Is the flat rate pay system for techs killing recruitment?

Ty Bullard
My question today is the current flat rate pay system that i have in my shop killing my recruitment process for hiring young talented next generation technicians? I was walking by one of our service advisors today and we were talking about one of our quality techs looking at leaving for a plant job and he expressed how our industry is going to have to change in order to recruit and keep quality technicians. I thought this was an interesting thought that got me thinking. Is this true? If so what are the reasons? Also if true what does the new pay structure look like if we do have to change? If not true what are the things that we do need to change or enhance to help the already difficult task of recruiting technicians? Thanks for the help
Steve Tuschen
It depends. If you look at aftermarket places Midas, Pep Boys, Tire shop, you name it they are either paid hourly with a bonus for production, some are even salary and bonus. I am slowly moving my technicians to a commission pay plan where they are paid a percentage of the total service department sales. When I sit down with any potential employee and we get into the pay talk I ask them how they want to get paid and why. I walk them through the pay plans I have explaining the pros and cons of each plan and address there concerns. If there pay plan makes sense for both parties try it out for 90 days. Maybe they will have insight. We talk about transparency with the customer, we have to have transparency with our employee's as well, my current pay plan that I am rolling out came from my techs, most dealerships do not give raises to techs, they are told they need to produce more and every few years they get a small bump, unless you are union(which is a whole other ball of wax). They liked the idea of getting a raise as they grow the business, it works for me as it locks in my sales to gross ratio, if we discount the tech participates. It builds a team atmosphere as they will give up work to someone else if they can get it done faster based on knowledge or workload so we work in getting the cars done the most efficiently and they all get a piece of every vehicle that comes in the shop, if a tech lags the other techs will police and help as it affects them as well. Just like anything we do, you are going to back into the numbers so they make sense for the business and ensure the employee can be rewarded for there contribution in the store's success.
Denim Simkins
In addition to pay there are many factors that an employee will take into consideration when making an employment decision. Training, advancement, growth, workplace environment, structure, leadership just to name a few. Technician pay over my career has had some overall increases in rate but not at the same rate as labor sales rate. Obviously there is an economic model that everyone is trying to adhere to in order to keep the gross numbers where they need to be.
Denim Simkins
I came across a great article last night and it made several good points but there was a statement made that made a lot of sense "People don't leave companies, they leave bosses" and really the point of the article was focused towards the training process starting early on and building future leaders within the organization. I feel this has some application to technicians in the sense that outside of factory technical training what other leadership type training is offered to help engage the employee for the bigger goal of the store.
Clint Jones
I don't really know what the answer is. I certainly feel for you @Ty. I am in a heavy manufacturing community, and a technician with a couple years experience is exactly what the set up and maint departments in these factories are looking for. They step into these jobs with full benefits, 40 hour work week, retirement, insurance package, signing bonuses, and $50,000+ salaries. I like the creativity that Steve Tuschen uses in his store. I do see some challenges within the system that he described, but I would guess that he has future growth built in. My first question is what does he do when he adds a technician. In effect, every other tech would take a pay cut during the transition period due to lack of efficiency with the new technician. The other thing is that every time you get a warranty increase or raise your labor rate......every tech gets a raise. This process really doesn't have anything to do with the technician. The Advisor...different story. When you raise the rate, the advisor is the one that takes the heat. Nonetheless, as I said, I am sure that Steve has answers for that. Do I believe that the FRH pay system is making it harder to attract young technicians...yes. There is no doubt in my mind. Sales departments all over the country have had to go to salary plus systems in order to attract young talent in the sales departments. I see no reason that service departments would be immune to the challenges of commission based pay. I get the basic idea of the article that Denim is describing, but quite frankly do not completely agree. I believe that a good boss is a tremendous asset and can be the glue that bonds a department together...if all of the other variables are in place and favorable to a given employee/co-worker. I don't believe that an employee will stay in a pay plan that they are not comfortable with...because they have a good boss.
Steve Tuschen
Clint, actually when I add a tech everyone gets raise as it is additional hours we didn't have to sell prior. You are correct that every tech get's a raise when we increase the door rate, they also participate anytime we give a discount. When you increase the door rate most techs come running for a raise as they haven't had a raise in 5 or 6 years so you usually end up giving one at about the same time, if your percentages are where you want them to then it doesn't matter if your door rate is 50 or 250 the percentage is the same. I do agree with you in pay plans have to change to attract new workers but you also have to be careful when changing for current staff as two things people hate most change in general and messing with pay. I do agree with Denim, people will stay if they like there boss as they aren't even looking if they believe they are taken care of. The problem is the new people coming in you can have the best boss in the world but if the potential employee can't see the potential they will never experience how good of a boss they would be working for, which makes it a mute point, or that is my thought atleast.

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