I just went from flat rate to hourly and it’s so nice. Now when writers don’t want to charge diag it only hurts the company, when I have to do a 2 hour job for .2 pay it only hurts the company, when the parts department forgets to order parts 3 times it only hurts the company. Hourly pay shows how poorly shops are ran.
Wow, so much out of context. First, I work 45 hours a week at the shop, I do not work after 5:30, other than filming these videos, I am out the door at close. I have worked at hourly shops, and yes people got sent home. I have also seen the result of techs being paid hourly and the loss of production that almost always comes with it. As far as training, we promote it at the shop I work at, I have trained several techs from basic lof techs to full shop foreman, 2 to be exact, both can now diagnose everything from network issues to electrical shorts etc and have trained many in between. Fyi, I say often the pay method doesn't matter what matters at the end of the week is what your pay check says. So your grand plan to is to put the burden of ownership, aka, bonus program tied to your P&L on your employees with I am guessing a very small carrot at the end of that rope they can't reach? lol I am being sarcastic, but most ESOs that do that sort of plan rarely does it work, nor do the employees benefit from it, more so because they think putting that burden on their employees will result is some magic that will fix their P&L
I definitely agree with so much of this! And I agree with much of your original video. One of the big things David and I have both had to learn is that many shops aren't doing things the way the shops in our circles (or our shops for that matter are doing things) And that can be tough to see and stomach at times. One of the key points you'll see in the comments is that one of the key underlying points is its NOT the pay plans - its the people. You work for or with scumbags....your going to have a bad time. You work with people who are genuinely invested in the best interest of others, and understand that to achieve greatness it takes a team....a family? You'll have an amazing experience. As for dangling the carrot - flat rate dangles a carrot much like the other plans. My concern with flat rate is we talked to hundreds of techs who WEREN'T paid a guarantee or given PTO/Vacation. They didn't have any benefits and the minute their performance declined they were dumped on the street. The guys on the diag lane take a particularly hard hit as many advisors are afraid to properly charge for testing or issues with vehicles beyond the scope of normal repairs . In fact - while David removed it - I mentioned my biggest gripe was that front of house was charging to fix 100k cars like they were 20k cars - the hours weren't accurate. I truly believe that if an employee works 40 hours, he should be paid 40 hours. In my shop we have a plan that makes sure they have a great living wage and that goes up based on production. This plan gives the employees the maximum amounts possible based on industry standards and in some cases goes over those industry standards just in an effort to make sure our people are ok. They get paid time off, if they get sent home because we're slow - they get paid (hasn't happened yet), if they need to go do something, they aren't taking a time hit. I truly believe in taking care of my people - I would NEVER nickle and dime their wages. That being said - I recognize there are owners who aren't looking at an employees best interest..... And many of those aren't being mindful of overtime laws, minimum wage and the education of those who work for them - I see those folks as a true detriment to our industry. I personally feel that over the next few years, we'll see labor law changes which force those using flat rate to reconsider how to pay their people. I give you my word - I've heard way more horror stories than I have positives on flat rate - but I do take your perspective into account. From where I sit? I truly believe as a trade...an industry or profession we are horribly under valued. And we, as professionals have allowed this. We wouldn't even be having this conversation if shops charged appropriately to ensure profitability... To ensure their people were paid... I hear it day in and day out - its bad owners! I've got to be real with you...the majority of what I've seen? It's owners who A) have no business running a business or B) are completely clueless. I honestly believe most people, deep down, are good people.
Oh....and I'm not asking my employees to fix my P&L...thats my job.... I'm going to take a check as an owner, pay all the employees well and give them the fruit of their labors. Burden of ownership? Nah man...we're an extreme ownership shop.... that burden is solely mine. Have you ever been an owner?
Best point made was on flat rate you limit what you learn. I averaged 76hrs a week at the dealer and was making 100k a year but didn’t learn or gain hardly any knowledge during that time because I was solely focused on turning hrs.
I'm in the dealership shop world as a technician and flat rate labor times are being reduced for jobs. It's been happening for a while now. Warranty labor times are crazy low. Technicians are having to fix more cars to make same pay because labor times are being cut.
It honestly all seems very shady. A job should pay the same time regardless of who is paying, warranty or the customer. It should be illegal to charge different rates depending on who us paying. Yet it happens everywhere, go to the dentist, one price if you pay out of pocket, another if you have insurance. Same job, should be same cost. Its all very unfair to consumers, and people are so wary for good reason of going to the garage. As an small independent shop, I see so many people come in after getting huge inflated estimates. Explain to people what needs to be done right away for safety reasons, and what may be able to wait till the next oil change. Dealerships especially, don’t seem to differentiate between a millionaire and someone who doesn’t have money for groceries. Dealerships also don’t seem to care at all about throwing parts at a job. We are going to change this part but we might have to change that part, blah blah, no care about the cost. A friend spend $4000 on an E450 before the dealer found the less than $100 fix. Luckily as they were about change the PCM next. Bills these days can get really high on routine jobs. Had an old lady in her 80s come in, dealer wanted 3 grand to fix her exhaust, I had it out for 500 or less. Good grief, cars like a 1998 with 60,000 km, its a weekly at most grocery getter, she doesn’t need to drop $3000 in it. My dad’s previous Corolla he took to the dealer for every scheduled service, by the book. I have maintained his latest one, saved him $1000s. People need to be aware of whats going on, find someone they trust and stick with them. Otherwise they could be getting overcharged, and oversold jobs left and right. The automotive repair industry has a very shady reputation and unfortunately very well deserved. Flat rate being a major part of it that should be abolished.
Technically if you are flat rate tech, it is illegal to force a tech to do anything else besides working on cars. If you make them clean the shop, take cars to wash etc...you must pay them for it otherwise this is wage theft.
@@BrokeMekanic Blacklisting is also illegal. If they are caught its actually a criminal offense under RICO laws. Also I am no longer a Flat Rate tech...I am done getting scammed.
Your right 100 percent working hourly and working flat rate being on flat rate I felt pressured put more then 40 hours in and trying to find short cuts that horrible hourly takes stress off
I do realize a dealership technician is most likely working on the same brand a lot and yes they are familiar and yes they are fast and they're probably efficient however it does make it a whole lot more difficult to make hours when your labor time for the job is being cut. Especially if the person cutting that labor time does not take into consideration the diagnosis time the sheer amount of stuff you need to pull off to change that part etc
This whole ‘flat rate is evil’ debate is a deflection for the real problem. Most shop owners are crap business owners. A poorly run shop is going to make any pay plan (possible exception being straight salary) look bad. Flat rate is the scape goat because it’s the predominant plan. If a shop is run well, then it has sufficient car count to keep techs fed - because it has an effective marketing plan. It has advisors who can educate vehicle owners about their needs and help them understand the value in service and repair - again keeping techs fed. If the shop owner is engaged and competent then this concerns aren’t valid. As for those that say flat rate creates corner cutters or forces techs to be dishonest - that’s BS. That’s a personal ethics issue. Ultimately though, that is also the owners fault for hiring low moral compass individuals. ‘But techs have to cut corners and beat the time if they are going to make a living on flat rate!’ BS. Pay them well enough that 1 hour of labor produced per 1 hour of labor works earns them enough live out their goals. Charge enough to be able to pay them that well. Train your office team enough and provide enough value in quality, warranty, services added to justify the higher prices needed to provide well for your team. ALL OF THIS COMES BACK TO CRAPPY OWNERS. I know - I was a crappy owner for a long time and there are still some days when I am, but I realize the difficulties in our industry aren’t pay plans or ‘kids these days being weak’ or whatever other excuse people put out. The problem is us - the bosses.
The problem sir.... The problem? Well the problem is you're way toooooooo smart for your own good and hit the nail on the head! 💯 .....couldn't even add to your comment with a reply 🤣
@@DavidRomanKC and that comes back to ethical fortitude. Employ good human beings and pay them well so they don’t have to feel pressured to scrounge for Pennie’s.
Take that gross check amount for that pay period divide it by the hours you ACTUALLY put on the clock and that's your TRUE hourly PAY. Either way you cut it, you'll see that one system requires more BS to accomplish that amount you wish to be paid/hour. There are some who do make alot on flat rate, key word gentlemen "some" and it's about who you know and who you blow 9 out of 10! However, let us not forget about those variables such as those benefits or lack thereof, economic times (slow periods), possible weekend work to accomplish those numbers before pay day, warranty work that isn't handled correctly, parts delays, cheap parts to increase those margins, not billing for extra time correctly, not billing for diagnostics correctly, the so-called "quick" inspection without billed labor, and the weather conditions which can dramatically increase time on car when comparing it to "book time" depending on the location and conditions of the average vehicle being worked on. Shall I continue? The list of indirect labor time is astonishing and book time is not going to factor any of this. Overall, the choice is up to the technician, what do you want? Try both systems and see how you do and compare your ACTUAL time put in to that paycheck...one will realize real quick what system is best for you 😉...I personally, would never work flat rate again without a salary guarantee and if I could somehow convince them (the shop) that I'm only capable of nuts and bolts straaaaaaaight straight gravy train all day after 21 years of experience! That's my opinion and I am grateful for my hourly rate at the GM Dealership 🙏...best experience I have had doing what I am always given despite the place I work.
I get paid hourly, body shop in a small ass town. I’m fortunate enough to get 40 hours regardless if we work 40 hours or not, and I still get overtime. Point I’m trying to make is privately owned body shops need workers too. Main aspect I like about it is that everyone I work with is super respectful and just good people to work with.
I worked for GMC and my manager said I wouldn't have to worry about hours as long as I make hours. I was making ,at 1st, 30-48 a week. Then they started a service advisory "team" based system. I then went to 8-23 a week. I was giving all electrical work and all my camshaft jobs where being then away from me w/o me knowing and handed off the the managers "pet" (A tech who followed the SM to 3 other shops) and or the next guy on line. I then had conflicts with the SM and stated my defense and he was more interested in conflicts between me and the advisory and the bottom line and that was hours.. Sorry boss can't make hours when my "team advisor " is getting the least amount of traffic and I'm the only one at the dealership that can diagnose CORRECTLY... but hey life sucks and you keep bouning until you tap out and go to a different line of work.
I loved flat rate, i was very productive when i was at the dealership because most repairs are repetitive so obviously you get better and better, less tools to buy, only one brand to worry about and one brand to learn. The positive i got from it is the process of a diagnostic from start to finish, i developed good habits such as getting a good night , drink less and get up early in the morning at 450 am to get my workout done and be ready for work with breakfast in my stomach and full of energy. My checks got better from doing all this so saw it as a sport. However working for an independent shop is not the same. I mean i still make between 55-65 hours a week working 40 hours. We dont work weekends, i get to do 90 hours a week when we have a good week, of course with a helper. I used to work 50 to 60 hours at the dealership and after doing since 2004 it just gets tiring, i felt like a hampster running on that spinning wheel. I work salary now, i have more responsabilities since i do most diagnostics but at least they are paying me well enough so i dont have to worry about the money. All i have to worry is about get the job done right and make customers happy. Im not about flat rate anymore, i still kept my good habits though. Lol.
I been a dealer tech for over 20 years always been paid flat rate I couldn’t work hourly. But seeing the new hires work ethics coming into the dealerships now they would never survive at flat rate. Maybe some would excel at it but most would not. Mainly because dealerships do not take the time to train anyone they just throw them in and hope for the best. Keep up the good work Lucas and David!
Moonlighting is not an issue. Work your people and pay them very well and they won't moonlight. let me Ask this question ,what gives the shop owner the right to dictate what people do when they're not On the clock?
Flat rate is great for parts changers/dealership techs where diagnostic testing isn’t needed. The base issue is you can cut engine book time in half, but your not going to cut diagnostic time in half. With the shortage of diagnostic techs, more and more diagnostic work falls on one person in the shop while an army of parts changers are shouting the praises of the flat rate system. Flat rate rewards low skilled techs and heavily punishes pure diagnosticians. Tickets are distributed based on skill set, so the gravy goes to the low skilled and all the intermittents, multi issue, been to 5 shops, low flagging work gets rammed down the highest skilled techs throat and destroys his paycheck. Best case scenario, which is extremely rare, is for a diagnostic tech to just flag for the time he spent testing. All while a career parts changer cuts book time in half and runs over 150%+ efficiency quite easily.
Flat rate with a X amount of hours garantee feels like the best way to be paid from my perspective. You have that base "hourly" rate that is your garantee, but you can blow that out of the water if you hustle and stay busy. The short cuts issue should be handled by the shop foreman and unethical techs get cut. They end up in the hack shop they belong in.
So a 40 hour guarantee that increases as hours increase is how I've been doing it. It's what you would call a hybrid. You're rewarded for the work you accomplish, but your guaranteed 40 at a good wage. That way if the shops slow, or we go to training everyone know the number. I'm working on profit sharing so hack work, warranty or comeback work and waste is discouraged because it effect everyone's bottom line. I want to do it right, so I'm not rushing it.
Moonlighting is nobody's business, when a shop owner has an issue with it then he is getting out of his lane. What a tech does after work is their business. A shop owner owes nothing but the agreed upon deal with the employee and the labor laws, the employee owes nothing to the company but the agreed upon deal with the company.
@@ChangingTheIndustry not if it isn't in writing, and that isn't reasonable anyway. If your stealing customers that walk in the door I would understand, but if they never walk in the door and go straight to to tech after work in the first place then it's nobody's business.
We don't know him, but we're always glad to have him on! I may share some of the challenges and ideas I have about a profit sharing plan and the process of working through it at some point.
Hybrid is the way to go - I believe compensation plan structures should be evaluated annually and the hybrid plan makes it easy to apply minor tweaks where employees can manage there expectations/budgets and employers can take care of their people. Employers who flip from hourly to flat rate or reversely unintentionally create an emotional disruption in their which often impacts production. I believe hybrid strategies also allows for employee development in business because it creates more insight into what the business owner is trying to achieve, simple compensation plans limit employee development and if you aren't developing your people eventually they will leave you. Once employees can understand what shop owner are truly dealing with I think they should have the opportunity to partner with their employer to create their compensation plan, it creates more buy in.
@@KipNuesch thanks brother!!!! You make a very important point - emotional impact. You'll see in another comment I made that I brought up my concerns on this issue. We treat pay plans as shop owners very willey nilly - this is someone's livelihood. You also nailed it on the head - why we've not switched out plan yet - I can easily make minor tweaks and the production component is SOLELY them affecting it. Much like flat rate. I want to be 100% prepared and ready when I make a change.
So the idea that a flat rate tech is cutting corners in order to meet a certain efficiency level is assuming the technician can't possibly be good enough to accomplish making 60 to 70 hours without cutting corners. This argument I feel will never end because the bottom line, in my opinion, is that there are some techs that are simply very efficient. They're very efficient not because they slap things together and use Identifix to diagnose everything. But because some of them are naturally talented. It comes easy to them. Every aspect of the job is mostly easy. The diagnosing and the repair. Point being that flat rate is neither better or worse. It all depends on how the shop owner wants to run his or her business. And what talents the tech brings to the table. I personally wouldn't want to be paid a salary. I like being able to feel a sense of autonomy within my work place. Not because I have anything against the shop owner. Or because I don't get along with the guys. Or because I don't like to help other techs. Or don't like to clean. I would take the car through a car wash. I often inspect the car before I park it for any finger prints, smudges or anything that looks not clean anywhere near the area I worked on. I have Windex and micro fiber towels next to my box. And not because i often leave fingerprints or anything of the sort. But because I just dont take the chance. I do a once over and make sure it's clean. And for some cars I use a plastic wrap that protects the paint while in repair. And we have a car wash in the same parking lot as us. But I'm also flat rate. And I almost always come in at about half or less from the book time. Just did a 25 hour engine swap on a BMW that was done in one day. It just comes easy to me. It's not even like I feel I'm special. It really is that it's something that comes natural to me. And I know I'm not the only one. I've learned a lot from techs that are better than me. And I continue to learn daily. I also don't work long days. I'm in at 7. And dome at 4. I don't have to work long days because I'm efficient. In terms of diagnosing it's essentially the same thing. Sometimes you get vehicles that are real head scratchers. But a majority of them are typical. Again this doesn't mean I disagree with salary. If it works for you and your shop. Great. But I think flat rate simply works better for certain techs. I work with a tech who sort of demoted himself to lube tech/tech. He doesn't like the stress. He doesn't like the feeling that you're on a time limit. And that's ok. The shop accommodates him. He works 4 day weeks. And basically takes the overflow. And no one expects him to get done quickly. It's a mutual understanding. Now does he make what I make. No. But he's ok with that too. I don't feel flat rate techs should be doing anything other than working on cars. That tech is flat rate. They make nothing if they're not diagnosing and or repairing. How can argue that? And a flat rate tech who is actually really good will see time as the coefficient of his paycheck. We are efficient because we understand time management. So the feeling you get when you're flat rate and get pulled off a job to run a car through a car wash is that you're losing money. Which again, if you want a no questions asked response, then you have to pay a comparable salary. Now I will also express that I've never seen a salary that would match what high efficiency tech on flat rate makes. But I'm sure it exists. Specially if the shops whole businesses model takes into account that they pay salary. If you want your techs to do whatever it is needs to get done. Then they should be on salary. Although I'm not sure you would make as much if you're techs are often tied up doing other things. It seems to me that wether or not a tech is flat rate or not that tech should be working on cars or diagnosing them. Isn't that what your in the business of doing? I understand that there are a ton of other things that have to get done. But that's usually what you hire hourly employees for. At our shop we have 2 to 3 front desk people. As well as the shop manager. At any given time if there's a part that has to be picked up. Or a car that needs to be driven. They can do that. They like to keep us in the shop diagging and repairing. So in this case the business model is to keep us techs busy being techs. But that's what works for our owner and I. We do have a foreman who's salary. But he is there for overflow and overseeing the back of the house. So he's not there to turn hours. But I know he also doesn't make as much as I do. He doesn't need to. He's ok making less. Again it's that understanding.
We have Hourly technicians. Well, they're not really technicians; they're more like parts hangers. But when we're slow, they're the 1st ones to leave because of employee costs.
Best thing I ever did was quit working at the flat rate dealer and went to a hourly electric and gas utility company. Union backed retirement ect... and more than tripled my income
I make great money on flat rate and always do an honest job. I just work very hard and efficiently that’s all. I don’t take tea breaks or play on my mobile phone all day long!
I've been sent home lots of days at hourly shops because theres not enough work booked. And in the summer season when I'd rather be fishing I will volunteer to leave early or stay home during slack times. It's a very real reality that lots of shops in January and February when the Jones are maxed out on Christmas credit aren't coming in for anything. Its just another layer to why so many shops aren't run properly. Flat rate guys go home instead of sitting waiting and they're punished and reprimanded for it. Hourly guys get the same treatment whenever wages come up. Its the first thing they're reminded well if you were here more you'd get paid more. The price of morale cannot be calculated by the employer as accurately as it can the employee. I may go home when it's dead as a way to preserve employment. Because staying might really sour my attitude. That's the variable that many dont remember
I keep telling you to come on down. Fish from the shop. Get paid when you get sent home. The whole 9 yards. I'll go hungry WAAAAAY before I let my guys go hungry.
@@lucas-changingtheindustrypcast I know my brother. That's why you're a unicorn within the industry. 1 in a million actually has your attitude. The rest not so much sadly
At the dealers I have worked at it’s about cut corners example starter takes 3 bolts and one is difficult to get in , will many units only hv 2 bolts , sensor bad , don’t remove just lay the new one over and zip tie to original harness just cut the ends etc etc , and then there is the flat rate variance chart if not 90%or better your history
Only thing close to flat rate for me was the first shop I started at in 2003. My first 2 or so years was hourly. Then I went to a salary plus 35 percent of the labor I produced. Worked there for a little over 8 years. Unfortunately the owner had some personal problems then I moved on. Other than that vowed to myself that I will never work flat rate. Why, cause I feel i wouldn’t learn or progress knowledge wise nearly as much. Also hold myself and the level of work I do to a high standard. Everything that I pull into the bay has my and the shops name on it. Not to mention I despise comebacks. Attend every training class possible and home school a lot. Can still make good money working hourly at a good shop. Last year I made 111k. Average 43 hours a week. It’s no doctors or lawyers pay but it does pay my bills. I do side jobs at my house that definitely puts me above the pay on the books.
There are advantages and disadvantages either way. I have been in this Business 31 years and spent the 14 years in the dealer. Dealership you can do great on flat rate it’s usually one product line and a stocked Parts department. From my experience places that want to pay only flat rate don’t mind wasting your time , Or over stuffing a shop. A place that will offer a guarantee with bonus in my eyes believes more in their business and says to me I’m going to make it happen.
I like the new hybrid systems I've been seeing. You have a guarantee, and anything above 100% efficiency has an 3-6 dollar plus incentive. I am hourly with incentives on efficiency. Some pay periods I flag 80-100 hours and then I get screwed on warranty for a pay period and work 80 hours but flag 65. It happens. A big part of this whole topic is to find a good employer and what works best for you as a technician.
At 6:20 FRM says "If you're an hourly technician you get sent home". Sad to say but it isn't BS. Now it might not be true in every shop, but I lived through that kind of thing early on in my career. I remember the shop foreman "Roy S." walking over and telling me "Slow down you're going to work yourself right out of here today", and he was right. While I was hourly, I would quite often have ten to twelve hours production in by 2~3 o'clock and if there were no more cars coming in that day, I would be sent home.
You're exactly right! And we both recognize there's tons of shops that use hourly as an advantage solely to them. In our facilities, folks are never punished in that way. For instance, we've had some snow storms recently, everyone got their normal paycheck, even when they were sitting at home. Our hope is to bring awareness to the topic and help educate owners to not only charge appropriately but pay fairly.
I am a tech of 25 years and have been paid on both pay scales. I will preface and say that I am scheduled for 40 hours a week and do not work more than 40 "family first". I have been flat rate for a long time now, I am physically on site 32-40 hours and always I repeat always turn 50-55 hours. I make much better money and have much more freedom on flat rate. For example if I come in and am able to turn out 12-16 hours in 6 hours I wrap it up and I go home to attend to my farm with no hassle from the owners. I am a go getter and by no means do I want to sit at an empty shop and stare at the walls to make my paycheck, I want to come in bust it out and go home. From my personal experience hourly pay encourages laziness, Flat rate provides me in excess of 25k more per year than any hourly position I have ever had. At the end of the day you have to want it and then go get it. I do not cut corners and pride myself on everything being just as perfect as possible. I also have no problem doing oil changes etc that alot of techs think they are above. They also provide me with ample work space for my abilities 3 lifts and two flats. Efficiency is key gentleman.
After 20 years of been a mechanic (technician same crap) im a auto detailer im out of flat cheap rate system , i use to be blind , is the only field i know, bla,bla,bla ,never going back , no rush , no broken bolt etc... ✌
"If you work for me, we're gonna do what needs to be done" - Ok, I'm gonna put it to you like this: If you tell all your top techs that every car gets a wash, and they have to do it - and you're paying hourly so it doesn't matter - we know that's bullshit. Because when a tech wants a raise you're going to say "well I can only pay you X, if you made me more money I could pay you more derpity derp derp ..." Ok well I would, but I'm too busy being your wash boy. It's not that the work is beneath them either. It's because you're wasting their time on menial tasks. Time is money.
Who said anyone told their top techs that? Let me ask you, if an applicant came to you and said "I aint doin that (regardless of what that was)! You pay me to work on cars".... How would you respond? The task isn't even remotely relevant....the attitude is.
@@lucas-changingtheindustrypcast "It's the extended test drives, the inspections, DRIVING THE CAR THROUGH THE CAR WASH" ... Part of a comment FRM read at about 0:12 in defense of hourly - which by the way, I'm not at all opposed to. If an applicant came to me with a shitty attitude and said "I ain't doin that, you pay me to work on cars" they wouldn't be working for me. You can set standards like - wire harnesses won't be left dangling with no clips reinstalled as part of the job whether its flat rate or not. You're going to have to pay more per hour OR flat rate in order to get the same tech to follow those standards. But you can charge more, because you're a better shop. There is a breaking point to that though. The economic reality is - that if you're underutilizing your techs by having them perform menial tasks instead of work that's being paid at a high rate, you can't afford to pay them what they're worth. Businesses exist to make money. Techs go to work to make money. Customers pay according to value. In an area where shops charge between 100 - 150 / hour, and techs are paid 30 - 50 / hr , (taking this to an extreme to illustrate the economics) I'm going to charge the top rate - 150 / hour (and pay techs 50), but I expect my techs to do a 1 hour full detail job on every car they do. That money has to come from somewhere. If you're making money doing it that way, another shop is going to open up next door to you, they're going to charge less, and all your best techs are going to go work there. Now you're out of business because you had tier 2 techs being paid tier 1 wages, and they're washing cars all day. OR you have to take it out of the techs money (or divy it up or whatever) - so now you can only pay 30 / hour and all your top techs leave. Customers figure out they're being charged top rate for tier 2 work and go next door where all your top techs went. Again you're out of business. The reality is, if you're paying techs top dollar, you can't afford to have them performing menial tasks. If you expect your techs to perform a bunch of menial tasks, the tech knows you're either A. not paying what they're worth, or B. not going to be in business long.
@@notsure7874 absolutely 100% accurate - we discussed that but David cut it 🤣 We have porters and apprentices which perform those task in the shop - and in no way is it logical to have a tech performing those services. My issue is all about the attitude.
@@lucas-changingtheindustrypcast Yeah attitude is a huge thing for me. I don't work in the auto industry (in that capacity) anymore, but my industry has a lot of parallels to be drawn. I have owned a car shop, and I still do tech work - so there are similarities, and I'm not foreign to automotive. Most of my clients are dealerships currently. I pay my techs (not auto techs) hourly. Sometimes if it's slow, I might send my top tech to a client to do some menial tasks. There is a lot of value in that for everybody. I get an experienced set of eyes on site to scope for any potential issues, the client gets benefit from that, the tech has something to do other than sit around ... It's a win all the way around. But when there's work to be done - I'll send a junior guy, or do it myself. In that regard, it's no different than having your top hourly paid tech doing oil changes when things are slow. Maybe that tech sees a problem with the brakes, and sells another job - something a lube tech would have missed. It's a dance for sure. If you're paying a top tech to do oil changes for 3 months straight, you're losing money. It can't continue. That tech also wants to make more money - and will correctly believe there is no opportunity to do it with you, and that it's unsustainable. That tech is likely to take another job somewhere else. Tell David to stop cutting important stuff! :D Seriously though - I didn't think you did that. I don't even know if that was you that made that comment - probably not.
@@notsure7874 in my opinion, there's so much that could be accomplished just with conversations like this between owners, management and techs. I get there's many shops that the management and ownership won't listen - but there are so many that will! I appreciate your outside perspective, it's really great to see things from another angle.
I've worked hourly, base plus commission and salary with bonus. Now I'm flat rate with a 35 hour guarantee. I've only had to use the guarantee once for a couple tenths, but it's definitely a different mindset. I'd rather be able to take my time, especially with diag (which I do) but I am making significantly more under this system. It does make you feel more like a number though
I don’t have a problem with flat rate and would take a job doing it only on one condition. I get to dictate MY bill. In other words, a true subcontractor. Otherwise it needs to be like other business models, hourly pay.
Why would you call something a shortcut? Service manuals are written as to how we think the cars are gonna break not how they break.There's 2 ways of fixing cars. The way the service manual wants it done and the easy way. A lot of the procedures and service manuals tell you to do things you don't need to. So why would you do it?
Our shop is hourly when it's slow we do maintenance on the tow trucks and other things to improve the shop plus our boss flips cars on the side so there's alway those to work on
And Lucas is absolutely right it does encourage technicians on a flat rate system of pay to look for the shortcuts because they are racing the clock it's not about quality it's about money because the technician is up against the wall either get as many cars down as I can get done or I'm not going to make what I need to make
You would think shop owners would get it. Yes flat rate is about money. It's doing the most efficient quality work possible and therfore making the most money with the time you put in. Do you think techs come to work for something besides money?
That's not true I love to learned. 35 years in this business I'm always looking to increase the skill level. Why because knowledge is power. I'm in Illinois my top scale is 42 bucks an hour. I don't expect to get the easy work I expect to get the hard work. That's what they pay me for. They don't pay me 42 bucks an hour to do brake jobs.
Imagine a heart surgeon getting paid flat rate. Flat rate is nothing more than a way to pay as less as possible. Btw, there's a great study that was done on flat rate pay and it makes points you've never heard of.
So I think there is a few more points that seem to always slip through the cracks .. -whatever part of the country you are isn’t comparable to other parts of the country .. ppl speak mostly on opinions and not facts .. here’s a fact for you where I’m at the avg income is 29k per person in a 4 city area of around 100k .. versus someone in an area of 500k plus ..you cannot compare larger city techs to small town techs … where flat rate might work in some areas aren’t going to work in others .. and if your response is to just move , then a lot of times you would have change careers to make enough money to move , because you are capped in the money you make whether flat rate or not based on the area ..a lot of this doesn’t cross ppls mind because that’s not there world .what could be the highest paid shop in one area might be mid level or low in another .. can’t raise the rates if the area can’t support it Another point is I guarantee a lot of responses on here are from ppl who have in the field a while and can hold there own .. most of these points are null and void to ppl who are new to the industry.. one of the main goals of ASOG is to try and change the culture .. flat rate promotes only hours .. pure money .. not training , not mentoring not teamwork , not nothing just hours .. I’ve seen things all over the spectrum .. someone making tons of hours while breaking 10 things on the same job .. someone cutting corners .. seem dealer techs and independent techs shotgun parts because it’s easier and more time effective then diagnosing ..you can make tons of hours as a flat rate tech and suck at your job as .. there’s a reason our pay is behind all other trades and why no one argues with a plumber but argues with us or barters .. If our industry was in good shape the comments of ppl would have more weight .. but our perception as an industry from a consumer stand point is that we suck overall .. maybe not your shop but as a whole .. if your a selfish person and do not want to help better then industry then keep your comments to yourself
I hopped on him about this in the comments....very bias, very one sided...good point in that Mike's youtube name says it all.... btw...enjoy the format!!!!
So, what's the incentive then for a technician who can do a 7hr interior job in 1.75, or who can do 21hrs worth of major diesel repair in 12-14 when only being offered a standard hourly rate? Specifically, how does a bonus system then work if you have other techs who do well to simply meet book time? Yes, I work in an hourly paid shop, I'm also the guy beating book time as shown(those are some of my examples from recent jobs I've been assigned). One of my frequent repair orders are for GM truck front end rebuild, ball joints, tie rods, idler arm, idler arm bracket, pitman arm, sway bar links, upper control arms and an alignment. My running time on that ticket is typically 4 hours start to finish. I don't do hack work and I don't rush. Things get put back where they belong, everything tightened to spec, vehicle is clean and all parts are greased and wiped down. The issue is when you also have slower technicians which is less helpful to net profits. My curiosity is how you have that conversation with your top technicians when they start to wonder why their performance earns potentially no recognition outside of them continuing to be employed. Not being combative or argumentative. I've just been in this situation at various places with widely varying results.
The incentive is there if there are bonus structures and consistent coaching towards a minimum level of acceptable performance. Gamification is another way. Labor times are arbitrary anyways.
If your in a busy shop you can make a killing on Flat Rate. Most shops near me pay top techs 40-50% of labor. I'm on salary now but only works to retain people if they are paid enough and have incentives for raises based on productivity.
35 years in his business, and I've been nothing but flat rate. What I started in this business They threw me into the deep end of the pool with the sharks and told me to swim or get the hell out.
I like flat rate. I make alot. I worry that if I become an hourly tech that I may slack off.. but maybe slacking off would be a good thing cuz I am running my ass off as of now. I also worry about making enough. I avg 70 hours a week working 50 hours a week. Seem like most of the hourly shops around here work 40hrs and go home. Also I don't care about gaurentee.. if I land on a 35 hour gaurentee at any point... I start greasing the wheels on my box. (Been in the same shop for 13 years tho)
Pay me 40 hours a week i clock out on tues for the week. Just saying. Want me to work salary or hourly then the pay needs to match. Hard for shop owners to pay over 130k a year salary.
Ive been on flat rate for over 25 years. All the hourly places where i live pay 15-20 bucks a hour. I make 30 a hour on flat rate. I guess my question is how much money do your employees make a year and what is the median income in your area fellas?.
Flat rate is simply commission pay, also called "performance based pay" by another name. Corners dont get cut because any issues arising from faulty work is taken care of by the same tech. and if he isnt there the cost of repair comes out of his pay. Also, what corner cutting tech would say, " oh I'm paid by the hour,no desire to cut corners." Think of all the business realms that pay by commission. Hourly pay means move as slow as possible to get away with, because doing less work for the same dollars is like getting a pay raise. A techs morals and scruples dont depend on dollars paid. However, not ALL businesses and kinds of profession can effectively implement commission type pay.
35 hour guarantee doesn't lead to tension or an argument. If you continually draw guarantee That is grounds for termination.. You're not doing your job. So in other words learn how to swim or get the hell out.
Easy to say that when there is actually no work. Also many times the Warranty work undercuts hours so much it looks like the hours are low. There needs to be a federal warranty reimbursement law at the customer pay rate.
I think flat rate is a good idea if everyone is on the same leave... hourly problem there is no encouragement to do better but long term hourly is safer.... flat rate can make you or break you...the end...
I'm going to tell you this. I like Flat Rate. I dont necessarily have an issue with hourly. I have an issue when I go to a place to work and the first week it is dead and i'm getting a broom shoved in my hands. I did not sign up to push a broom although I will clean my bay area and keep my area nice and clean and organized. I sign up to work on cars all day if you dont have the work I dont stick around. I dont care if you're giving me hourly or flat rate. I dont care. If you dont have a car for me to fix all day everyday you midus well just give me the day off because I aint coming up to a building to hang out and be present all day with no work to be done.
@@ChangingTheIndustry when you sign up to be an auto tech that's the work you do. I ain't there to do anything but what I agreed to do. You want a servant go get you one. This ain't a fast food restaurant we ain't teenagers we are professionals no different from lawyers or doctors and last time I checked nobody expects those other professionals to do anything but the job they trained for, obtained education for, and bought equipment for. Automotive technicians are professionals and it's time we got the same respect as all the other professionals.
It can't be 50% anymore.... It certainly can't be 60% or 70%... I mean....it could? But you'll have to dramatically increase your margins elsewhere. The 30% target works just fine, it leaves room for balance up and down as needed. Instead of reinventing the wheel, we should encourage the industry, as a whole, to get the rates up where 30% of labor is a great wage for technicians. Then it won't matter how they are paid, as they'll be paid fairly.
It just seems like you guys just agree on your own opinions. It's down you who you work for and the income area of the customers. I will say 2 and half job in 30 mins? On hourly? With a 5 buck commission? Nah You me got till close in 30 mins aint worth the stress on my body. Done this 6 tire dually alignments with team in 30 mins. Aint worth it man...
I can see both sides of the argument. I feel a hybrid type system would work best. No GSTs just mechanics at a shop. Each mechanic would get a flat hourly rate by punching in and out on a clock. An then an added "bonus" or what ever you want to label it as base of the book hours each job pays. So for an example you have a master tech with every ASE, 20+ years of experience, every possibly tool you could need, can diag, can program, the best mechanic you could ever want. Give him an hourly wage of $10/hour base off his clock time at work. And then for every job he does he will obviously be given flat rate time for each job pay him for those hours at a higher rate say $15 or $20/hour ontop of what he makes from the punch in/out clock. Both of those put together I feel big you the best of both systems, flat rate and hourly. The smart hustling flat rate pros will still make a good pay check but the guys will less experience or doing something they have never done before will not starve.
That's similar to what we do! Typically $18-$30 for a flat 40. When the billed hours hit specific levels (35,40,45 etc) the hourly rate increases for the entire 40.
@@ChangingTheIndustry is that all flat rate book hours? I only ask because if the shop is a basic lube and tire shop with one flat rate mechanic, if there is only 30 hours of hours being billed, the tech will still starve no matter what. I guess what I'm trying to get across it's that one modle doesn't fit into every shop. Each shop has to find what works for them and make the most profit but also keep you employees happy
@@ChangingTheIndustry - I might if I thought the business case was justified but that would be really hard to do. You cant pay high skill wages for minimum wage work; that being said, if i thought it paid off with higher customer satisfaction or retention or something else, then i would.
I started in the industry working hourly and begged my employer to put me on flat rate. I think that the hourly shops should only be the quick lube places because they're business model is quick, inexpensive maintenance repairs, and the only way to make a profit is to keep the techs pay at a "set" amount every week. It's easier to account for it. Now I work in a repair shop where we do it all minus paint and body. We do everything from the oil change and brake job to heavy line and interior work , so flat rate is the best possible option for me because then the burden of my paycheck rides on me. I do not "shortcut" repairs by doing a hack job because the comebacks are my responsibility and I don't get paid for them. I have worked with guys that will cut and hack good parts on vehicles to get a job done faster that get paid flat rate, as well as I have worked with hourly guys that don't care and will destroy good parts doing a job. I think the real problem here is the employee NOT the pay terms. I'm 26 and have been doing this for the past 8 years. I'm still new to the industry, but this is why I "run" my uncle's shop as a shop foreman and we have gotten rid of the "hacks" in the shop very quickly. I don't put up with it and I have noticed that the way that we pay them has no bearing on the type of mechanic they are. Personally we let them choose how they want to get paid. The hourly rate is a guarantee for them every week, but the flat rate method puts more money in the pockets. They decide and we make it work. It can get a little confusing but the guys in the shop make it work and everyone turns a profit.
Hourly can have a production bonus which is very similar to the reward of fllat rate BUT guarantees 40 hours a week of pay. Anything paid hourly...less than $20/hr with a production bonus is still flat rate.
@@lucas-changingtheindustrypcast that is sort of how it works here in California. Here we HAVE to at least make minimum wage for the hours that we are at the shop. The way the shops that i have worked for are setup is that if you don't meet your necessary hours for you to make your minimum paycheck then you get paid minimum wage for your 40 hours. However we also get paid double minimum because we have our own tools, so it's really not that hard to make 40 anyways in a week so you pretty much never see that minimum rate. Perks of living in California and knowing how the law sets that up for us as employees, but still i wouldn't work for another hourly shop in my life
@@martincalvillo3210 what is your concern with hourly? Our guys make more on hourly with more protection and benefits than most any facility I know of pays, even on flat rate?
@@lucas-changingtheindustrypcast i make $38/hr on flat rate. And i close at least $1500 a week take home. On hourly there is no drive, at least for me, to produce anymore. On flat rate there is
@@martincalvillo3210 I definitely agree! And it's something we definitely encounter. The culture and environment has a ton to do with it as well. We've tried to leave the incentive aspect in place while still making sure if we're slow or they had an off week they can pay their bills. I believe it's an obligation that an employer has to care for their people. My parents have always cared for their staff in their business and often given far beyond what they should have to take care of people....at times almost to the point of enabling. I don't go that far with my business - but I believe we have an obligation to our people. I personally believe flat rate is a lazy management strategy. Effective? Yes. Now - the other thing we've got to bring up - flat rate with a guarantee? That's another thing. But straight flat rate with no guarantee? I dunno man.
I would Refer the Flat Rate Master to United Auto Technician Group. They provide A Flat Rate Paycheck Protection Benefit for its members. I am sponsored by them.
Lucas you are def wrong about the hourly guys being sent home. a/b techs are flat rate, c and below are hourly. I have seen hourly guys sent home and they also have to clock out when they reach 40. Regardless if we have the work or not
Not in my shop. And dang right I'm sending my guys home at 40 hours! Atleast I try like heck to send them home. Life shouldn't be all work. The purpose of an auto repair shop isn't to fix all the cars, it's to be as profitable as possible 40 hours a week.
I know how to solve the car wash issue and the extended test drive issue on flat rate Pay The Tech To Do Those Things. No such thing as a free lunch. I'm not understanding why someone should do things for free. I dont get that.
Flat rate is probably not going to go anywhere anytime soon. The second we go from automotive technicians to electricians is the time to flat rate will go away. And then the price of poker's really gonna go through the roof. People think it's expensive to fix cars right now just wait. And it's my speculation that voltages are going to get so high that you're gonna have to polarize yourself to the car to work on it. However, all of that being said. Somebody's going to realize that the problem is not the internal combustion engine. But the fuel that we're using. Some smart son of a bitch is going to come along and say. Hey, let's use this instead of that. And when Winter comes along let's add this to the mix.
Wow you guys are so wrong, hourly shops will definitely send you home!!! If it’s only one day in the week where it’s slow they’ll probably keep you on but if the whole week or month is slow they will definitely send you home, can’t even believe you guys are debating this!
If it's salary....it doesn't really matter. They still get their checks. Most honest and ethical operators, if it's slow? They are paying their people regardless.
That Lucas guy is out of touch with realty. He is the type of guy that wants the best of both worlds. His mindset is the contributor to the mass exodus of skilled technicians from the industry.
@@ChangingTheIndustry I like employing the best of the best. I let them choose their own pay structure. They all choose flat rate because they know they are good. My uncle owns a Nissan dealership and the techs there are hourly. Every time I walk around that shop, the employees are just numb and have no drive. What I mean by best of both worlds is the fact that the owners who pay hourly wants employees to do what they are told and they also want control of the pay. In the reality of this control, the owner loses sight of the forest because of the trees. There are too many reasons why I would not want the best of both worlds.
@@brianrhubbard dude....you clearly don't understand the pay plans we're talking about 🙄.... The pay plan I have pays our guys based on production but gives them guaranteed 40 hours at a damn solid wage. I'd bet we pay more than any dealership in our area....
Flat rate is the best for me i agree with f.r.m. are you going to put your best diagnostic guy on a car wash or put gas in cars hell if so you might as well have him make coffee clean the bathrooms and get lunch for everyone just plain stupid in my opinion but if my employer will do that and pay me the same ok then
I disagree 100% I switched to flare rate from hourly best decision of my life my friend. You do get capped on your income. You know what your paycheck is but something that I had multiple old heads tell me that were worth their salt they don’t check their time till the last day of the pay period even on flat rate if your main focus is fixing the car then the rest will work itself out. I think you guys have a predetermined view on all flat rate which I guess is fair bc I have a predetermined view of shop owners who only pay hourly. There are a lot of shady things done like for example my shop doesn’t pay hourly employees overtime. They will up to a point just as an example when I was hourly I worked 120 hours every pay period anything over 80-90 hours should be overtime depending on how long the pay period was The most they ever paid me for overtime was 15 hours Sorry my friend but that’s as crooked as y’all’s hairline brother 👊🏻
Both of you ever worked on cars if you haven’t you cant comment you dont know what its like to make a living day in and day out i been doing it for 20 years
All I'm saying is that I watched that full video from the Flat Rate Master. I think his arguments were spot on in this particular case. And yes, there's nothing wrong with a tech wanting to make the most he/she can. I can tell you the younger generation isn't buying the same crap my generation has been sold. For good reason, because most of it is a lie.....
@@Joe.O_623 I'm confused - we're trying to say techs need to earn more and some his observations about hourly are short sighted. We're hoping to encourage techs to make more and give them (and owners) tools to do that?
Even though I’m not such a flat rate fan because I see in some soft and situations just like bonuses can make for some bad shortcuts in over recommendations for work that’s not needed with certain types of people. Flat rate could work with a group of honest technicians and the owner in a very busy shop that’s never slow and they only work on one kind of car so they get to know that one make vehicle very well never have problems and know the trick to every car without come backs. Then flat rate works out well for everybody technician gets paid well the owner makes money and the customer doesn’t get their car hacked butchered or shortcut that may cause problems later on. Pay is a touchy subject especially when you’re dealing with different states that have different employee employer laws. Before opening my own business I’ve worked all the different pay methods from private garage to franchise to corporate owned to dealership. Of course the one thing the owner of the shop fears is there a technician learning that if they get a little educated and manage their time right and do side jobs that they start making more money doing side jobs and they don’t need to work for anybody that is a owners biggest fear or at least one of them. Customers some situations end up liking a certain technician who works on their vehicle and will actually follow him to a new location or he opens up his new business and take some of his previous bosses customers. I just wish more technicians who are really sharp and extremely talented but maybe lack peoples communication skills and not confident on themselves opening a business like when I was young. Learn if you open your own business you could make so much more money than working under any type of pay system somebody offers you. And with all the management software nowadays that they didn’t have 30 and 40 years ago and with the tax software makes it so easy in the shop running software and the computer with the Internet on it to access videos of how to buy other tax in the trade. Now that I’m 30 years into my own business with today’s technology opening up and running a business is easy as passing kindergarten or class all over again this new young generation is very privileged life is so easy compared to keeping books on ledgers. Ordering parts that are special order by mail waiting for the letter to get delivered to the manufacture of a component parts house or a phone call there was no voicemail there was no text messaging there was no email. It’s so easy nowadays if I were to close my business now and start over from zero I could build up 30 years in one year. You live in a privileged generation of information and knowledge at your fingertips. Being a vendor for so many shops in our San Francisco Bay area I’ve seen many technicians quit their jobs and then I hear the boss say they’ll never make it they can’t run a business. In that technician who opened his own business and I’ve been one of my customers who calls me in to do my specialty work in his shop and I watch him grow I watched him by his building over the years buy more investment buildings buy cars and motorbikes and have fancy toys because they’re making so much more money working for themselves in a shorter time possible nowadays than 30 or 40 years ago. Business is easy but you always have your boss say it’s difficult because he wants to keep you behind a wrench making money for him it’s the boss who can’t wrench himself who are the most afraid.
I just went from flat rate to hourly and it’s so nice. Now when writers don’t want to charge diag it only hurts the company, when I have to do a 2 hour job for .2 pay it only hurts the company, when the parts department forgets to order parts 3 times it only hurts the company. Hourly pay shows how poorly shops are ran.
Agreed!
Wow, so much out of context. First, I work 45 hours a week at the shop, I do not work after 5:30, other than filming these videos, I am out the door at close. I have worked at hourly shops, and yes people got sent home. I have also seen the result of techs being paid hourly and the loss of production that almost always comes with it.
As far as training, we promote it at the shop I work at, I have trained several techs from basic lof techs to full shop foreman, 2 to be exact, both can now diagnose everything from network issues to electrical shorts etc and have trained many in between.
Fyi, I say often the pay method doesn't matter what matters at the end of the week is what your pay check says.
So your grand plan to is to put the burden of ownership, aka, bonus program tied to your P&L on your employees with I am guessing a very small carrot at the end of that rope they can't reach? lol I am being sarcastic, but most ESOs that do that sort of plan rarely does it work, nor do the employees benefit from it, more so because they think putting that burden on their employees will result is some magic that will fix their P&L
I definitely agree with so much of this! And I agree with much of your original video.
One of the big things David and I have both had to learn is that many shops aren't doing things the way the shops in our circles (or our shops for that matter are doing things)
And that can be tough to see and stomach at times.
One of the key points you'll see in the comments is that one of the key underlying points is its NOT the pay plans - its the people.
You work for or with scumbags....your going to have a bad time.
You work with people who are genuinely invested in the best interest of others, and understand that to achieve greatness it takes a team....a family? You'll have an amazing experience.
As for dangling the carrot - flat rate dangles a carrot much like the other plans.
My concern with flat rate is we talked to hundreds of techs who WEREN'T paid a guarantee or given PTO/Vacation.
They didn't have any benefits and the minute their performance declined they were dumped on the street.
The guys on the diag lane take a particularly hard hit as many advisors are afraid to properly charge for testing or issues with vehicles beyond the scope of normal repairs .
In fact - while David removed it - I mentioned my biggest gripe was that front of house was charging to fix 100k cars like they were 20k cars - the hours weren't accurate.
I truly believe that if an employee works 40 hours, he should be paid 40 hours.
In my shop we have a plan that makes sure they have a great living wage and that goes up based on production. This plan gives the employees the maximum amounts possible based on industry standards and in some cases goes over those industry standards just in an effort to make sure our people are ok.
They get paid time off, if they get sent home because we're slow - they get paid (hasn't happened yet), if they need to go do something, they aren't taking a time hit.
I truly believe in taking care of my people - I would NEVER nickle and dime their wages.
That being said - I recognize there are owners who aren't looking at an employees best interest.....
And many of those aren't being mindful of overtime laws, minimum wage and the education of those who work for them - I see those folks as a true detriment to our industry.
I personally feel that over the next few years, we'll see labor law changes which force those using flat rate to reconsider how to pay their people.
I give you my word - I've heard way more horror stories than I have positives on flat rate - but I do take your perspective into account.
From where I sit? I truly believe as a trade...an industry or profession we are horribly under valued.
And we, as professionals have allowed this.
We wouldn't even be having this conversation if shops charged appropriately to ensure profitability...
To ensure their people were paid...
I hear it day in and day out - its bad owners!
I've got to be real with you...the majority of what I've seen? It's owners who A) have no business running a business or B) are completely clueless.
I honestly believe most people, deep down, are good people.
Holy crap! No chance did I think you'd watch our video. 😱
Oh....and I'm not asking my employees to fix my P&L...thats my job....
I'm going to take a check as an owner, pay all the employees well and give them the fruit of their labors.
Burden of ownership? Nah man...we're an extreme ownership shop.... that burden is solely mine.
Have you ever been an owner?
Did you at least like the thumbnail? 😃
Thanks for the book Lucas. I plan on sitting next to a nice warm fire and reading every word one day.
Best point made was on flat rate you limit what you learn. I averaged 76hrs a week at the dealer and was making 100k a year but didn’t learn or gain hardly any knowledge during that time because I was solely focused on turning hrs.
I would agree that's the best point. 😁
I'm in the dealership shop world as a technician and flat rate labor times are being reduced for jobs. It's been happening for a while now. Warranty labor times are crazy low. Technicians are having to fix more cars to make same pay because labor times are being cut.
It honestly all seems very shady. A job should pay the same time regardless of who is paying, warranty or the customer. It should be illegal to charge different rates depending on who us paying. Yet it happens everywhere, go to the dentist, one price if you pay out of pocket, another if you have insurance. Same job, should be same cost.
Its all very unfair to consumers, and people are so wary for good reason of going to the garage. As an small independent shop, I see so many people come in after getting huge inflated estimates. Explain to people what needs to be done right away for safety reasons, and what may be able to wait till the next oil change. Dealerships especially, don’t seem to differentiate between a millionaire and someone who doesn’t have money for groceries. Dealerships also don’t seem to care at all about throwing parts at a job. We are going to change this part but we might have to change that part, blah blah, no care about the cost. A friend spend $4000 on an E450 before the dealer found the less than $100 fix. Luckily as they were about change the PCM next.
Bills these days can get really high on routine jobs. Had an old lady in her 80s come in, dealer wanted 3 grand to fix her exhaust, I had it out for 500 or less. Good grief, cars like a 1998 with 60,000 km, its a weekly at most grocery getter, she doesn’t need to drop $3000 in it.
My dad’s previous Corolla he took to the dealer for every scheduled service, by the book. I have maintained his latest one, saved him $1000s. People need to be aware of whats going on, find someone they trust and stick with them. Otherwise they could be getting overcharged, and oversold jobs left and right. The automotive repair industry has a very shady reputation and unfortunately very well deserved. Flat rate being a major part of it that should be abolished.
@@peterl2017 Its technically illegal in my state but dealers seem to get away with labor law violations.
Technically if you are flat rate tech, it is illegal to force a tech to do anything else besides working on cars. If you make them clean the shop, take cars to wash etc...you must pay them for it otherwise this is wage theft.
wish pep boys will learn this
Yeah try arguing that to your employer
@@BrokeMekanic I will warn my employer, then I will call the DOL
@@desertsoldier41 if you start to cause these kinds of problems you will be black listed and have a hard time finding another job in town.
@@BrokeMekanic Blacklisting is also illegal. If they are caught its actually a criminal offense under RICO laws. Also I am no longer a Flat Rate tech...I am done getting scammed.
Most shops that do not pay flat rate still have bonus incentives for over 100% efficiency.
And flat rate is dead.
Your right 100 percent working hourly and working flat rate being on flat rate I felt pressured put more then 40 hours in and trying to find short cuts that horrible hourly takes stress off
I do realize a dealership technician is most likely working on the same brand a lot and yes they are familiar and yes they are fast and they're probably efficient however it does make it a whole lot more difficult to make hours when your labor time for the job is being cut. Especially if the person cutting that labor time does not take into consideration the diagnosis time the sheer amount of stuff you need to pull off to change that part etc
This whole ‘flat rate is evil’ debate is a deflection for the real problem. Most shop owners are crap business owners. A poorly run shop is going to make any pay plan (possible exception being straight salary) look bad. Flat rate is the scape goat because it’s the predominant plan.
If a shop is run well, then it has sufficient car count to keep techs fed - because it has an effective marketing plan. It has advisors who can educate vehicle owners about their needs and help them understand the value in service and repair - again keeping techs fed. If the shop owner is engaged and competent then this concerns aren’t valid.
As for those that say flat rate creates corner cutters or forces techs to be dishonest - that’s BS. That’s a personal ethics issue. Ultimately though, that is also the owners fault for hiring low moral compass individuals.
‘But techs have to cut corners and beat the time if they are going to make a living on flat rate!’ BS. Pay them well enough that 1 hour of labor produced per 1 hour of labor works earns them enough live out their goals. Charge enough to be able to pay them that well. Train your office team enough and provide enough value in quality, warranty, services added to justify the higher prices needed to provide well for your team.
ALL OF THIS COMES BACK TO CRAPPY OWNERS. I know - I was a crappy owner for a long time and there are still some days when I am, but I realize the difficulties in our industry aren’t pay plans or ‘kids these days being weak’ or whatever other excuse people put out. The problem is us - the bosses.
The problem sir....
The problem?
Well the problem is you're way toooooooo smart for your own good and hit the nail on the head!
💯 .....couldn't even add to your comment with a reply 🤣
Well.....maybe flat rate causes corners to be cut.....it does! But only if you don't charge enough hours.
@@lucas-changingtheindustrypcast even if you charge enough hours, they're still incentivized to cut corners.
@@DavidRomanKC and that comes back to ethical fortitude. Employ good human beings and pay them well so they don’t have to feel pressured to scrounge for Pennie’s.
@@DavidRomanKC don’t blame the pay plan - blame the leadership failure. Stop looking for scape goats and own the failure.
Take that gross check amount for that pay period divide it by the hours you ACTUALLY put on the clock and that's your TRUE hourly PAY. Either way you cut it, you'll see that one system requires more BS to accomplish that amount you wish to be paid/hour. There are some who do make alot on flat rate, key word gentlemen "some" and it's about who you know and who you blow 9 out of 10!
However, let us not forget about those variables such as those benefits or lack thereof, economic times (slow periods), possible weekend work to accomplish those numbers before pay day, warranty work that isn't handled correctly, parts delays, cheap parts to increase those margins, not billing for extra time correctly, not billing for diagnostics correctly, the so-called "quick" inspection without billed labor, and the weather conditions which can dramatically increase time on car when comparing it to "book time" depending on the location and conditions of the average vehicle being worked on. Shall I continue? The list of indirect labor time is astonishing and book time is not going to factor any of this.
Overall, the choice is up to the technician, what do you want? Try both systems and see how you do and compare your ACTUAL time put in to that paycheck...one will realize real quick what system is best for you 😉...I personally, would never work flat rate again without a salary guarantee and if I could somehow convince them (the shop) that I'm only capable of nuts and bolts straaaaaaaight straight gravy train all day after 21 years of experience! That's my opinion and I am grateful for my hourly rate at the GM Dealership 🙏...best experience I have had doing what I am always given despite the place I work.
I get paid hourly, body shop in a small ass town. I’m fortunate enough to get 40 hours regardless if we work 40 hours or not, and I still get overtime. Point I’m trying to make is privately owned body shops need workers too. Main aspect I like about it is that everyone I work with is super respectful and just good people to work with.
That makes all the difference in the world!
I worked for GMC and my manager said I wouldn't have to worry about hours as long as I make hours. I was making ,at 1st, 30-48 a week. Then they started a service advisory "team" based system. I then went to 8-23 a week. I was giving all electrical work and all my camshaft jobs where being then away from me w/o me knowing and handed off the the managers "pet" (A tech who followed the SM to 3 other shops) and or the next guy on line. I then had conflicts with the SM and stated my defense and he was more interested in conflicts between me and the advisory and the bottom line and that was hours.. Sorry boss can't make hours when my "team advisor " is getting the least amount of traffic and I'm the only one at the dealership that can diagnose CORRECTLY... but hey life sucks and you keep bouning until you tap out and go to a different line of work.
What a Shame Shouldn't even have to be this way, I know what you mean though!
I agree with FRM 100%. Personally I wouldn’t even apply to an hourly shop.
We'll see how you feel in 15-20 years.
A I'm 62 and do vary well as flat rate
@@markhodge7485 not everyone is Jack LaLanne.
Experience. Not age .
@TAKgaming I figured. 🤣
I loved flat rate, i was very productive when i was at the dealership because most repairs are repetitive so obviously you get better and better, less tools to buy, only one brand to worry about and one brand to learn. The positive i got from it is the process of a diagnostic from start to finish, i developed good habits such as getting a good night , drink less and get up early in the morning at 450 am to get my workout done and be ready for work with breakfast in my stomach and full of energy. My checks got better from doing all this so saw it as a sport. However working for an independent shop is not the same. I mean i still make between 55-65 hours a week working 40 hours. We dont work weekends, i get to do 90 hours a week when we have a good week, of course with a helper. I used to work 50 to 60 hours at the dealership and after doing since 2004 it just gets tiring, i felt like a hampster running on that spinning wheel. I work salary now, i have more responsabilities since i do most diagnostics but at least they are paying me well enough so i dont have to worry about the money. All i have to worry is about get the job done right and make customers happy. Im not about flat rate anymore, i still kept my good habits though. Lol.
I been a dealer tech for over 20 years always been paid flat rate I couldn’t work hourly. But seeing the new hires work ethics coming into the dealerships now they would never survive at flat rate. Maybe some would excel at it but most would not. Mainly because dealerships do not take the time to train anyone they just throw them in and hope for the best.
Keep up the good work Lucas and David!
Thanks brother! I think we need a discussion of what hourly with profit sharing or production bonus looks like.....
I dont think anyone understands 🤣
@@lucas-changingtheindustrypcastBingo! Those that have only worked flat rate have a one sided perspective.
Moonlighting is not an issue. Work your people and pay them very well and they won't moonlight. let me Ask this question ,what gives the shop owner the right to dictate what people do when they're not On the clock?
Flat rate is great for parts changers/dealership techs where diagnostic testing isn’t needed. The base issue is you can cut engine book time in half, but your not going to cut diagnostic time in half. With the shortage of diagnostic techs, more and more diagnostic work falls on one person in the shop while an army of parts changers are shouting the praises of the flat rate system. Flat rate rewards low skilled techs and heavily punishes pure diagnosticians. Tickets are distributed based on skill set, so the gravy goes to the low skilled and all the intermittents, multi issue, been to 5 shops, low flagging work gets rammed down the highest skilled techs throat and destroys his paycheck.
Best case scenario, which is extremely rare, is for a diagnostic tech to just flag for the time he spent testing. All while a career parts changer cuts book time in half and runs over 150%+ efficiency quite easily.
Flat rate with a X amount of hours garantee feels like the best way to be paid from my perspective. You have that base "hourly" rate that is your garantee, but you can blow that out of the water if you hustle and stay busy. The short cuts issue should be handled by the shop foreman and unethical techs get cut. They end up in the hack shop they belong in.
So a 40 hour guarantee that increases as hours increase is how I've been doing it.
It's what you would call a hybrid. You're rewarded for the work you accomplish, but your guaranteed 40 at a good wage.
That way if the shops slow, or we go to training everyone know the number.
I'm working on profit sharing so hack work, warranty or comeback work and waste is discouraged because it effect everyone's bottom line.
I want to do it right, so I'm not rushing it.
Moonlighting is nobody's business, when a shop owner has an issue with it then he is getting out of his lane. What a tech does after work is their business. A shop owner owes nothing but the agreed upon deal with the employee and the labor laws, the employee owes nothing to the company but the agreed upon deal with the company.
And that agreement includes that you don't moonlight.
@@ChangingTheIndustry not if it isn't in writing, and that isn't reasonable anyway. If your stealing customers that walk in the door I would understand, but if they never walk in the door and go straight to to tech after work in the first place then it's nobody's business.
Flat Rate has a bad reputation for a reason. Balance is key. Mike is an honest person and seems to care and that is what I like about him.
Agree 100%
Bring him on and have a discussion!
The profit sharing/hybrid pay plan sounds interesting.
Appreciate the video!
We don't know him, but we're always glad to have him on!
I may share some of the challenges and ideas I have about a profit sharing plan and the process of working through it at some point.
He's a WAY bigger channel. The only big time UA-camr that has given us the time of day is Mario (Super Mario Diagnostics). 🤣
@@ChangingTheIndustry hey! What about Cody? 🤨
@@ChangingTheIndustry he also knows when he gets beaten in the argument he's essentially finished in his whole channel and its message.
@@lucas-changingtheindustrypcast I mean, I love Cody... But he ain't leaving comments, is he?
Hybrid is the way to go - I believe compensation plan structures should be evaluated annually and the hybrid plan makes it easy to apply minor tweaks where employees can manage there expectations/budgets and employers can take care of their people. Employers who flip from hourly to flat rate or reversely unintentionally create an emotional disruption in their which often impacts production. I believe hybrid strategies also allows for employee development in business because it creates more insight into what the business owner is trying to achieve, simple compensation plans limit employee development and if you aren't developing your people eventually they will leave you. Once employees can understand what shop owner are truly dealing with I think they should have the opportunity to partner with their employer to create their compensation plan, it creates more buy in.
btw, love the vid
@@KipNuesch thanks brother!!!!
You make a very important point - emotional impact.
You'll see in another comment I made that I brought up my concerns on this issue.
We treat pay plans as shop owners very willey nilly - this is someone's livelihood.
You also nailed it on the head - why we've not switched out plan yet - I can easily make minor tweaks and the production component is SOLELY them affecting it. Much like flat rate.
I want to be 100% prepared and ready when I make a change.
I'm done scratching others backs. They never scratch mine.
So the idea that a flat rate tech is cutting corners in order to meet a certain efficiency level is assuming the technician can't possibly be good enough to accomplish making 60 to 70 hours without cutting corners. This argument I feel will never end because the bottom line, in my opinion, is that there are some techs that are simply very efficient. They're very efficient not because they slap things together and use Identifix to diagnose everything. But because some of them are naturally talented. It comes easy to them. Every aspect of the job is mostly easy. The diagnosing and the repair. Point being that flat rate is neither better or worse. It all depends on how the shop owner wants to run his or her business. And what talents the tech brings to the table. I personally wouldn't want to be paid a salary. I like being able to feel a sense of autonomy within my work place. Not because I have anything against the shop owner. Or because I don't get along with the guys. Or because I don't like to help other techs. Or don't like to clean. I would take the car through a car wash. I often inspect the car before I park it for any finger prints, smudges or anything that looks not clean anywhere near the area I worked on. I have Windex and micro fiber towels next to my box. And not because i often leave fingerprints or anything of the sort. But because I just dont take the chance. I do a once over and make sure it's clean. And for some cars I use a plastic wrap that protects the paint while in repair. And we have a car wash in the same parking lot as us. But I'm also flat rate. And I almost always come in at about half or less from the book time. Just did a 25 hour engine swap on a BMW that was done in one day. It just comes easy to me. It's not even like I feel I'm special. It really is that it's something that comes natural to me. And I know I'm not the only one. I've learned a lot from techs that are better than me. And I continue to learn daily. I also don't work long days. I'm in at 7. And dome at 4. I don't have to work long days because I'm efficient. In terms of diagnosing it's essentially the same thing. Sometimes you get vehicles that are real head scratchers. But a majority of them are typical. Again this doesn't mean I disagree with salary. If it works for you and your shop. Great. But I think flat rate simply works better for certain techs. I work with a tech who sort of demoted himself to lube tech/tech. He doesn't like the stress. He doesn't like the feeling that you're on a time limit. And that's ok. The shop accommodates him. He works 4 day weeks. And basically takes the overflow. And no one expects him to get done quickly. It's a mutual understanding. Now does he make what I make. No. But he's ok with that too. I don't feel flat rate techs should be doing anything other than working on cars. That tech is flat rate. They make nothing if they're not diagnosing and or repairing. How can argue that? And a flat rate tech who is actually really good will see time as the coefficient of his paycheck. We are efficient because we understand time management. So the feeling you get when you're flat rate and get pulled off a job to run a car through a car wash is that you're losing money. Which again, if you want a no questions asked response, then you have to pay a comparable salary. Now I will also express that I've never seen a salary that would match what high efficiency tech on flat rate makes. But I'm sure it exists. Specially if the shops whole businesses model takes into account that they pay salary. If you want your techs to do whatever it is needs to get done. Then they should be on salary. Although I'm not sure you would make as much if you're techs are often tied up doing other things. It seems to me that wether or not a tech is flat rate or not that tech should be working on cars or diagnosing them. Isn't that what your in the business of doing? I understand that there are a ton of other things that have to get done. But that's usually what you hire hourly employees for. At our shop we have 2 to 3 front desk people. As well as the shop manager. At any given time if there's a part that has to be picked up. Or a car that needs to be driven. They can do that. They like to keep us in the shop diagging and repairing. So in this case the business model is to keep us techs busy being techs. But that's what works for our owner and I. We do have a foreman who's salary. But he is there for overflow and overseeing the back of the house. So he's not there to turn hours. But I know he also doesn't make as much as I do. He doesn't need to. He's ok making less. Again it's that understanding.
We have Hourly technicians. Well, they're not really technicians; they're more like parts hangers. But when we're slow, they're the 1st ones to leave because of employee costs.
Best thing I ever did was quit working at the flat rate dealer and went to a hourly electric and gas utility company. Union backed retirement ect... and more than tripled my income
😬😬😬 Union?!?
@@ChangingTheIndustry yup IBEW 1245
I make great money on flat rate and always do an honest job. I just work very hard and efficiently that’s all. I don’t take tea breaks or play on my mobile phone all day long!
That's a huge factor! It's really dependent on the tech, flat rate certainly isn't conducive to lazy behavior...
I've been sent home lots of days at hourly shops because theres not enough work booked. And in the summer season when I'd rather be fishing I will volunteer to leave early or stay home during slack times. It's a very real reality that lots of shops in January and February when the Jones are maxed out on Christmas credit aren't coming in for anything. Its just another layer to why so many shops aren't run properly. Flat rate guys go home instead of sitting waiting and they're punished and reprimanded for it. Hourly guys get the same treatment whenever wages come up. Its the first thing they're reminded well if you were here more you'd get paid more.
The price of morale cannot be calculated by the employer as accurately as it can the employee. I may go home when it's dead as a way to preserve employment. Because staying might really sour my attitude. That's the variable that many dont remember
I keep telling you to come on down. Fish from the shop.
Get paid when you get sent home.
The whole 9 yards. I'll go hungry WAAAAAY before I let my guys go hungry.
@@lucas-changingtheindustrypcast I know my brother. That's why you're a unicorn within the industry. 1 in a million actually has your attitude. The rest not so much sadly
At the dealers I have worked at it’s about cut corners example starter takes 3 bolts and one is difficult to get in , will many units only hv 2 bolts , sensor bad , don’t remove just lay the new one over and zip tie to original harness just cut the ends etc etc , and then there is the flat rate variance chart if not 90%or better your history
Only thing close to flat rate for me was the first shop I started at in 2003. My first 2 or so years was hourly. Then I went to a salary plus 35 percent of the labor I produced. Worked there for a little over 8 years. Unfortunately the owner had some personal problems
then I moved on. Other than that vowed to myself that I will never work flat rate.
Why, cause I feel i wouldn’t learn or progress knowledge wise nearly as much. Also hold myself and the level of work I do to a high standard. Everything that I pull into the bay has my and the shops name on it. Not to mention I despise comebacks.
Attend every training class possible and home school a lot. Can still make good money working hourly at a good shop. Last year I made 111k. Average 43 hours a week. It’s no doctors or lawyers pay but it does pay my bills. I do side jobs at my house that definitely puts me above the pay on the books.
There are advantages and disadvantages either way. I have been in this Business 31 years and spent the 14 years in the dealer. Dealership you can do great on flat rate it’s usually one product line and a stocked Parts department. From my experience places that want to pay only flat rate don’t mind wasting your time , Or over stuffing a shop. A place that will offer a guarantee with bonus in my eyes believes more in their business and says to me I’m going to make it happen.
I like the new hybrid systems I've been seeing. You have a guarantee, and anything above 100% efficiency has an 3-6 dollar plus incentive. I am hourly with incentives on efficiency. Some pay periods I flag 80-100 hours and then I get screwed on warranty for a pay period and work 80 hours but flag 65. It happens. A big part of this whole topic is to find a good employer and what works best for you as a technician.
At 6:20 FRM says "If you're an hourly technician you get sent home". Sad to say but it isn't BS. Now it might not be true in every shop, but I lived through that kind of thing early on in my career. I remember the shop foreman "Roy S." walking over and telling me "Slow down you're going to work yourself right out of here today", and he was right. While I was hourly, I would quite often have ten to twelve hours production in by 2~3 o'clock and if there were no more cars coming in that day, I would be sent home.
You're exactly right! And we both recognize there's tons of shops that use hourly as an advantage solely to them.
In our facilities, folks are never punished in that way.
For instance, we've had some snow storms recently, everyone got their normal paycheck, even when they were sitting at home.
Our hope is to bring awareness to the topic and help educate owners to not only charge appropriately but pay fairly.
I am a tech of 25 years and have been paid on both pay scales. I will preface and say that I am scheduled for 40 hours a week and do not work more than 40 "family first". I have been flat rate for a long time now, I am physically on site 32-40 hours and always I repeat always turn 50-55 hours. I make much better money and have much more freedom on flat rate. For example if I come in and am able to turn out 12-16 hours in 6 hours I wrap it up and I go home to attend to my farm with no hassle from the owners. I am a go getter and by no means do I want to sit at an empty shop and stare at the walls to make my paycheck, I want to come in bust it out and go home. From my personal experience hourly pay encourages laziness, Flat rate provides me in excess of 25k more per year than any hourly position I have ever had. At the end of the day you have to want it and then go get it. I do not cut corners and pride myself on everything being just as perfect as possible. I also have no problem doing oil changes etc that alot of techs think they are above. They also provide me with ample work space for my abilities 3 lifts and two flats. Efficiency is key gentleman.
After 20 years of been a mechanic (technician same crap) im a auto detailer im out of flat cheap rate system , i use to be blind , is the only field i know, bla,bla,bla ,never going back , no rush , no broken bolt etc... ✌
Every hourly shop I worked at would send you home if you didn’t have work for a couple hours.
"If you work for me, we're gonna do what needs to be done" - Ok, I'm gonna put it to you like this: If you tell all your top techs that every car gets a wash, and they have to do it - and you're paying hourly so it doesn't matter - we know that's bullshit.
Because when a tech wants a raise you're going to say "well I can only pay you X, if you made me more money I could pay you more derpity derp derp ..." Ok well I would, but I'm too busy being your wash boy. It's not that the work is beneath them either. It's because you're wasting their time on menial tasks. Time is money.
Who said anyone told their top techs that?
Let me ask you, if an applicant came to you and said "I aint doin that (regardless of what that was)! You pay me to work on cars"....
How would you respond?
The task isn't even remotely relevant....the attitude is.
@@lucas-changingtheindustrypcast "It's the extended test drives, the inspections, DRIVING THE CAR THROUGH THE CAR WASH" ... Part of a comment FRM read at about 0:12 in defense of hourly - which by the way, I'm not at all opposed to.
If an applicant came to me with a shitty attitude and said "I ain't doin that, you pay me to work on cars" they wouldn't be working for me. You can set standards like - wire harnesses won't be left dangling with no clips reinstalled as part of the job whether its flat rate or not. You're going to have to pay more per hour OR flat rate in order to get the same tech to follow those standards. But you can charge more, because you're a better shop. There is a breaking point to that though.
The economic reality is - that if you're underutilizing your techs by having them perform menial tasks instead of work that's being paid at a high rate, you can't afford to pay them what they're worth. Businesses exist to make money. Techs go to work to make money. Customers pay according to value.
In an area where shops charge between 100 - 150 / hour, and techs are paid 30 - 50 / hr , (taking this to an extreme to illustrate the economics) I'm going to charge the top rate - 150 / hour (and pay techs 50), but I expect my techs to do a 1 hour full detail job on every car they do. That money has to come from somewhere. If you're making money doing it that way, another shop is going to open up next door to you, they're going to charge less, and all your best techs are going to go work there. Now you're out of business because you had tier 2 techs being paid tier 1 wages, and they're washing cars all day. OR you have to take it out of the techs money (or divy it up or whatever) - so now you can only pay 30 / hour and all your top techs leave. Customers figure out they're being charged top rate for tier 2 work and go next door where all your top techs went. Again you're out of business.
The reality is, if you're paying techs top dollar, you can't afford to have them performing menial tasks. If you expect your techs to perform a bunch of menial tasks, the tech knows you're either A. not paying what they're worth, or B. not going to be in business long.
@@notsure7874 absolutely 100% accurate - we discussed that but David cut it 🤣
We have porters and apprentices which perform those task in the shop - and in no way is it logical to have a tech performing those services.
My issue is all about the attitude.
@@lucas-changingtheindustrypcast Yeah attitude is a huge thing for me. I don't work in the auto industry (in that capacity) anymore, but my industry has a lot of parallels to be drawn. I have owned a car shop, and I still do tech work - so there are similarities, and I'm not foreign to automotive. Most of my clients are dealerships currently. I pay my techs (not auto techs) hourly. Sometimes if it's slow, I might send my top tech to a client to do some menial tasks. There is a lot of value in that for everybody. I get an experienced set of eyes on site to scope for any potential issues, the client gets benefit from that, the tech has something to do other than sit around ... It's a win all the way around. But when there's work to be done - I'll send a junior guy, or do it myself. In that regard, it's no different than having your top hourly paid tech doing oil changes when things are slow. Maybe that tech sees a problem with the brakes, and sells another job - something a lube tech would have missed.
It's a dance for sure. If you're paying a top tech to do oil changes for 3 months straight, you're losing money. It can't continue. That tech also wants to make more money - and will correctly believe there is no opportunity to do it with you, and that it's unsustainable. That tech is likely to take another job somewhere else.
Tell David to stop cutting important stuff! :D Seriously though - I didn't think you did that. I don't even know if that was you that made that comment - probably not.
@@notsure7874 in my opinion, there's so much that could be accomplished just with conversations like this between owners, management and techs.
I get there's many shops that the management and ownership won't listen - but there are so many that will!
I appreciate your outside perspective, it's really great to see things from another angle.
I've worked hourly, base plus commission and salary with bonus. Now I'm flat rate with a 35 hour guarantee. I've only had to use the guarantee once for a couple tenths, but it's definitely a different mindset. I'd rather be able to take my time, especially with diag (which I do) but I am making significantly more under this system. It does make you feel more like a number though
I’m a flate rate tech, but I also train techs and I’m making 100-150k a year working for a Mazda dealer.
I don’t have a problem with flat rate and would take a job doing it only on one condition. I get to dictate MY bill. In other words, a true subcontractor. Otherwise it needs to be like other business models, hourly pay.
Why would you call something a shortcut? Service manuals are written as to how we think the cars are gonna break not how they break.There's 2 ways of fixing cars. The way the service manual wants it done and the easy way. A lot of the procedures and service manuals tell you to do things you don't need to. So why would you do it?
Our shop is hourly when it's slow we do maintenance on the tow trucks and other things to improve the shop plus our boss flips cars on the side so there's alway those to work on
And Lucas is absolutely right it does encourage technicians on a flat rate system of pay to look for the shortcuts because they are racing the clock it's not about quality it's about money because the technician is up against the wall either get as many cars down as I can get done or I'm not going to make what I need to make
You would think shop owners would get it. Yes flat rate is about money. It's doing the most efficient quality work possible and therfore making the most money with the time you put in. Do you think techs come to work for something besides money?
If they're only about money, ancillary tasks get ignored.
That's not true I love to learned. 35 years in this business I'm always looking to increase the skill level. Why because knowledge is power. I'm in Illinois my top scale is 42 bucks an hour. I don't expect to get the easy work I expect to get the hard work. That's what they pay me for. They don't pay me 42 bucks an hour to do brake jobs.
Imagine a heart surgeon getting paid flat rate. Flat rate is nothing more than a way to pay as less as possible. Btw, there's a great study that was done on flat rate pay and it makes points you've never heard of.
So I think there is a few more points that seem to always slip through the cracks .. -whatever part of the country you are isn’t comparable to other parts of the country .. ppl speak mostly on opinions and not facts .. here’s a fact for you where I’m at the avg income is 29k per person in a 4 city area of around 100k .. versus someone in an area of 500k plus ..you cannot compare larger city techs to small town techs … where flat rate might work in some areas aren’t going to work in others .. and if your response is to just move , then a lot of times you would have change careers to make enough money to move , because you are capped in the money you make whether flat rate or not based on the area ..a lot of this doesn’t cross ppls mind because that’s not there world .what could be the highest paid shop in one area might be mid level or low in another .. can’t raise the rates if the area can’t support it
Another point is I guarantee a lot of responses on here are from ppl who have in the field a while and can hold there own .. most of these points are null and void to ppl who are new to the industry.. one of the main goals of ASOG is to try and change the culture .. flat rate promotes only hours .. pure money .. not training , not mentoring not teamwork , not nothing just hours .. I’ve seen things all over the spectrum .. someone making tons of hours while breaking 10 things on the same job .. someone cutting corners .. seem dealer techs and independent techs shotgun parts because it’s easier and more time effective then diagnosing ..you can make tons of hours as a flat rate tech and suck at your job as .. there’s a reason our pay is behind all other trades and why no one argues with a plumber but argues with us or barters ..
If our industry was in good shape the comments of ppl would have more weight .. but our perception as an industry from a consumer stand point is that we suck overall .. maybe not your shop but as a whole .. if your a selfish person and do not want to help better then industry then keep your comments to yourself
I hopped on him about this in the comments....very bias, very one sided...good point in that Mike's youtube name says it all....
btw...enjoy the format!!!!
Thanks brother!
Very well said fellas
Thank you sir!
If you want flat rate, go high line!!
Money to be made. Have morals ethics and the desire to excel, you’ll be fine.
High line doesn't necessarily fix some of the underlying problems. It does benefit you like working at the dealership would.
So, what's the incentive then for a technician who can do a 7hr interior job in 1.75, or who can do 21hrs worth of major diesel repair in 12-14 when only being offered a standard hourly rate? Specifically, how does a bonus system then work if you have other techs who do well to simply meet book time? Yes, I work in an hourly paid shop, I'm also the guy beating book time as shown(those are some of my examples from recent jobs I've been assigned). One of my frequent repair orders are for GM truck front end rebuild, ball joints, tie rods, idler arm, idler arm bracket, pitman arm, sway bar links, upper control arms and an alignment. My running time on that ticket is typically 4 hours start to finish. I don't do hack work and I don't rush. Things get put back where they belong, everything tightened to spec, vehicle is clean and all parts are greased and wiped down. The issue is when you also have slower technicians which is less helpful to net profits. My curiosity is how you have that conversation with your top technicians when they start to wonder why their performance earns potentially no recognition outside of them continuing to be employed. Not being combative or argumentative. I've just been in this situation at various places with widely varying results.
The incentive is there if there are bonus structures and consistent coaching towards a minimum level of acceptable performance. Gamification is another way.
Labor times are arbitrary anyways.
Hourly rate techs on a shop will be a problem because is call lazy tech
They get even lazier on salary, maybe?
90% of jobs are hourly....how have they survived?
@@desertsoldier41 only the 10 percent of flag rate techs making the good money
If your in a busy shop you can make a killing on Flat Rate. Most shops near me pay top techs 40-50% of labor. I'm on salary now but only works to retain people if they are paid enough and have incentives for raises based on productivity.
Paying a technician 50% of your labor rate would quickly bankrupt the shop. 😬
35 years in his business, and I've been nothing but flat rate. What I started in this business They threw me into the deep end of the pool with the sharks and told me to swim or get the hell out.
Best way to learn!! Feast or famine
I like flat rate. I make alot. I worry that if I become an hourly tech that I may slack off.. but maybe slacking off would be a good thing cuz I am running my ass off as of now.
I also worry about making enough. I avg 70 hours a week working 50 hours a week. Seem like most of the hourly shops around here work 40hrs and go home.
Also I don't care about gaurentee.. if I land on a 35 hour gaurentee at any point... I start greasing the wheels on my box. (Been in the same shop for 13 years tho)
Pay me 40 hours a week i clock out on tues for the week. Just saying. Want me to work salary or hourly then the pay needs to match. Hard for shop owners to pay over 130k a year salary.
Ive been on flat rate for over 25 years. All the hourly places where i live pay 15-20 bucks a hour. I make 30 a hour on flat rate. I guess my question is how much money do your employees make a year and what is the median income in your area fellas?.
The individual median income is 32K and 42k.
Technicians in both shops make significantly more than the median income.
I make 145k a year at a ford dealer journeyman at flat rate plus benefits willing to bet they don't even pay the top tech 100k plus benefits that
Betcha you're right. 🤣 But, the dollar amount depends on location. Relatively, Lucas and I pay very well.
Chicago area
Flat rate is simply commission pay, also called "performance based pay" by another name. Corners dont get cut because any issues arising from faulty work is taken care of by the same tech. and if he isnt there the cost of repair comes out of his pay. Also, what corner cutting tech would say, " oh I'm paid by the hour,no desire to cut corners." Think of all the business realms that pay by commission. Hourly pay means move as slow as possible to get away with, because doing less work for the same dollars is like getting a pay raise. A techs morals and scruples dont depend on dollars paid. However, not ALL businesses and kinds of profession can effectively implement commission type pay.
I think you guys just made every tech hate you after this video lol.
Nah, we aight.
35 hour guarantee doesn't lead to tension or an argument. If you continually draw guarantee That is grounds for termination.. You're not doing your job. So in other words learn how to swim or get the hell out.
Easy to say that when there is actually no work. Also many times the Warranty work undercuts hours so much it looks like the hours are low. There needs to be a federal warranty reimbursement law at the customer pay rate.
I think flat rate is a good idea if everyone is on the same leave... hourly problem there is no encouragement to do better but long term hourly is safer.... flat rate can make you or break you...the end...
I'm going to tell you this. I like Flat Rate. I dont necessarily have an issue with hourly. I have an issue when I go to a place to work and the first week it is dead and i'm getting a broom shoved in my hands. I did not sign up to push a broom although I will clean my bay area and keep my area nice and clean and organized. I sign up to work on cars all day if you dont have the work I dont stick around. I dont care if you're giving me hourly or flat rate. I dont care. If you dont have a car for me to fix all day everyday you midus well just give me the day off because I aint coming up to a building to hang out and be present all day with no work to be done.
There's always work to be done. Sometimes it isn't fixing cars, however.
@@ChangingTheIndustry when you sign up to be an auto tech that's the work you do. I ain't there to do anything but what I agreed to do. You want a servant go get you one. This ain't a fast food restaurant we ain't teenagers we are professionals no different from lawyers or doctors and last time I checked nobody expects those other professionals to do anything but the job they trained for, obtained education for, and bought equipment for. Automotive technicians are professionals and it's time we got the same respect as all the other professionals.
Flat rate is fine (if its 50%, like it was) or even 60-70%, pay WILL go up, or the shortage now will pale compared to 2 more years!
It can't be 50% anymore....
It certainly can't be 60% or 70%...
I mean....it could? But you'll have to dramatically increase your margins elsewhere.
The 30% target works just fine, it leaves room for balance up and down as needed.
Instead of reinventing the wheel, we should encourage the industry, as a whole, to get the rates up where 30% of labor is a great wage for technicians.
Then it won't matter how they are paid, as they'll be paid fairly.
It just seems like you guys just agree on your own opinions. It's down you who you work for and the income area of the customers. I will say 2 and half job in 30 mins? On hourly? With a 5 buck commission? Nah You me got till close in 30 mins aint worth the stress on my body. Done this 6 tire dually alignments with team in 30 mins. Aint worth it man...
We definitely agree with our own opinions.
I can see both sides of the argument. I feel a hybrid type system would work best. No GSTs just mechanics at a shop. Each mechanic would get a flat hourly rate by punching in and out on a clock. An then an added "bonus" or what ever you want to label it as base of the book hours each job pays. So for an example you have a master tech with every ASE, 20+ years of experience, every possibly tool you could need, can diag, can program, the best mechanic you could ever want. Give him an hourly wage of $10/hour base off his clock time at work. And then for every job he does he will obviously be given flat rate time for each job pay him for those hours at a higher rate say $15 or $20/hour ontop of what he makes from the punch in/out clock. Both of those put together I feel big you the best of both systems, flat rate and hourly. The smart hustling flat rate pros will still make a good pay check but the guys will less experience or doing something they have never done before will not starve.
That's similar to what we do! Typically $18-$30 for a flat 40. When the billed hours hit specific levels (35,40,45 etc) the hourly rate increases for the entire 40.
@@ChangingTheIndustry is that all flat rate book hours? I only ask because if the shop is a basic lube and tire shop with one flat rate mechanic, if there is only 30 hours of hours being billed, the tech will still starve no matter what. I guess what I'm trying to get across it's that one modle doesn't fit into every shop. Each shop has to find what works for them and make the most profit but also keep you employees happy
No, base pay is hourly for a full 40 hours. The bonus is on billed hours.
@@ChangingTheIndustry wish I could come work at your shop
Lol a year later thus didn't age well for "the flatrate master"
😬😬😬😬😬
Yeah im not driving through the car wash either. Not because im a jerk, but because its such a bad business decision.
Even when salary?
@@ChangingTheIndustry - I might if I thought the business case was justified but that would be really hard to do. You cant pay high skill wages for minimum wage work; that being said, if i thought it paid off with higher customer satisfaction or retention or something else, then i would.
I’d like to see FRM hour sheets.
I started in the industry working hourly and begged my employer to put me on flat rate. I think that the hourly shops should only be the quick lube places because they're business model is quick, inexpensive maintenance repairs, and the only way to make a profit is to keep the techs pay at a "set" amount every week. It's easier to account for it. Now I work in a repair shop where we do it all minus paint and body. We do everything from the oil change and brake job to heavy line and interior work , so flat rate is the best possible option for me because then the burden of my paycheck rides on me. I do not "shortcut" repairs by doing a hack job because the comebacks are my responsibility and I don't get paid for them. I have worked with guys that will cut and hack good parts on vehicles to get a job done faster that get paid flat rate, as well as I have worked with hourly guys that don't care and will destroy good parts doing a job. I think the real problem here is the employee NOT the pay terms. I'm 26 and have been doing this for the past 8 years. I'm still new to the industry, but this is why I "run" my uncle's shop as a shop foreman and we have gotten rid of the "hacks" in the shop very quickly. I don't put up with it and I have noticed that the way that we pay them has no bearing on the type of mechanic they are. Personally we let them choose how they want to get paid. The hourly rate is a guarantee for them every week, but the flat rate method puts more money in the pockets. They decide and we make it work. It can get a little confusing but the guys in the shop make it work and everyone turns a profit.
Hourly can have a production bonus which is very similar to the reward of fllat rate BUT guarantees 40 hours a week of pay.
Anything paid hourly...less than $20/hr with a production bonus is still flat rate.
@@lucas-changingtheindustrypcast that is sort of how it works here in California. Here we HAVE to at least make minimum wage for the hours that we are at the shop. The way the shops that i have worked for are setup is that if you don't meet your necessary hours for you to make your minimum paycheck then you get paid minimum wage for your 40 hours. However we also get paid double minimum because we have our own tools, so it's really not that hard to make 40 anyways in a week so you pretty much never see that minimum rate. Perks of living in California and knowing how the law sets that up for us as employees, but still i wouldn't work for another hourly shop in my life
@@martincalvillo3210 what is your concern with hourly? Our guys make more on hourly with more protection and benefits than most any facility I know of pays, even on flat rate?
@@lucas-changingtheindustrypcast i make $38/hr on flat rate. And i close at least $1500 a week take home. On hourly there is no drive, at least for me, to produce anymore. On flat rate there is
@@martincalvillo3210 I definitely agree! And it's something we definitely encounter. The culture and environment has a ton to do with it as well.
We've tried to leave the incentive aspect in place while still making sure if we're slow or they had an off week they can pay their bills.
I believe it's an obligation that an employer has to care for their people.
My parents have always cared for their staff in their business and often given far beyond what they should have to take care of people....at times almost to the point of enabling.
I don't go that far with my business - but I believe we have an obligation to our people.
I personally believe flat rate is a lazy management strategy.
Effective? Yes.
Now - the other thing we've got to bring up - flat rate with a guarantee? That's another thing.
But straight flat rate with no guarantee? I dunno man.
I would Refer the Flat Rate Master to United Auto Technician Group. They provide A Flat Rate Paycheck Protection Benefit for its members. I am sponsored by them.
Lucas you are def wrong about the hourly guys being sent home. a/b techs are flat rate, c and below are hourly. I have seen hourly guys sent home and they also have to clock out when they reach 40. Regardless if we have the work or not
Not in my shop.
And dang right I'm sending my guys home at 40 hours! Atleast I try like heck to send them home.
Life shouldn't be all work. The purpose of an auto repair shop isn't to fix all the cars, it's to be as profitable as possible 40 hours a week.
I know how to solve the car wash issue and the extended test drive issue on flat rate Pay The Tech To Do Those Things. No such thing as a free lunch. I'm not understanding why someone should do things for free. I dont get that.
I hate Flat Rate i want out of the business because of it.
Find a shop that doesn't pay flat rate.
Need help? Email us: david@asog.site or Lucas@Asog.site
Flat rate is probably not going to go anywhere anytime soon. The second we go from automotive technicians to electricians is the time to flat rate will go away. And then the price of poker's really gonna go through the roof. People think it's expensive to fix cars right now just wait. And it's my speculation that voltages are going to get so high that you're gonna have to polarize yourself to the car to work on it.
However, all of that being said. Somebody's going to realize that the problem is not the internal combustion engine. But the fuel that we're using. Some smart son of a bitch is going to come along and say. Hey, let's use this instead of that. And when Winter comes along let's add this to the mix.
Wow you guys are so wrong, hourly shops will definitely send you home!!! If it’s only one day in the week where it’s slow they’ll probably keep you on but if the whole week or month is slow they will definitely send you home, can’t even believe you guys are debating this!
If it's salary....it doesn't really matter. They still get their checks.
Most honest and ethical operators, if it's slow? They are paying their people regardless.
ACCOMPLISHED Changing the industry Podcast
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From Nick Ayivor from London England UK 🇬🇧 ⏰️ 16:57
For some reason you think because I work for you I’m not allowed to work on cars on the side😂😂😂😂😂😂😂
I mean, you do you boo boo. 😉
That Lucas guy is out of touch with realty. He is the type of guy that wants the best of both worlds. His mindset is the contributor to the mass exodus of skilled technicians from the industry.
How so? Why wouldn't you want the best of both worlds?
@@ChangingTheIndustry I like employing the best of the best. I let them choose their own pay structure. They all choose flat rate because they know they are good. My uncle owns a Nissan dealership and the techs there are hourly. Every time I walk around that shop, the employees are just numb and have no drive.
What I mean by best of both worlds is the fact that the owners who pay hourly wants employees to do what they are told and they also want control of the pay. In the reality of this control, the owner loses sight of the forest because of the trees. There are too many reasons why I would not want the best of both worlds.
@@brianrhubbard dude....you clearly don't understand the pay plans we're talking about 🙄....
The pay plan I have pays our guys based on production but gives them guaranteed 40 hours at a damn solid wage.
I'd bet we pay more than any dealership in our area....
Flat rate is the best for me i agree with f.r.m. are you going to put your best diagnostic guy on a car wash or put gas in cars hell if so you might as well have him make coffee clean the bathrooms and get lunch for everyone just plain stupid in my opinion but if my employer will do that and pay me the same ok then
This guy just got fired from his job after 9 and a half years
We saw that! We reached out to see if there was anything we could do to help?
I disagree 100%
I switched to flare rate from hourly best decision of my life my friend. You do get capped on your income. You know what your paycheck is but something that I had multiple old heads tell me that were worth their salt they don’t check their time till the last day of the pay period even on flat rate if your main focus is fixing the car then the rest will work itself out. I think you guys have a predetermined view on all flat rate which I guess is fair bc I have a predetermined view of shop owners who only pay hourly. There are a lot of shady things done like for example my shop doesn’t pay hourly employees overtime. They will up to a point just as an example when I was hourly I worked 120 hours every pay period anything over 80-90 hours should be overtime depending on how long the pay period was
The most they ever paid me for overtime was 15 hours
Sorry my friend but that’s as crooked as y’all’s hairline brother
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Both of you ever worked on cars if you haven’t you cant comment you dont know what its like to make a living day in and day out i been doing it for 20 years
I was the only tech in my shop for years...
Do you guys actually believe the stuff you say?
Why else say it?
To keep the sheep in line. The sheep aren't buying it anymore.
@@Joe.O_623 so wait....we're saying techs need to be paid more and in a more fair way....and your saying the sheeple don't buy it?
All I'm saying is that I watched that full video from the Flat Rate Master. I think his arguments were spot on in this particular case. And yes, there's nothing wrong with a tech wanting to make the most he/she can. I can tell you the younger generation isn't buying the same crap my generation has been sold. For good reason, because most of it is a lie.....
@@Joe.O_623 I'm confused - we're trying to say techs need to earn more and some his observations about hourly are short sighted.
We're hoping to encourage techs to make more and give them (and owners) tools to do that?
a good experienced mechanic can do most jobs faster than the book time
Not manufacture warranty. At least not the first 5-6 times they do it.
Even though I’m not such a flat rate fan because I see in some soft and situations just like bonuses can make for some bad shortcuts in over recommendations for work that’s not needed with certain types of people.
Flat rate could work with a group of honest technicians and the owner in a very busy shop that’s never slow and they only work on one kind of car so they get to know that one make vehicle very well never have problems and know the trick to every car without come backs. Then flat rate works out well for everybody technician gets paid well the owner makes money and the customer doesn’t get their car hacked butchered or shortcut that may cause problems later on.
Pay is a touchy subject especially when you’re dealing with different states that have different employee employer laws.
Before opening my own business I’ve worked all the different pay methods from private garage to franchise to corporate owned to dealership.
Of course the one thing the owner of the shop fears is there a technician learning that if they get a little educated and manage their time right and do side jobs that they start making more money doing side jobs and they don’t need to work for anybody that is a owners biggest fear or at least one of them.
Customers some situations end up liking a certain technician who works on their vehicle and will actually follow him to a new location or he opens up his new business and take some of his previous bosses customers.
I just wish more technicians who are really sharp and extremely talented but maybe lack peoples communication skills and not confident on themselves opening a business like when I was young.
Learn if you open your own business you could make so much more money than working under any type of pay system somebody offers you.
And with all the management software nowadays that they didn’t have 30 and 40 years ago and with the tax software makes it so easy in the shop running software and the computer with the Internet on it to access videos of how to buy other tax in the trade.
Now that I’m 30 years into my own business with today’s technology opening up and running a business is easy as passing kindergarten or class all over again this new young generation is very privileged life is so easy compared to keeping books on ledgers. Ordering parts that are special order by mail waiting for the letter to get delivered to the manufacture of a component parts house or a phone call there was no voicemail there was no text messaging there was no email.
It’s so easy nowadays if I were to close my business now and start over from zero I could build up 30 years in one year.
You live in a privileged generation of information and knowledge at your fingertips.
Being a vendor for so many shops in our San Francisco Bay area I’ve seen many technicians quit their jobs and then I hear the boss say they’ll never make it they can’t run a business.
In that technician who opened his own business and I’ve been one of my customers who calls me in to do my specialty work in his shop and I watch him grow I watched him by his building over the years buy more investment buildings buy cars and motorbikes and have fancy toys because they’re making so much more money working for themselves in a shorter time possible nowadays than 30 or 40 years ago.
Business is easy but you always have your boss say it’s difficult because he wants to keep you behind a wrench making money for him it’s the boss who can’t wrench himself who are the most afraid.