Callahan: How to Afford a $100K Technician

April 30, 2024
Finding the money to pay a top-performing auto tech $100,000 may be easier than you think.

We constantly hear about the industry's technician shortage, and many minds are working toward finding a solution. This is about another challenge we face—once we have good technicians, how do we keep them? I believe there are two main ways: shop culture and competitive pay. 

Shop culture begins with the owner. Gone are the days of carrying a big stick and leading through the "my way or the highway" technique. Today, most successful operators realize that a positive culture creates better attitudes and more productivity and profit. We used to live by the Golden Rule: Treat others how you want to be treated. Today, we realize the Platinum Rule is better: Treat others how they want to be treated. This is critical for future success, and I'll dive into this deeper in a future column (stay tuned!).  

It's challenging to have a low-stress culture if you're worried about money and how you'll pay to keep that great staff. Buckle up, grab your calculator, and let's get into some numbers. It's not as scary as you may think. 

It seems every technician wants to make $100,000 a year now. I don't think that is unreasonable, provided they can produce enough work to earn it, and you're charging the right amount to pay it. 

To get a tech to $104,000, let's see what that would look like: 

Christine is asking for $2,000 per week and can bill at least 40 hours a week with 100% productivity. Yay! Her loaded cost would be $2,800 ($2,000 x 1.4) if your effective labor rate is $100. Once she produces 28 hours of labor, she's paid for, and the remaining labor dollars, $1,200, are yours. That's $62,400 annually. 

You've read about my insistence that a coach is critical for growing your business. Let's say they teach you how to implement processes that increase your ELR to $150. Christine is now profitable after 18.7 hours, and you earn $3,195 weekly and add $166,140 to your annual bottom line. 

You can afford to pay a technician well and still pay yourself. When everyone is financially secure, stress decreases, morale improves, and productivity improves. Getting coached taught me how to implement the necessary processes in my shop that took my ELR from occasionally hitting $100 in 2020 to consistently being over $150 in 2023. I'm sometimes a slow learner and implementer, but you don't have to be. With the proper guidance, you could improve your bottom line, beginning with your next repair order. Please feel free to reach out to me and ask questions.  

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