Sorting out technician pay and finding a fair compromise

If it always worked out perfectly, shops would just pay technicians a flat rate, where pay is dependent on billable hours. This scenario incentivizes technicians to be more productive; they only earn when the shop is getting paid. Furthermore, it promotes technician efficiency. If a tech can get a four-hour job done in three hours, they still get paid for all four. Super efficient and proficient technicians can make a lot of money.

Why flat rate fell flat

One of the downsides of flat rate is that a technician doesn’t get paid unless there’s work to be had. That can lead to income volatility, especially during slow periods or when engaged in highly complex jobs. Not every technician will be accepting of this. In fact, Cooper said most won’t—particularly when working for the typical independent repair shop.

“If I were a technician looking for a job, I just don’t know that I would trust a small, independent shop to keep me busy,” Cooper related. “Flat rate is just too risky for most technicians.”

Flat rate also presents some potential downsides from the shop’s perspective. Since emphasis is on speed, shops could see an uptick in misdiagnosis and comebacks. At a dealership or independent repair shop, a technician has to eat that comeback time, so it sort of polices itself. But for a fleet’s internal maintenance department, the manager often needs to do quite a bit of policing.

“In a fleet shop, there needs to be consistent measuring, monitoring, and coaching of the technicians to remind them that they need to do the jobs the right way and not get in too much of a hurry,” Eggen said.

Another potential downside of paying flat rate is that morale could suffer if some technicians feel like others are getting all the good jobs. Morale could also take a hit if technicians feel like the SRTs are unrealistic. That’s why Eggen said developing your own times is not a bad idea. If that isn’t practical, rely on SRTs from a reputable, independent source such as the Technology & Maintenance Council (TMC), MOTOR, ALLDATA, Mitchell 1, Diesel Laptops, and/or others.

“Technicians also have to be given the right tools in the right place so they can do their jobs the right way,” Eggen added. “The parts room is a huge factor. If the right parts aren’t in inventory, how do you expect the technician to keep moving and get paid?”

The role of the service writer is also important. The service writer, Eggen pointed out, is typically the first person to have a conversation with the driver. “The writer must do a good initial diagnosis to get that express assessment done correctly and written up clearly,” Eggen said. “Then the technician can get a good jump on what they need to do.”

Could all of this lead to a shop culture where support staff develop animosity for the technicians? It certainly could if things were left to fester.

Guzman Auto’s Gonzales noted a time when a service advisor mistyped labor times and then had an hourly C-level tech perform the work to decrease the labor cost, instead of communicating the mistake to the customer.

“This frustrated the A technician who completed the diagnosis because it would short his labor time,” Gonzales said. Of course, the shop owner quickly addressed this, telling the advisor he would have to pay for mistakes like that out of his own pocket in the future, and not take money from the tech.

“That’s not a fun conversation to have, but you’re taking food off a hardworking man’s table when you do that,” Gonzales asserted.

Another thing to watch is having flat-rate techs perform jobs outside of their primary role of producing revenue, such as trying to find an elusive repair part.

“Why on earth would a shop have its technicians running around chasing parts?” Cooper asked. “Techs shouldn’t be doing anything that takes a wrench out of their hand, and everyone needs to understand that.”

That’s not to suggest that a flat-rate pay structure is the only way to achieve maximum productivity. When you think about the main objectives of paying techs flat rate in the first place, hybrid compensation structures also make a lot of sense.

How technicians really become “rich”

A healthy, predictable paycheck is certainly essential to recruiting and retaining technicians today. But it’s only one piece of the puzzle.

Think about a young person just starting their career. In fact, take another step back and think about why they even enrolled in a diesel program at a technical college in the first place. According to Tyler Rhodes, education manager at the Universal Technical Institute campus in Avondale, Arizona, many students were told they could make a good living as a diesel technician and would have an easy time landing a job.

“Beyond that, there isn’t a whole lot of thought that goes into how they are going to earn this great living,” Rhodes said.

To that point, most emerging technicians don’t really understand what flat rate is, according to Rhodes. But they do understand what being valued feels like.

“When I first got into the auto repair industry many years ago, there were no tool allowances or tuition reimbursements,” Rhodes said. “In today’s world, many employers are offering these types of things in some form, along with things like relocation allowances. Everyone is competing for the same technicians. In most cases, everybody knows what they need to be paying as a starting wage. So those other types of benefits can help.”

According to data presented in Fullbay’s report, two-thirds of shops offer health insurance and provide bonus opportunities for technicians, 59% provide some level of assistance for purchasing tools, 44% offer flexible scheduling, and 36% provide a matching 401k program.

Ready for one more statistic? The Fullbay report suggests that roughly two-thirds of technicians would prefer to stay right where they are. Given that, it’s really up to a shop to give technicians a reason to stay.

“We have to think past the binary idea that compensation is either hourly or flat rate,” TechForce Foundation’s Clark said. “The more systemic issue is how we elevate the technician profession by improving workplace culture, conditions, and total compensation. That means aligning the need for skilled labor with the needs of skilled labor—ensuring that techs are respected, supported, and inspired to stay and grow in the industry.”