Why Price Doesn't Matter: The Truth About Labor Rates

Ron Haugen has owned and operated Westside Auto Pros in Des Moines, Iowa, for 20 years, having grown the operation from a humble, four-bay shop into a 14-bay model of efficiency that has garnered numerous industry and local business accolades. Haugen, an Automotive Management Institute-certified trainer, also works with fellow shop operators on workflow, customer management, and leadership issues as a consultant.

At the 2017 RWMC, Haugen led a session called “Why Price Doesn’t Matter: The Truth About Labor Rates,” which aimed to give attendees a better understanding of the labor rates on which the industry focuses. He explained that small increases in labor rate ($15 per hour) have no impact on a customers decision to agree to a sale, but have a major impact on shop profitability over time. A labor increase of $15 per hour on services other than oil changes and diagnostics can earn your shop more than $43,000 of additional profit each year.

The 2018 Ratchet+Wrench Management Conference will be held Sept. 20–22 at the Westin Lombard near Chicago.