Raise Your Effective Labor Rate

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Effective labor rate (ELR) is the amount that tells you exactly what your shop is making per billed hour, so, the higher the better, right? 

According to the 2019 Ratchet+Wrench Industry Survey respondents, raising it may be as simple as implementing lean strategies. 

Have you incorporated any lean strategies? 

ELR of $90 or more: 57%

ELR between $50-$59: 4% 

ELR Less than $40: 4% 

According to the survey, common lean strategies include:

  • Going paperless 
  • Utilizing tablets 
  • Holding short meetings to assess production  
  • Well organized inventory
  •  Tracking efficiency

For more tips on raising your effective labor rate, head to


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