How are you paying your technicians?
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.