Labor is one of the biggest expenses in a heavy-duty repair shop. Therefore, how profitable a shop is depends on the techs and how well they do their job. Unfortunately, the majority of techs don’t realize their full potential. In 2015, only around 5 percent of shop owners surveyed said their tech’s efficiency was above 120 percent. If there were a way to increase technician efficiency, wouldn’t you gladly do it? Fortunately, there is, and it can work with any shop, no matter where your techs are on the competency and effectiveness scale.
What Matters Most?
When you set out to increase technician efficiency, there are two things that matter most:
- how many hours you pay your techs
- how many hours you invoice
Once you know those numbers, you can figure out how well your techs are already doing. Just plug plugging them into one simple formula:
INVOICED HOURS/CLOCKED HOURS
In any given week, let’s say you pay a tech to work 40 hours and bill customers for 30 hours of work. 30 divided by 40 tells you your tech is only 75 percent efficient. That means there’s room to improve. You want to maximize what you can bill the customer while minimizing how long it takes to complete the job without the risk of comebacks. The bare minimum you should be billing for 40 hours of work is 40 hours on customer invoices. However, it’s realistic to bill 60 hours or more for 40 hours of work, which calculates out to 150 percent efficiency.
It’s not always about beating the clock. Most of the time, it’s about getting more jobs done in a short space of time. Techs should have multiple jobs going at once, like dropping the oil on one truck while replacing the starter on another one. Clocking in on two jobs at once allows you to invoice two jobs for the same one or two hours worked.
Use our shop profitability calculator to see how much an impact efficiency has on your shop’s profits.
Okay, so you get what matters most, and can even see that stacking jobs is the simplest way to increase technician efficiency. You need to take it a step further, though. Measuring tech efficiency lets you see how adept your techs are so you can take steps to optimize the workflow. You’ll want to measure the number of hours your tech is at work, the number of hours you invoice customers, and the number of hours your tech spends on each job.
We’ve already covered comparing hours at work to hours invoiced to figure tech efficiency. However, comparing hours at work to hours spent on jobs lets you see utilization. Since there’s always time spent in staff meetings, communicating with customers and other employees, and breaks, it’s not realistic to utilize a tech’s time 100 percent. But it’s reasonable to strive for 85 to 90 percent utilization, and increasing tech efficiency can achieve that.
Paying attention to utilization as well as efficiency helps you make critical decisions. For example, if you have more work than you can handle, but your techs are only 60 to 70 percent utilized, you have an efficiency problem. On the other hand, if everyone is above 85 percent utilized, it’s probably time to hire another tech.
Increase Technician Efficiency by Keeping Score
Have you ever been to a ball game where no one keeps score? The action doesn’t hold the crowd’s attention and, even if you do watch what’s going on, it’s not very exciting. Who’s ahead? Which team is more skilled? Who will win? Who cares?
It’s the same in a heavy-duty shop. Without scores, no one pays attention. Research shows that leaderboards and real-time performance reports motivates employees and positively affects competence. That’s why it’s essential to let everyone know how they’re doing in real time. Not a week or a month later, and not just once a year at an annual review.
Techs need to see how they’re doing in real time, compared to their personal best as well as compared to other techs. Showing them those stats keeps everyone engaged and encourages some friendly competition between techs. You can incentivize gamification, too, to increase technician efficiency. Buy everyone lunch on Friday if the whole crew has maintained 110 percent or more efficiency throughout the week, for example. Incentives like that increase morale and efficiency without creating rivalry.
Tie Compensation to Efficiency
Another way to increase technician efficiency is to tie it to compensation. It doesn’t require an elaborate plan, either. Paying techs a flat rate or hourly wages plus an efficiency bonus are the simplest, most effective ways to link compensation to efficiency. It’s true—one size doesn’t fit all, so you have to consider all angles of both plans to see which one will work best for your shop.
If a flat rate is legal in your area, it’s an effective way to align incentives of techs perfectly with your goals as a shop owner. Tech’s time will be beside the point because you’ll base your labor rate on the shop’s income. Even if you prefer to pay techs an hourly wage, though, implementing a performance bonus will help increase technician efficiency.
You can put one threshold into effect, like giving a $100 bonus to techs reaching 110 percent efficiency in a given month. Alternatively, you could use a tiered bonus system that kicks in with $50 at 110 percent efficiency, but goes to $100 for 120 percent and $150 for 130 percent, etc. Making bonuses available to all techs puts the earning power in their hands and encourages them to do their best. Plus, it keeps the playing field level, fostering team spirit and friendly competition instead of conflict.
Standardizing Your Processes
Having standard steps laid out for procedures helps heavy-duty repair shops run smoother and avoids a lot of headaches. Create step-by-step procedures for common repairs and PMs so techs can roll through them effortlessly. Interview your star techs and establish more in-depth procedures based on how they complete a wheel seal, for instance. Then, get everyone on the same page, so all your techs are following the same processes for all jobs. Standardizing regulates time spent on services, reduces comebacks and, most important, will increase technician efficiency.
Take note—standardizing isn’t a one and done process—it’s ongoing. Whenever a tweak or adjustment improves an existing procedure, revise it and get everyone on board. Never stop improving.
Looking for help to increase technician efficiency? Fullbay does a lot of the footwork for you, with features like employee stats reports, real-time data on jobs in progress, and access to specific work orders to see how efficient each tech was on individual jobs. Techs can even clock in on the software so you can track time spent on jobs—and those are just a few features you’ll use daily. Fill in the form below to give Fullbay a try and give your shop’s efficiency a boost.
Request a Demo