Labor sales

What you are referring to is their effective labor rate. I don’t know if the industry has a standard in this department. I like to shoot for 80 percent of door rate overall on average. Your highest paid/skilled technicians should be collecting 100 percent, based on the difficulty and your lower rate technicians should be doing canned jobs that effectively lower your labor dollars to billable…

Thank You ! This did answer my question ,but would also be curious on others opinions .

I'm not sure what is your question.

It depends on a few factors but generally they should be able to give you 100% billable hours vs paid or more. Most really good shops operate at 110-120% efficiency. Look at it on a flat rate scale. If you're paying a tech 8 hours a day and he's producing 6 billable hours, the tech may be inefficient, the shop may be under billing the job or the tech may need more/better training. There could…

Thank you for your response!

I set in on a class 5+ years ago and that topic was brought up for discussion I do not remember who the speaker was but I do remember it was in Cincinnati, Ohio. He suggested that top tier shops only hit around %75 and most average %50 efficiency. He also stated that in a perfect world no shop could hit %100. I cannot remember all his reasonings but shop cleaning was one he hit on.

The calculation to get your effective labor rate slipped me. Anyone know off hand?

Ken if your getting 75% production I'd say your doing well that percentage would then be calculated into your other cost of doing business to come up with what your hourly rate should be.