We use 90+ years of pricing know-how to show you what you should expect to pay for auto repairs. If the estimate you get from your mechanic is in the green zone, you're probably golden. Flat-rate labor is applied to labor guides. A certain amount of time is involved on replacing a car starter on a certain year, make and model vehicle. If the labor guide dictates it takes 2.3 hours to replace the starter, then the customer pays for the new starter, plus the 2.3 hours of labor to install it.
Flat Rate Pay Can Influence Perception and Performance
By Tom Dwyer
By Tom Dwyer
One of the major differences between Tom Dwyer Automotive Services and many other auto repair businesses is the fact that we do not rely on Flat-Rate Compensation for our Technicians. It may not sound significant, but I think it is and I think you should know why. Good income is a critical part of a job, but it’s not the only component in a satisfying career.
Technician’s wages increased in the 80’s and 90’s as vehicles became much more technologically challenging. Technicians now needed more than basic electronics and mechanical knowledge; they needed to master the concepts of computer control for each manufacturer’s vehicle. The repair industry faced a workforce challenge; finding and maintaining the technicians required to take care of these techno-mobiles. How do new technicians move from the understanding of a lawnmower engine (the basics) to the level of ability to diagnose intermittent, no code, computer control drivability problems (a serious modern challenge)? The industry experienced a major downsizing as technicians unable to keep up with the rapidly changing vehicles dropped out. Goober doesn’t work at the fillin’ station anymore (no disrespect intended to Goober). Automotive technicians currently rank at the top of the charts for technically challenging careers; equipment, knowledge and synthesis intensive. Wages increased as the pool of skilled professionals dwindled. The vehicles became more expensive and packed with the latest electronic wizardry. There had been a serious shortage of technicians in general, and now especially of those that could quickly and accurately sort out the problems with these pre-OBD II (on board diagnostics first generation 1989 thru 1996) computer control nightmare cars. Shops performing technical repair still battle to keep the best of the best on board. “Unless all you do as a shop is basic maintenance, no real repair of any depth; then the skilled people that have the knowledge are required.”
When I say “technician” I’m referring to experienced professionals that perform multi-carline, broad range, mechanical and technical services. Professional technician’s expect and deserve good compensation for the demanding work they do. Technicians can be compensated in many ways; you will find hourly, salary, and commission based pay systems or combinations of them out there. “Flat-Rate” is a very common form of commission based compensation. I hate Flat-Rate! I don’t like the unintended consequences of Flat-Rate compensation. Production-based pay plays a part in the mindset of the Flat-Rate technician, affects the work being done and brings problems to the work environment.
Flat-Rate compensation has been around since before I started turning wrenches in 1975 and seemed to be the most common form of compensation. It is very common for auto dealerships, retail chain service providers, independent facilities and others to pay their technicians Flat-Rate compensation. The system is designed to compensate technicians for the completion of specific labor or technical operations, piece by piece, to build a paycheck. Normally the operations are coded alpha / numerically and there may be little or no description, just a code or category number. Each operation is tracked with the corresponding “book time” used for calculating technician compensation. The estimated times used to calculate Flat-Rate pay are listed in labor estimate data bases like Mitchell, AllData, and Chilton. It’s funny that the term “book time” is still used when the book has long faded away in favor of the computer data base estimates.
Flat Rate technicians are paid using labor guide time estimates not the physical time they’ve invested. Labor guide-driven pay systems may benefit the consumer by providing the data for good estimates and some potential price cap effect, but that’s not my point. My point is not based on the financial fairness of the system but the negative effects that Flat-Rate pay can have on the technician’s job perceptions, responsibilities and performance. Flat-Rate compensation can influence technician motivation, working speed, attention to detail, distractibility, and overall sense of responsibility to client and vehicle. Flat-Rate technicians are, after all, being paid to perform very specific labor operations; they are not being paid for sidetrack details. The Flat-Rate technician is paid for the completion of specific labor operations; PERIOD. The labor guide may dictate that a given alternator replacement requires 1.9 hours to perform. This time estimate will be used for technician wage calculation whether it actually takes the technician .9 hours or 2.9 hours; the mission is clear and the field of vision understandably shrinks. The quick completion of individual labor operations becomes a focus, potentially at some sacrifice for the broader concept of taking care of someone’s vehicle. Craftsmanship and attention to detail are not rewarded by Flat-Rate compensation. Exactly the opposite effect is reinforced; speed becomes the basis for reward. There are technicians that can work successfully while being paid Flat-Rate but they are the exception.
Flat-Rate pay issues are intensified in businesses with narrow areas of service coverage like tire and brake stores or chain store retailers where their specialization removes responsibility for complete vehicle care. They may not feel responsible to help the client make good, prioritized decisions based on the knowledge of the condition of the whole vehicle. When you work in a business that doesn’t do timing belt replacements, timing belts are not considered; they don’t factor into any decisions that are made for sales recommendations. Timing belts can be very expensive, extremely expensive when they fail; before a budget is blown on things that can wait it’s best to have the complete list needing consideration presented.
I have jokingly said before: “when you’re a left-side of the car, specialized car shop; you can hardly be responsible for any of those pesky right-side details and how they relate to the integrated function of the vehicle can you?” Same for a technician; when you‘re being paid on Flat-Rate to perform a brake job, understandably you are not going to take time, unpaid, for other work; you need to draw the line somewhere! It is not the Flat-Rate technician’s responsibility or concern that work is being performed on a vehicle that is economically totaled; the rolling illusion. (My term “the rolling illusion” describes the vehicle that is being driven despite its dilapidated and potentially unsafe state. The cost to perform a list of needed services and repairs outweighs the value of the vehicle.)
Flat rate makes sense to the numbers crunchers and has been used forever, it’s great for businesses; overhead and cost of labor floats with business demand level. You don’t pay a flat rate technician whilst he is idle. In fact you can have excess work force; the expense of having two flat rate technicians waiting for work to do is no more expensive for the business than one. When you’re “on Flat Rate” you ebb and flow with the business, “no turn no earn”. Sometimes there is more work than can be done and at other times you’re going home early. There can be slow periods during the year that last for weeks. Flat rate pay competition can cause problems with the staff getting along as well. Competition for the distribution of good paying work can become quite political. These unpredictable pay variables can make it pretty hard on good workers; not the way to keep your best people happy and performing for the long-term.
Auto Mechanic Labor Rate Guide Ontario Canada
Good income is an important part of worker satisfaction, but wage is only part of the picture to motivate long term performance and insure a steady competent work force. Everyone prefers to do a good job in a logical context. A professional would not remain happy in an environment that does not provide true value to the client. There is nothing worse than being forced to go thru the motions of an inconsistent, needless or poorly done thing. When things are done right there is a sense of purpose and satisfaction, it’s not just about production; it’s about value, craftsmanship and using expertise to help others. It is critical and technicians enjoy being involved with a comprehensive process; keeping a trained eye on the vehicle, helping determine the sales recommendations and involvement with the records management. Participation in a meaningful process is more fulfilling than fixing something that breaks and just sending a vehicle back out the door till the next thing fails. Technicians not paid by Flat-Rate are more likely to take the time to perform better service.
I believe working in an environment with steady compensation, an honest mission statement and clear job description serves the client best and can help keep staff loyal and happy. Salary or hourly pay helps reinforce the perception that each (complete) vehicle is our responsibility. Thru Industry leading inspections, honest advice, precise estimates, professional guaranteed service, records management, assuming the responsibility for the complete vehicle and making sure the client understands what is needed; we deliver. It is our job to keep our clients informed; what and when it’s time to repair. It is also our job to tell a client when it is time to replace a vehicle and not to repair.
Would you prefer that your automotive service technician be compensated for how fast the work is done or for successful participation in a process with a deeper purpose than just profit?
In this video, we will go over how the flat rate mechanic pay system works along with how much you can expect to make as a flat rate mechanic. We will be talking about some of the advantages and disadvantages of working as a flat-rate mechanic vs and hourly paid mechanic.
Flat rate pay is when someone is paid per job instead of a salary or per hour. This flat-rate system motivates workers to finish as many jobs as possible but can lead to sloppy work if the workers sacrifice quality for quantity. Some shops pay their mechanics a flat-rate fee.
Working a 40 hour week as a mechanic does not mean you will get paid 40 hrs. You will only get paid what you flagged for hrs that week. If you out preform you could get paid much more than 40 hrs but if it was a slow week you may have been at work for 40 hrs and still only get paid 20$ so working as a flat-rate mechanic definitely has its ups and downs.
Being a Flat Rate Mechanic – How Does it Work? And Is it Better?
Being a mechanic is a rewarding and fulfilling career. You learn invaluable and sought-after skills that allow you to provide a crucial and much-needed service to your community. Whether you are currently training to be a mechanic, or an established and practicing professionals with years of experience under your belt, you might consider to yourself the important question of how best to operate — using a flat rate mechanic pay system or an hourly pay system.
In this piece, we’ll explore the key differences between the two in how they work, as well as the advantages and drawbacks of each approach. Is flat pay better than hourly? How much do flat rate mechanics make? You’ll hopefully know more clearly by the end of this article.
How a flat rate pay system works
Put simply, the flat rate payment system is one in which the mechanic gets paid a fixed pre-determined amount rather than charging for the number of hours it took to complete that same job. For instance, let’s say a mechanic is repairing a car’s water pump. A mechanic working on an hourly rate of around $80 an hour would make 80 times the number of hours it took. A flat rate mechanic would earn the preset price — say $300 — no matter how long the job took to finish.
Put simply, the flat rate payment system is one in which the mechanic gets paid a fixed pre-determined amount rather than charging for the number of hours it took to complete that same job. For instance, let’s say a mechanic is repairing a car’s water pump. A mechanic working on an hourly rate of around $80 an hour would make 80 times the number of hours it took. A flat rate mechanic would earn the preset price — say $300 — no matter how long the job took to finish.
The price that the flat rate mechanic uses typically comes out of a repair handbook like Mitchell’s, in which will be laid out typical labor times and rates that are representative of a trained and experienced mechanic doing the same job somewhere else. They give the consumer a reference point, and most mechanics also use them as a starting point for developing prices for their services. The difference between the two payment methods can be found mostly in their flexibility — more on that later.
I’m not writing today to tell you that one system is definitely better than the other. It really depends on your experience, energy level and overall motivation to get work done. To take the above example as a demonstration, the hourly mechanic makes more money if that job was complicated or made difficult by other circumstances, forcing them to use more hours to complete it. Their total bill might come to $400 if it took four hours. The flat rate mechanic earns $300 regardless of speed, meaning that the faster they work, the better their rate of pay becomes. If they change the pump in one hour, then they’ve earned almost four times as much as the hourly mechanic. But the opposite is also true, whereby a 10-hour completion still results in just $300.
Let’s dive in and look more closely at the advantages and disadvantages of the flat rate mechanic pay system.
Advantages of a Flat Rate Pay System
- Helps experienced mechanics boost their income and grow their business
Running a flat rate pay system is all about efficiency. The more jobs you finish in a day, the higher your income will be. This can mean a serious boon to those mechanics who have accumulated years of experience on many common job types. This experience allows them to finish each task far ahead of the recommended “typical” labor time listed in an industry guide book. A job that is listed as typically being finished in 4 hours might be a 2-hour task to the mechanic with 5 or more years’ experience under their belt.
So, whether you’re a contracted mechanic working in a dealership, or a self-employed mechanic with your own shop, the flat rate system is a door to more income and/or more cash to invest and grow your business.
- It motivates and incentivizes greater productivity
Dealerships and garage owners like the idea of their employees adhering to fixed rate payment models because it incentivizes them to work harder and be more productive. It’s logical to suppose that when you are on an hourly rate, it’s in your interest to work more slowly and as inefficiently as you can. It’s a system in which the slow get rich quicker. A flat rate means the only way to financial stability is through more results. - It pushes for greater organization and efficiency
A garage that runs on pure results is one that will have to be more streamlined and organized in its daily operation. When the goal is to finish as many jobs as possible in one day, the last thing you want is for mechanics to be scrambling around looking for parts, for fluids and other items they need to complete those jobs. You’ll want a clean, well-arranged and ergonomically sound workplace in which a mechanic can operate with ease and without having to think where the next tool they need is hiding. - Makes a typical garage more profitable
Any garage operator will likely be aware that the mechanic’s bread and butter is still found in routine maintenance jobs that are uncomplicated for a professional, but still beyond the skills of a layman. Things like an oil change, air/oil filter changes, spark plug maintenance, tire rotation/changes, transmission fluid check, coolant level check etc. Many of these routine jobs can easily be done inside of an hour, which means that the hourly mechanic is selling themselves somewhat short by not having a fixed rate. The fixed rate mechanic can sail through these jobs piling up the invoices day by day.
But as I said earlier on in this article, I’m not here to tell you that one way is definitely better than the other. There are also good reasons not to adopt this payment model.
Drawbacks of a Flat Rate Pay System
- Complex jobs become a financial drain
A good mechanic knows that no matter how simple a job “typically” is, there are always many cases in which it is complicated by other circumstances. If you would normally charge a flat rate of $100, but the job ends up taking you half the day, then it quickly turns into a very unproductive and non-profitable day. This is especially true when you factor in the many running costs of your mechanic business. - Division of labor can get messy
Let’s say you’re running a garage and you employ four mechanics. All are qualified, but each has a different level of experience on the shop floor. Your instinct may, therefore, be to allocate the more expensive paying jobs to the most experienced mechanic because they can guarantee the quality within the limited timeframe. This leaves younger mechanics feeling frustrated, and also missing out on key opportunities to learn and grow. - It can negatively impact quality
Another concern with the flat rate system is that in order to meet quotas, targets or just to make more money in the short term, a mechanic will get sloppy or slapdash with their work. A car’s engine and connected parts are a finely tuned machine in which every part has to be in optimal condition in order for it work properly. Working in a rush could lead to mistakes that negatively impact your garage’s reputation, and your long-term earnings.
In conclusion
As you can see, it’s not a simple question. You have to consider all the factors of your own situation before you decide whether or not to take up a flat rate mechanic pay system. How much do flat rate mechanics make? That depends on their experience, efficiency and efficacy in their work. Is flat pay better than hourly? That depends on whether or not you have what it takes to make it work for you.
As you can see, it’s not a simple question. You have to consider all the factors of your own situation before you decide whether or not to take up a flat rate mechanic pay system. How much do flat rate mechanics make? That depends on their experience, efficiency and efficacy in their work. Is flat pay better than hourly? That depends on whether or not you have what it takes to make it work for you.
If you prefer a low-pressure work environment, in which you have the time and space to learn, grow and develop your skills carefully over time, while ensuring good quality work and customer satisfaction, then an hourly rate might be better for you. If you prefer a high-pressure, high-stakes and fast-paced garage environment where you are focused on quantity and results, then a flat rate system is the right choice.
I hope this article is helpful for those still making up their minds. Take your time and make sure you consider as many relevant factors as possible before you choose your business direction. This is not something to take lightly. Keep an eye on my blog for more articles and videos designed to help mechanics gain from the knowledge and experience of a veteran mechanic!
About Me:
I’m a master-certified mechanic (also ASE- and Diesel-certified) with 20 years’ industry experience. I started working as a mechanic when I was very young. My entire family are gear heads, and mechanic work has always been a huge and important part of my life. I’ve developed a wide range of experience across the country, working under both a flat rate system and an hourly system. I’m glad to share my experiences here on this blog and hope to provide insight to other aspiring mechanics out there.
I’m a master-certified mechanic (also ASE- and Diesel-certified) with 20 years’ industry experience. I started working as a mechanic when I was very young. My entire family are gear heads, and mechanic work has always been a huge and important part of my life. I’ve developed a wide range of experience across the country, working under both a flat rate system and an hourly system. I’m glad to share my experiences here on this blog and hope to provide insight to other aspiring mechanics out there.
Hopefully, this video will help you decide what is better for you.
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For the most common automotive fixes to the most common car and truck problems. DIY auto repair to help you save money.
For the most common automotive fixes to the most common car and truck problems. DIY auto repair to help you save money.
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Auto Mechanic Labor Rate Guide Ontario New York
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