Automotive News Canada - April 2019 - F16

FIXED OPS JOURNAL

ADVISERS
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the first thing people think is that you're out to rob
them," Lishman says. Employees expressed initial
skepticism about the pay plan changes at his dealership, he says, "but it worked out in the long run."
Lee Harkins, CEO of the fixed ops consulting firm
M5 Management Services Inc., considers a flat-rate Harkins: Flat rate
pay plan for service advisers to be the best option. works best.
Such a pay method reflects the health of the dealership's service business and the performance of its advisers, he says, since
the advisers are paid directly on the basis of how much work they sell.
"I don't get paid until the customer is served," Harkins says. "It automatically puts more volume in the shop because I'm paid when the customer pays the bill, basically."

Pay for parts
Steve Quezada, the service manager at West Point Buick-GMC in
Houston, says he pays his advisers solely on a percentage of their total
parts and labor sales. "My advisers are in charge of their own pay and I
don't hinder them in any way," he says.
Since he joined the dealership 2½ years ago, Quezada notes, just two
of his five service advisers have left.
Quezada's pay plan includes a bonus for advisers who sell parts such
as tires and wiper blades.
Greg Dryden, vice president of client optimization for service technol-

ogy and software provider Dealer-FX, endorses that approach.
Dryden says dealerships can resolve much of the stress service advisers feel about selling work by eliminating pay practices based solely on
labor sales. Dealerships should pay advisers for both parts and labor
sales, he says, along with bonuses for maintenance penetration - the
percentage of factory-scheduled maintenance work that an adviser sells
to service customers.
Advisers should focus on selling four things, Dryden says: factory-scheduled maintenance, tires, wiper blades and alignments. He adds
that the typical U.S. dealership sells less than 30 percent of scheduled
maintenance.
"The best stores do 65 to 70 percent," he says. "So much money can be
made if they just start selling people what they need. We don't have to
sell them what they don't need to make a living."
Dayton Andrews Chrysler-Dodge-Jeep-Ram St. Petersburg, in Florida,
has adopted many of Dryden's suggestions. Ron Meany, the dealership's service and parts director, says he pays his advisers under a commission-based plan that incorporates bonuses from CSI scores and
maintenance penetration.
The pay plan, which took effect last August, requires advisers to use tablets and Dealer-FX software in the service drive, which produce immediate diagnostic reports on a vehicle's health. Advisers are accountable for
performing multipoint inspections and suggesting necessary work.
Meany's service department says customer-pay labor sales amounted to
$131,082 in February - a 55 percent increase over the same month in 2016.
"I don't know if it's less stressful for advisers," Meany says of the new
pay plan. "But I do know that it generated more for the store." 

PAY

continued from Page 12

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Though Housholder says his hybrid plan has proved successful, he
concedes it can be complicated and time-consuming to structure for individual technicians. He used to manipulate the numbers by hand, but
now uses a spreadsheet to generate appropriate pay levels and comparison charts.
"I don't know that this is the answer," Housholder says. "We've known
for 30 years that flat rate is not a great pay plan, but nobody's come up
with anything so far that can replace flat rate and not put the dealership
at risk and yet be fair for the technician."

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Whatever pay system is in place, Harkins says, dealership managers
shouldn't let the plan dictate what types of jobs technicians can do or
prevent flexibility in compensation.
For example, he proposes that if a technician is paid a flat rate of $22
for skilled maintenance work but complains that he can't finish warranty jobs in the time allotted by the manufacturer, the tech should be paid
$26 for warranty work when extra pay is justified.
Conversely, Harkins says: "Tell them, 'I'm going to pay you $18 to do
low-price maintenance work.' Pay them according to the type of work
they do. At the end of the day, the average comes out to the same
amount of money they were making, but they have more opportunities
in the number of cars to work on and can make more money.
"We have clients all over the country that use multiple [pay] rates," he
says. "They no longer have to say to techs, 'You can't do this because
you're paid too much.' " 

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Automotive News Canada - April 2019

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