Question for Professional Mechanics:

speeder · 05-01-2018, 10:38 PM

Do you work for flat rate hours? What is the industry standard for paying someone FRH in your part of the country? 30% of shop labor rate or just some other set amount?

If you employ someone for FRH or just know the business, feel free to chime in. TIA.

fastfredracing · 05-02-2018, 02:19 AM

I despise the flat rate pay system.When I last had employees, I paid them hourly , they loved it . I cannot answer your questions, as I have been on my own for so long . and it is just me . I will probably be adding on a guy in the next 6 months, so this is something I will have to deal with .For now, I just charge shop rate x book hours for most jobs . I add , or subtract time when necessary .

I just read somewhere, that California no longer allows the flat rate pay scale .

Shaun @ Tru6 · 03:48 AM

The challenge with paying someone hourly is the younger generation does not work hard and are on their phones throughout the day.

It should be by job. "This job should take you 5 hours (I can do it in 3). Anything over 5, you don't get paid. Anything under 5, you still get paid for 5 hours of work.

Obviously you have to temper that with extraordinary situations which always come up, especially East Coast cars and rust. But a brake job (pads and rotors) on a 2007 Lexus in CA is at most a 1 hour per corner job and that's going very slowly.

asphaltgambler · 05-02-2018, 07:05 AM

I worked as a professional tech under the flat rate system for most of my 40+ career years. 1980 or so most all independent shops paid 50/50 of customer pay rate - here in Northern Va that equated to @$42 per labor hour. Dealerships, even at that time paid "X" to the tech which was a % of the customer hourly rate. The maximum of that was @32% to the highest / best technician.

Today - all that's out the window. Average customer paid hourly labor in this area = @$125.00. The best tech might be paid @$36.00/ FRH. So the math is easy........

FRH - in automotive world ensures the shop always makes bank while the tech is kept in the trailer park. Looking back in history - it was the Great Depression that sparked the 50/50 split in the automotive repair industry. It was a fair and equitable way for both shop owners and mechanics to survive. It was created out of need for survival.

But that system is broken today. There's nothing wrong with and a lot right with having employees on incentives for quality and production. The breakdown and loss as far as techs go is how the labor hours are figured today

fastfredracing · 05-02-2018, 07:38 AM

The pay scale that I liked most, was hourly + incentives on each job. It varied depending on difficulty of the job. We still got paid to sweep the floors, paint walls, maintain equipment , and clean the shop when we were slow, and it gave you a reason to hustle and make coin when it was busy . It was also a good incentive to up ones certifications, so you were able to do the big paying jobs. I was a young buck then, and really made some good money. That was about the time I dropped out of college, and decided to spin a wrench for a living. I worked my ass of for that place.

rattlsnak · rattlsnak's Garage

Quote:

Originally Posted by asphaltgambler

I worked as a professional tech under the flat rate system for most of my 40+ career years. 1980 or so most all independent shops paid 50/50 of customer pay rate - here in Northern Va that equated to @$42 per labor hour. Dealerships, even at that time paid "X" to the tech which was a % of the customer hourly rate. The maximum of that was @32% to the highest / best technician.

Today - all that's out the window. Average customer paid hourly labor in this area = @$125.00. The best tech might be paid @$36.00/ FRH. So the math is easy........

FRH - in automotive world ensures the shop always makes bank while the tech is kept in the trailer park. Looking back in history - it was the Great Depression that sparked the 50/50 split in the automotive repair industry. It was a fair and equitable way for both shop owners and mechanics to survive. It was created out of need for survival.

But that system is broken today. There's nothing wrong with and a lot right with having employees on incentives for quality and production. The breakdown and loss as far as techs go is how the labor hours are figured today

I was a FRH tech at a dealer for 20+ years and I can assure you, it has never been close to 50/50 in my experience. When I first started in the early 80s, my pay was @$11 per hour and the shop rate was @$55. After I got all of my ASE certs, I was at top pay, which was @$14. The shop rate went up every year since but the techs pay crept up very slowly to point of the split where we are today.

FRH absolutely sux in today's world. This is why it costs you $25.00 labor to replace a tail light bulb. (book time pays .2 to do that. .02 x 125 = $25.00 ) and so on.

legion · 05-02-2018, 12:38 PM

The mechanic that I actually take complicated problems to is paid his actual hours worked, which is a percentage of shop rate. Sometimes I pay him just to diagnose a problem for me, sometimes to do things that are beyond my ability. Either way, the way I see it, I'm paying for each hour of his knowledge it takes to diagnose a problem. He doesn't do the "change a part and hope that fixes it method". He's been known to pull out actual diagnostic tools beyond an OBDII scanner.

red 69 · red 69's Garage

I started in the 80,s rite out of high school 14 a hour, doing it for 40 years always made money dealers frh little shops didn't make a diff, skill and jobs and sales, and now I train and teach new mechanic, knowledge gets pay in the new tech field its a way for security...

asphaltgambler · 05-02-2018, 04:04 PM

The biggest change on how FRH's are calculated is in the past - way past - an independent firm would actually take an experienced mechanic, task them with a job they were ( supposed) not familiar with. Then do the job 3 times start to finish, then take an average of that time. Think Motor Age or Chilton manuals - who would then sell them to independent shops at a pretty hefty price.

Fast forward. This technique is just impractical today with the huge number of manufacturers and models. So all FRH today is based on manufacturer warranty time with a multiplier of @50 to 100%. Problem is warranty time is awful, especially with modern complex vehicles.

speeder · 05-02-2018, 04:10 PM

Well, I've told the story here before of the Audi dealer tech who made $300k in one year and it wasn't from working straight hours, that's for sure.

gtc · gtc's Garage

We have mechanics (technicians) ranging in age from probably 22-60. It doesn't matter how old they are, most of them will slack off if their supervisor is not around to crack the whip.
Sadly, I think some of our younger employees are not given the tools, training, and guidance they need to be successful.

Quote:

Originally Posted by Shaun @ Tru6

The challenge with paying someone hourly is the younger generation does not work hard and are on their phones throughout the day.

It should be by job. "This job should take you 5 hours (I can do it in 3). Anything over 5, you don't get paid. Anything under 5, you still get paid for 5 hours of work.

Obviously you have to temper that with extraordinary situations which always come up, especially East Coast cars and rust. But a brake job (pads and rotors) on a 2007 Lexus in CA is at most a 1 hour per corner job and that's going very slowly.

porsche tech · 05-03-2018, 02:45 AM

I started at the Porsche dealer in 1970 and the labor rate was $8.00 per hour of which the mechanic made $4.00. They also paid the majority of the health insurance premium. Neither of those lasted more than a few years as the mechanic's portion lessened. When I retired from the same dealership in 2012, I believe the rate was $135.00 with the highest paid tech making about $30 or $32/FRH and the dealership paid next to nothing for health insurance. The flat rate system was used the entire time with Porsche determining the book rate for each job (warranty rate per the book, COD somewhat higher). There was also incentives to work faster ...up to 40 hours was one rate, 50 to 60 hours was a higher rate and over 60 hours, the highest rate. Then on top of that, CSI rate for each tech played a part in his rate. The short coming of such a system is the proclivity for the tech to cut corners. It was my experience over a 42 year span that those guys didn't last long.

Shaun @ Tru6 · 05-03-2018, 03:15 AM

Quote:

Originally Posted by gtc

We have mechanics (technicians) ranging in age from probably 22-60. It doesn't matter how old they are, most of them will slack off if their supervisor is not around to crack the whip.
Sadly, I think some of our younger employees are not given the tools, training, and guidance they need to be successful.

Good workers are hard to find. I'm at 50/50 now. The ones who want to learn and grow make it all worthwhile. Same as when I coached rowing.

bell · bell's Garage

I've been flat rate for about 8 years now.....
I absolutely hate it. Don't get me wrong I do pretty good at our indy German shop, but the lack of consistent paychecks really kills the ability to be in a steady budget, 1 slow week and it knocks me down for a month....
2 slow weeks and im screwed.
Just feels like I'm always playing catch up.

fred cook · fred cook's Garage

Back in the mid 1970s, I worked as a mechanic in a specialty shop that repaired and maintained Alfa Romeos. The "line" mechanics worked on the flat rate hour basis but I worked on a salary basis. What was the difference? I did most of the engine building for the shop. After just a little while, I had gotten organized enough to build 2-3 engines per week since the work was basically repetitive. The guys doing the repair and maintenance work had to deal with unexpected things that would pop up and take up their time. On the other hand, they all had "tricks of the trade" that would allow them to save several hours (in some cases) over book time and make more money. They were happy with how they got paid, I was happy with the way I got paid! Most important, the shop made money so it stayed in business for years!

ficke · ficke's Garage

When I started in 1982 I was a flat rate mechanic, we got paid half of what the shop charged for labor.

asphaltgambler · 05-03-2018, 06:37 AM

Quote:

Originally Posted by bell

I've been flat rate for about 8 years now.....
I absolutely hate it. Don't get me wrong I do pretty good at our indy German shop, but the lack of consistent paychecks really kills the ability to be in a steady budget, 1 slow week and it knocks me down for a month....
2 slow weeks and im screwed.
Just feels like I'm always playing catch up.

^^Herein is the problem. What ever make you worked on or shop you're in, all vehicles were very simple, required frequent maintenance and broke down a lot. Which = job security and a 3+ week backlog.

Today, especially with dealerships, if a tech is consistently making over 40 hrs in a standard work week - the service manager will add another tech. The thought is that if the tech is making bank then there are opportunities for up selling that are lost. So potential $$$ are lost.

Since Techs on FRH system are 'invisible' as far as employee cost basis, most shops have no problem stacking techs and their tool boxes like cordwood to keep them starving, hungry for work.
,

legion · 05-03-2018, 07:00 AM

Kind of makes you wonder if "warranty hours" aren't designed to put the squeeze on independent shops.

fastfredracing · 05-03-2018, 07:11 AM

I would go be a greeter at Wal Mart, or a Barista at Starbucks before I would ever consider being a dealer flat rate guy again . I hated it in the 90's, and hear it has only gotten worse .
If I had to start over, I would have worked on Heavy Equipment , or at the train yard . I know a few guys who make bank, no flat rate, paid travel time, overtime, bennies, company supplied tools/ truck. etc...
Curious why you ask Dennis, you are not thinking about diving in are you ? Opening a shop?

VincentVega · 05-03-2018, 07:12 AM

I wonder about time allotments. Sometimes warranty hrs are so tight I wonder if anyone can make it. I dont do this full time but I'm not slow either. Sure there are tricks and tools to help but many jobs just take time. No chance if a something strips/breaks or needs cleaning.