New Labour Rate Details

Automotive & HD Business Management Articles.
Bob Greenwood. October 1, 2015. ( over 6 years ago ) 1,439 views

Vehicle technology keeps improving and with Aftermarket Telematics, measurement procedures must be correct to maximize productivity, profitability and client retention. There are reasons for this.

Service on need Moving a shop’s processes from preventative maintenance to service on need won’t happen overnight—we must make sure each shop individual’s role is clearly understood and measured properly to make this transition. Just as we break out parts into Aftermarket parts—Dealer Domestic/Dealer Foreign Nameplate—allowing us to evaluate personnel, equipment and training needs, same goes for the different labour components. The labour breakout will point out each shop’s competency ‘level’ required based on the number of billed hours in each category compared to what’s available. 

After 2016, the standard number of labour rates for an average Independent shop will be five—Maintenance, Diagnostic, Reflash, Tire Install and Fluid Installation. Some will move to seven—Exhaust and Mid-Duty Vehicle Servicing. Mathematical multiples for each service rate are established each year once employer burden numbers are properly studied. 

Some will think this overkill. They thought that when the parts category breakdown plus setting up the diagnostic and re-flash category were introduced, yet this information has proved invaluable in assessing a shop’s sales mix, customer/client mix,  competency levels, where to focus management’s efforts to maximize productivity and profitability.

Process focus. It’s important for management to understand their role within the business. More time is being spent working “on” the business analyzing/interpreting data, so the right decisions are made to ensure internal processes are maximized. These processes focus in on productivity, profitability and result in total client satisfaction. You build successful shop business with loyal clients who refer new business because of trust. All these results take a competent internal team executing in sync and is reflected in the shop’s door rates

Shop owners — to take a hard look at your internal measuring procedures, set up your POS system to capture and track new labour categories. Run monthly reports, analyze what was accomplished in total billed hours compared to what hours were available in each category. To maximize each category, review the processes required by the team, hold each member accountable. It’s all about total client satisfaction which leads to a productive and profitable business.

Show the Team why labour must be tracked a certain way. Explain what it means to them/their career plus the business. Ensure your Team fully understands the reason for this transition and believes it’s important so the details will be carried out each day. 

Bob Greenwood

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Bob Greenwood
Surrey, British Columbia, Canada