In virtually every 20 Group meeting I facilitate, there is one question that constantly gets asked. How do I find more qualified technicians, get more productivity out of the ones I have, and make sure I am retaining them? Recruiting and retaining technicians has become a significant challenge to a lot of dealerships across the country. The ideal way to staff technicians is to train, develop, and advance your best express lube technicians through the shop into a more advanced technician role. This can be a very effective method for keeping good techs in your shop and allows you to focus your hiring efforts on finding the next best entry level employee. It also can help improve your retention, as it provides a clear career path for your less experienced or millennial workers.
However, the more immediate approach to improving the techs you currently have working in the shop, is improving their productivity. To get started, you need to track how much time they’re wasting during the day. There are several areas within your operation that can limit the amount of technician productivity.
Some examples of these limitations are:
Finding the vehicle on the lot
Getting the parts from the parts department
Communication with the service advisors
Waiting for authorization
Some of these items can be quickly remedied within your shop. But what we really want to know is how does this lost time effect your bottom line. How much money is truly being missed by each technician in your shop when losing a half hour per day, 15 minutes a day, or even 6 minutes a day? We can all agree, that when our technicians have the vehicle, keys, parts, and authorization, they should be extremely constructive. Now let’s look at what this added productivity can do for you.
How to Calculate:
Total Gross Profit per Customer Pay Labor Hour x Number of Technicians = 1 additional hour per technician per day (A)
Take (A) times 0.5 = additional gross profit per technician per day at an additional half hour
Take (A) times 0.25 = additional gross profit per technician per day at an additional quarter hour
Take (A) times 0.10 = additional gross profit per technician per day at an additional 6 minutes
$117.50 (Total Gross Profit per Labor Hour) x 19 Technicians = $2,232.50 per tech per day at an additional 1 hour
$117.50 x 19 technicians x 0.5 = $1,116.21 per tech per day at an additional half hour per day
$117.50 x 19 technicians x 0.25 = $558.13 per tech per day at an additional 15 minutes per day
$117.50 x 19 technicians x 0.10 = $223.25 per tech per day at an additional 6 minutes per day
Total Dollars Based on 26 Working Days Per Month
1 hour per tech = $58,045/mo. or $696,540/year
0.5 hours per tech = $29,021/mo. or $348,257/year
15 minutes per tech = $14,511.38/mo. or $174,135.56/year
6 minutes per tech = $5,804.50/mo. or $69,654/year
As many dealers will tell you, something small can end up earning you a big payout. Adding just 6 minutes per person per day can wind up adding almost $70,000 in added revenue per year. Now the challenge is evaluating our processes to ensure you are providing them with the necessary tools to help them generate more time in the shop.
After you read this, take a walk through your shop and see which technicians are working on cars and which ones are searching for the necessary tools to do their job. With dollars like these, finding ways to keep them busy will help in recruiting other technicians (word of mouth), retaining technicians (they are working and earning more money), and getting those entry level technicians excited to take the necessary training steps to become a higher skilled technician.
Learn more from Chris and our other automotive consultants by joining a 20 Group, scheduling dealership consulting, or registering for automotive training in the NCM Institute. You'll be glad you did!