How are you paying your technicians?

Management Lucas Deal February 4, 2013

No matter what the position, compensation matters. When you have quality employees, it’s important to have a payment structure in place to keep them — especially in the heavy-duty aftermarket where good technicians are hard to come by.

Today, the two most popular methods for compensating service technicians are a flat-rate system and an hourly system. Each has advantages that can work in your business.

The flat-rate system is gaining popularity in the industry. The system works by charging customers and paying technicians for an equal amount of hours when providing service. If a service provider quotes a fleet two hours to replace two brake shoes, the technician making the repair is then paid two hours in wage to complete the job.

According to Mark Martincic at KEA Advisors, a heavy-duty consulting group, the flat-rate system is a positive influence on technicians because it motivates them to complete work in the time billed on repair invoices.

“The [flat-rate] system is a great way to increase productivity,” he says, “because it allows a service provider to equalize the labor it bills with the labor its technicians provide.”

Under the system, if a technician is paid for two hours of work and completes a job in an hour, he is still paid for two hours. However, if a two-hour job takes three hours, he is only paid for two hours.

Katie Hopkins, executive vice president at Truck Centers, Inc., says her ­company has been using a flat-rate system to pay its technicians since the 1980s, citing benefits that speak for themselves.

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  • Marybeth Snyder

    Good article, one that discusses the subject that keeps coming back to us year after year. Not all Technicians are good at the flat-rate challenge and yet they produce good quality work at a nice steady pace. May need to pay different Tech’s in different ways. I wonder how employment law applies to the flat rate pay plan. Any input on that?

  • Andy Diesel Power

    I don’t care for the flat rate plan myself. Ive been a Tech for 31 years now and I have never made flat rate times because I take pride in my work quality and appearance (to include pressure washing, paint, zip ties, etc). Flat rate is based on perfect conditions and adds about a 10 % margin for error, I’ve known too many mechanics to reuse gaskets because they forgot one or the parts dept was too far away to go order one, that takes time, not drain both drain plugs on engines that have two plugs, just because it takes more time, not change drums on brake jobs because they were inboard drums, like the lady said below, it might work for some people. And then the older techs do the easier work because it pays better, for instance, an older tech should be performing the inframe overhaul instead of performing six jobs in one day for two hours each, I wouldnt want the tech that was two years out of tech school performing an overhaul on my ISX Cummins. People need to have been there, done that, before they can comment on something.

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