger guys. But, it’s never enough. Is it so hard for the boss to walk over and say, ‘good job’ once in a while? And we wonder why young people don’t want to become technicians?”

DT is not the only technician that I have met with the same issues of pay and lack of appreciation. Keep in mind, DT’s perspective is his reality. Money is not the final decision maker in anyone’s life, but when you combine a pay method that can be interpreted as one-sided with a lack of appreciation from leadership, you eventually drive people away. After all, people don’t leave businesses, they leave the people they work for.

There are many ways to pay technicians, and I don’t want to debate the pros and cons of flat rate, or any other pay method. Tech production is how we generate labor profit, but technician production is not just the responsibility of the tech. It’s everyone’s responsibility. I believe in paying employees a decent, competitive base wage, with the opportunity to earn more by attaining certain performance levels. Is my pay method the only way? Of course not.

I promised I would get controversial, so let me continue. For many technicians, they don’t earn what they deserve. The reasons are many, but here’s one fact you can’t refute: When a company increases its revenue through increased production and sales, tech wages go up. And, it would increase the income of the business owner. This takes a team effort, but it starts with leadership.

As a fellow shop owner, I know what you go through dealing with all the issues of running a business. And I also know that appreciation goes both ways. But the truth is, you are the leader of your company. It’s up to you to maintain a healthy work environment, ensure the success of your company and to work on all the things that will help to secure your future and the future of your employees.

To attract people to our industry, we need to offer great pay plans, training opportunities, career paths and, most importantly, a shop environment where people are shown appreciation for a job well done. This will take strong leadership and a strong bottom line.

During my team meeting last week, it was brought up that it’s time to hire another technician. I think I’ll give DT a call and see if he’s still available.

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