Labor Rate Podcast - Cecil Bullard - Iforabe
Why should Labor Rates be higher??
Join Rocky …, Cecil J Bullard, and Patrick Howard as they discuss Setting Labor Rates within your shop, and find out for yourself. As well as the difference between effective labor rate and posted labor rate. Recorded 8-29-18.
Hi Rocky,
I really like the attitude of your team. I was not expecting that you would see employees as an asset. I hear shop owners complain about not finding good help but are not willing to pay the price to get it. Their P&L will only allow 25% of total cost to be labor. What I heard on your podcast is that 40% is a reasonable number. (Wage, Uniforms, Matching Funds, Workman's Compensation, Unemployment) I agree that an A level tech should be making $100K a year or more, I do have a question for you. What do you do with a 50 something employee that can't keep up with the 20 somethings but has the experience and knowledge needed for the vehicles of today? They still need to make $100K but are not able to flag the hours.
Michael, you match them with lower experienced techs, in a team format. A top tech leading a team of 2-3 other techs will produce huge numbers, if management is doing its job a 3 man team like this can produce over a million a year which makes paying everyone fairly a piece of cake.
Thanks for the training Cecil, Rocky and Patrick!
Thanks for sharing, great episode! I know labor rates and technician pay will need to go up, the amount of tooling and knowledge required for new cars is staggering. I was at the dentist recently and they are only required 20 hours of training a year to keep up their certification. Not much when the only thing that changes is the technology used to clean and inspect teeth. While there is no standard for automotive, I know many (and my personal goal) go for 40 hours of training each year, double the NATEF standard for automotive instructors. And car technology jump leaps and bounds each year.
I've had the thought lately that dealerships will keep the labor rates artificially low because of their technician turn over and nearly all of them having their own "Tech Line" that deals with the difficult problems. Then if the car is unfixable, they buy it back and send it to the engineers to deal with. Whereas in the aftermarket, we don't have that option. It's going to be an interesting future for our business!