One key reason for a current shortage of service technicians is the result of the flat-rate compensation plan, a contentious payment system that assigns standard times to complete a repair job.
Many technicians assert that the flat-rate compensation plan under-compensates them in relation to other industries requiring similar skillsets.
Automotive Fleet received feedback from fleet professionals regarding the payment structure following a recent blog that was posted online.
Here is what some readers had to say:
Sympathize with the Techs
The blog entitled “Unpopular Compensation Contributes to Shortage of Repair Techs,” was a very good article. I can sympathize with the technician, especially a veteran who may like his or her job and want to stay on past retirement age, but struggle to do so for lack of training. Most big companies are slow to recognize the needs of their employees and will not assist in the ongoing training courses, which is a real shame. In the end, both the employee and the company suffer. While labor rates are extremely high, the bulk of the revenue goes to the company with the employee getting just his or her wage. A few dollars more to the employee, without gouging the end-user – the customer – will not jeopardize the profits of the company as the goodwill from the employee and the customer will be recognized and more work should flow to the shop. It is no secret that dealers have charged more for services that can easily be purchased through an independent shop owner or a national account provider that truly values and appreciates the work, plus they are willing to help with ongoing training.
-Bob Martines, President/CEO, Corporate Claims Management, Ivyland, Pa.
Rotten to the Core
Another of the many downsides to flat-rate compensation is that it disincentives experienced technicians from wanting help newer technicians learn the correct way to diagnose and repair a vehicle. Rather than viewing co-workers as part of the team, they are competing with each other for the same pot. Any time spent helping a fellow mechanic is unpaid, and it will result in helping give your competition an edge over yourself. It also encourages techs to buddy up with and bribe advisors to get the gravy work.
The whole system is completely rotten to the core, and this is why we have so many disgruntled and underdeveloped technicians in the field today. Despite the fact that I was always at 125%-160% efficiency at flat rate, I could not get out of that caustic environment fast enough. Fortunately, I was able to get a civil service fleet job when I had reached my limit (with actual benefits, sick time, paid vacations, and a guaranteed hourly wage). Only one of the people I kept in touch with after graduating from a well-known trade school actually still worked in the field a year later, but even he got out in under a decade.
-Kristina Guevarra, Equipment Repair Supervisor, City of Los Angeles Fleet Services, Los Angeles, Calif.
Work Quality Suffers
The blog on flat-rate compensation was a good article, but I noticed that quality of work wasn’t mentioned. When the repair time is predetermined, shortcuts are the go-to. Seldom are fasteners torqued properly and impact wrench or ratchet are the norm. Ever notice all sorts of parts along a road? Tire shops love it, they get to replace a tire punctured by a spark plug because to save time it was left in the engine bay to fall in the street instead of being discarded.
-Ken Gillies, CTP, Senior Work Truck Consultant, Element Fleet Management, Hopkins, Minn.
Need Wage Predictability
The blog on flat-rate compensation contributing to the shortage of techs was a great read! I am glad to see that Automotive Fleet is out-in-front to try to stem future service-tech availability problems. I have noticed lately that there has been the furloughing of techs from national account stores, which may push some into finding new careers with more stability and predictability in pay.
-Joe Pelehach, Vice President, Motorlease, Farmington, Conn.
Cost to Keep Techs Trained
Not sure I agree with the argument that the actual tech pay is disproportionate to the shop rate. I have worked my entire life in this industry, mostly at dealers. I have always been compensated for my training, all the way back to the 1990s. What most people don’t realize is the amount of cost to the dealer to keep those guys trained. For example, to get a tech who is first of all capable of applying his training from point 0 to Detroit DD15 certified. It takes 40 to 60 hours of online prerequisites and then about four to five weeks of classroom training. I calculated that the cost of class, tech wage, travel expense, and lost revenue for that tech being off the floor is around $7,000 per week. That’s just for engine certification. Of course, everyone wants paid vacation, that money has to come from somewhere. What about benefits and insurance? Everyone looks at tech hours as if there is no cost to them, but those hours have a ton of cost involved.
-David Hunt, Service Manager, Inland Truck Parts Company, Omaha, Neb.
Will They Stay?
The blog “Unpopular Flat-Rate Compensation Contributes to Shortage of Repair Techs” really puts into prospective what most of us veteran techs are going through. I have 45-plus years of experience working on commercial trucks and heavy equipment and I personally don’t care for the changes happening in the heavy field. It is very difficult to get a younger tech to troubleshoot mechanical issues with a lot of the older and newer equipment and if you can find one that is willing to learn, will they stay?
-Ralf Garvin, Maintenance Shop Superintendent, Genest Concrete Works, Inc., Sanford, Me.
If you would like to join in the conversation, please contact AF Editor Mike Antich at [email protected]