Automotive Technician Compensation
For years I struggled to make a living as an automotive technician. Finding the right fit was hard. One big issue is that many shop owners do not see technicians as an asset. They see them as a liability. So I found myself going backward instead of forward. As technicians we all have the same dreams as other professionals. I would say most technicians want to be married with children, own a home a few cars and have some projects.
After years of searching a golden opportunity, a High School friend started a new shop just two miles up the road from me. I started with him when he opened. We established a pay plan that was good for both of us. After being there about 5 years I was making near six figures. My debts were paid, life was good. I had learned to save up a little during the Summer months so the Winters would not be so hard. Then came the business consultant. He explained that the labor force needed to be only 25% of the labor rate. Since I was making about 40% of the labor rate something had to change. The first big change was that more hourly employees were hired to handle the gravy work. Then another flat rate guy. My workload dropped to 40% of what it was. Some days I had no work. I was being squeezed. It is a process many employers use to get rid of employees. They make it so difficult, the employee quits. Because the employee quits, there is no unemployment. I took the bait. I never found a sweet deal like that again. At least as a technician.
Here and there, as I visit shops, I find shop owners that get it. They understand the struggles of life and are willing to pay premium rates to technicians that are willing to work. Rocky from Costa Mesa gets it. (Labor Rate Podcast) He wants to pay his team well. He wants them to have an abundant life. This is rare. We had all hoped that supply and demand would have fixed technicians being paid poorly. It has not. We still have College graduates being paid $15 an hour flat rate. I do not know anywhere in the USA that one can support a family on $15 an hour.
My good friend Marvin Ray and I have started a website called mechanicalliance. It is designed for the technician. I expect that it will grow into a resource where we can match top technicians with top repair shops. At the core of our site is our "Mechanics P&L". It helps technicians understand the true cost of being a technician and what it will take to make a living as one. If you are a shop owner, it may be a good idea to run the numbers and see how you match up. It may be time to change your P&L to reflect a reasonable standard for employees. In Rocky's Labor Rate Podcast, it is explained that an "A" level technician should be able to make a wage and benefit package equaling 40% of the labor rate. All three contributors Cecil, Rocky and Patrick agreed that you start building the P&L with technician labor first. After all is added in, determine your labor rate based on a 20% profit. It may be higher than others around you. If you are the best, you will always have work.
Our ultimate goal is to reboot the Master/Apprentice model. We will teach curriculum in automotive. We will teach math, chemistry, physics, history, English composition, personal finance and more. In this model a technician trains with an employer while earning a wage. At the end of 18 months he could have an associate degree, three years a bachelor degree. This is due to a 12 month learning contract instead of taking the summer off. Most of the technicians time will be spent in the repair shop. The general education classes will be offered online on the technicians schedule.
I have attached a version of the Mechanics P&L. (edited)
I welcome all to visit the site: mechanicalliance.com
I think it's admirable that you want to help the plight of technicians. I'd like to know your definition of an "A" tech? I think it's important to know that an "A" tech in one business model doesn't mean they are an "A" tech in another.
If you are a burger flipper at a national fast food restaurant there's only a certain amount you can make even though you might be the best flipper east of the Mississippi. What would you say if you walked in and ordered a Happy Meal and they said that would be $20. You'd say why is it so expensive and they'd say we have the best burger flipper on the east coast and we feel like that is a fair price based on his expertise. I'm pretty sure you'd walk out because you expect cheap food at a place like that.
Conversely, if you went to a nice restaurant that has an accomplished chef working there you expect to pay more and the accomplished chef would make more than a flipper.
In our business you should encourage people to become an accomplished chef. I can't imagine any shop owner not wanting that type of person on their staff and would pay for the opportunity.
Unfortunately for the industry some of those same shops owners you mentioned in your first paragraph feel the same way about training.
They will say: "What if we training him and he leaves?" Well, what if he isn't trained and he stays? Or:
"We only attend free training." Or:
"We don't need training." Or...…..
Fortunately there are many great shop owners out there that get it, and outweigh the ones who shouldn't be running shops.
I think that there are many shops that are in the "get by" mode. The bills are barely paid, the shop owner just scrapes by. This could all turn around if the shop owners were able to get training on how to run a business. Part of the business plan should include training and certification. If I were to manage or own a shop, I would require all my employees to have ASE certifications. Their jobs would be delivered to them based on the ASE tests they had passed. I would cover the tests and the training. It is not so much that the certification makes one smarter or better. It is an indicator that the technician and the owner cares. Proper training saves many hours of non-billable time. It gives us the skills needed.
The problem is that those owners you mention don't think they need the business training. Luckily for our industry they are in the minority but it makes the industry as a whole look bad when the general public has dealings with them and jumps to the conclusion that they are the norm rather than the exception.
I would agree with you about get by mode. But even though we have ASE as a standard, I consider it to be a minimal standard. We only interview ASE Master/L1 technicians with 10 years verifiable experience. Only about 1 in 300 applicants are qualified for a job offer. That's pretty sad in my opinion. Especially since we pay in the top 10% for our area with 5 day work weeks.
It never ceases to amaze me the amount of missing skills these technicians have. I have asked several about it and the general response is. Why learn something that doesn't make me more money? In Texas good Diagnosticians make on average about $1,800 a year more that a good R&R technician. That difference is more than consumed in the tool purchases required to be a Diagnostician. Why would anyone train to make less? If this industry doesn't change we will be gone in a few years!!
I get your point. As a business owner I value both an R&R stud and a diagnostic guy the same. One compliments the other. I think I'm a pretty good diagnostic guy but would be on welfare if I was an R&R guy.
The reason you should learn is that father time is the big equalizer. R&R guys slow down as they get older but a good drivability guy can work well into their 60's effectively.
These are great points that you make. Why does a guy that spends hours training online and in the classroom only make $1800 more than an R&R technician? When I was working at the shop it made me angry to be working on a diagnostic problem while watching the "B" or "C" technician do three brake jobs and a CV axle. The worst is that the shop policy was that the diagnostics was sold for 1/2 to 1 hour. Why would any technician let the owner know they could do diagnostics if they are just going to be handed hard jobs?
As far as ASE goes, yes it is a starting point. It would be interesting to know the ratio of technicians that have passed and keep up on the tests. A shop with 100% ASE certified technicians tells his customer that he cares about the quality of work being done. It is our industry standard. It is sad how many don't embrace it.
I work for the exact shop that you describe. We are almost always busy and I make a great living here. But if the owner would put in a little effort into this place, it would be one of those top shops. But it is run well enough and he makes just enough money without his input, and without his presence, so he is content with where the shop is. He is never here. I have tried to get him to do more to make the shop better, he just won't do anything. I listen to the RR podcast all the time and I would love to work for one of those shops that is talked about on there. Lately, I have thought a lot about opening my own shop. But I don't know that I would be happy in management.