Automotive News Canada - April 2019 - F11

Pay window

About three-fourths of U.S. new-vehicle
dealerships pay service technicians under
the flat rate system, but many dealers use
or have tried other pay systems. Each
has pluses and minuses, for the
dealership and the tech.

Flat rate
 Pluses: Gives techs incentives to work

faster, book more hours
 Minuses: Techs can't always beat the
clock and book more hours; pay
depends on volume, types of jobs

Straight salary
 Pluses: Techs are paid for each hour

in shop and get steady weekly pay
 Minuses: No incentives to be efficient
and productive, or to find more repairs

Salary plus bonus or commission
 Pluses: Techs get guaranteed

minimum pay and have opportunity to
earn more
 Minuses: Shop managers say techs
may not be as motivated as under flat
rate based on hours booked

Percentage of gross profit
 Pluses: Encourages techs to

work harder, find more repairs

 Minuses: Because profits are
shared, most-productive
techs might earn less
than under flat rate

Joe Dimonico, like other Reynolds Ford service
techs, works under a flat rate plan that pays a bonus
for booking more than 40 hours of labor in a week.

How 2 Oklahoma
dealerships make
flat rate pay work

ritics of the flat rate pay system say it
breeds discontent and rapid turnover
among dealership service technicians.
But Ken Hines, the fixed operations director of two Oklahoma Ford dealerships that use the
system, says it's all a question of how the flat rate
plan is managed.
Line technicians at the Reynolds Ford dealerships
are paid $23 to $30 an hour based on their experience and duties, with no guaranteed minimum. If
they book more than 40 hours in a week, they get an
extra dollar for every hour. That bonus is banked
and paid at the end of each quarter.
Hines says there's plenty of work to keep the dealerships' 34 technicians busy. He adds that "I have almost
zero turnover," in part because of the stores' efforts to
smooth out some of the bumps techs encounter.
For example, technicians often complain that
warranty repair times set by automakers are too low.
If a warranty job legitimately takes longer than the
automaker allows, Hines says, the dealership will
cover the pay difference out of its own pocket.
"I'm not going to hold my technician financially
liable because the manufacturer thinks the job
ought to pay two hours, and for whatever reason it
takes him four," Hines says. "We may not be able to
bill the manufacturer for it, but we're going to take
care of our technicians."
Line technicians at Reynolds Ford also specialize
in such areas as heavy engine repair, brake and suspension repair, or transmissions. They generally are
assigned to jobs for which they're well trained and
highly experienced, Hines says.
That increases productivity, he says, and these
technicians can switch to other types of jobs if needed. Line techs also perform used-vehicle and predelivery inspections, which help to keep them busy
during slow periods in the shop, Hines adds.
- Rick Popely

APRIL 2019

PAGE 11

Automotive News Canada - April 2019

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