The Flat Rate System

The Flat Rate System


[Music] greetings viewers and welcome to another episode of ET c g1 here we talk about things other and it’s these are not repair videos these are opinions and I throw out my opinions and ask for yours and we all get along and life is beautiful all the time admit the last couple of videos I’ve had a lot of people say what do you think of the flat rate system and that’s a really great topic for discussion so let’s talk about that today the flat rate system for those of you that are not familiar with the flat rate system the flat rate system is probably how I would say 90 some percent of your technicians out in the world get paid and basically what it is is for every job that is done on a vehicle just about every job that is done on a vehicle someone has sat down and come up with a labor time for how long that job should take that shop that that technician works for has an hourly labor rate and they base basically how much they charge you for labor on that estimate so there’s there’s a book it’s I believe it’s called a Mitchell book it’s probably the most popular I’m sure there are others that are out there and I’m sure other countries may have different labor times not really sure on that maybe you can comment on that on this video but the bottom line is is there’s a book somewhere that basically has a breakdown of how long it takes to do XY and Z so for an oil change commonly that’s like 3/10 for you know a minor service or a change tire rotation that’s like 5 tents like a half an hour for you know replacing a cabin filter maybe that’s an hour you get you get the idea so you know to do an alignment there’s a certain labor time so for just about every standard automotive action you have there is a time associated with that so as a technician you get paid by how much flag times so in other words when you’re done with the job what you do is you write down how many billable hours that you performed work on that vehicle so if you did an oil change and you did that cabin air filter line say comes out to like 1.3 hours you fill out like a little flag or somebody does somewhere maybe it’s a service writer fills that out and puts that on the back of the work order and that’s what you get paid for so and here’s the thing it can work both ways like say for instance you can get that cabin air filter done in about ten minutes well you got paid an hour for it awesome because if you did like you know eight of those in a day you just got paid for that day technically and it took you an hour to do it so four in one hour you can make an entire day’s paycheck conversely say you get a problem in and that problem could come in many shapes and forms I’ve had days where I’ve had the entire car disassembled literally disassembled looking at all that scratching my head going hmm not getting paid for this you can’t spend all day on something and make an hour a half hour so that that all needs to balance out and what this does okay this is the purpose of this video now that you understand what the flat rate system is this is how it works in the workplace at least as far as how I’ve seen as a as a technician you’re always trying to get ahead you’re always trying to beat that booked time because let’s face it that’s human nature you want to do as good as you possibly can you’re not paid on a salary system your pet you don’t get X amount every week for your paycheck you get X amount based on how many hours you build well here’s the thing for your employer for every hour you bill they also get a piece of that so the more hours you bill they’re motivated that or let’s put it this way the more hours you build the more money they make so it’s not just you making money it’s your employer making money and for the employer works out because it motivates a person to get some work done and as a shop owner that’s what you want you want to be profitable so the best way to motivate that your employees is you know put that little carrot in front of you that’s what the flat rate system does the flat rate system also kills quality you you’ll find some technicians cutting corners let’s go back to bad mechanics the whole reason why this we’re having this flat rate discussion because a lot of it may be based on that because you can’t you can’t take something like auto repair which can vary so much I mean yeah and you can’t do this cookie cutter thing to it you can’t say that ok every oil change is gonna bill it 3/10 what if you go to the oil change and you pull the drain plug out and stripped well then you watch my video on how to repair a drain plug and it stripped a little strip pan and hopefully you can move on with your life hopefully that saved you some time but that’s just a for-instance but that’s more common than not so for things to go off without a hitch like they’re supposed to go it’s actually more rare than things you know and then then things not going well so it’s more likely that things are not going to go well during the course of a repair than it is for them to go well we kind of talked about that and some of the other videos also so yeah my opinion on it they used to you know my service writer used to say wow you got that done fast and I resented that because that to me put me in that place where I’m cutting corners I didn’t cut corners that’s the thing is working at a dealer you can do this because it is closer to the cookie cutter thing I mean it’s not always but it’s the closest you’re gonna get to that cookie cutter you know machinery though it to where car comes in it needs a certain it needs actually you know it needs actually to do it because you’ve seen it a hundred times the guy that you work with has seen it a hundred times and but he knows that that’s how it goes including the service writer so the service writer already has you diagnosed before it even rolls into your Bay fine whatever you’re gonna resent that but you know at the end of the day it’s just how the world works you got that done really fast well no I didn’t I got it done efficiently and when I when I say that what I’m speaking to is I didn’t cut the corners I found a way to do the job efficiently I found a way to where I don’t have to remove this to do this take take my admission diagnosis video for instance instead of just throwing a distributor in something which is too easy instead of trying to figure out if it’s a cool air attack titer just sell the whole distributor and be done with it so you pop the whole thing out and be done well here I am pulling a distributor cap off coming up with a test that you figure out just like that is it are we getting a primary signal or not oh you did that fast no I did it efficiently and if you work efficiently as a technician you can be a quality technician and produce quality work and you can also make some decent money because I’m not gonna lie to you I made some really decent money I mean my average my average work week was I’d say 50 ish hours somewhere in that neighborhood and I’m gonna add another element in the dealership where I worked it was an individual flat rate that can get kind of cutthroat at a dealership you got a lot of guys all competing for a paycheck individual flat rate can be ruthless especially if you know there’s the workplace dynamics not just with their technicians but with your service writers that can be a debacle that’s a cool word but what I worked on was a team system and the way the team flat-rate system works is you have a group of guys in my cases four of us that are all working for the same paycheck so in other words I bill 20 hours in a particular day god working next to me bills 30 hours the guy working next to him bills 15 you add all those hours up the end of the day and split them up for waves evenly so it doesn’t matter if you did all the work the other guys that didn’t do any work get paid and vice-versa so that can create its own set of problems and for management on that stage it’s like it’s something that’s self-policing let’s say I don’t know if that’s self policing or not uh it was difficult sometimes and other times where like say I had some mystery electrical problem I had to track down and I had to spend the whole day doing it and I had that whole car part those guys were out there working knocking out the services and the other work well I spent all day on something not knowing how much we were gonna get paid for it so you know there are days where it works out in days where it doesn’t work out just like everything but as far as how the flat rate system affects the quality of the work done yes it can adversely affect the quality of work that’s done particularly for those technicians who are just interested in making a paycheck and those may and those people may end up on investigative news programs it’s sad but do you blame the system or do you blame the technician I’m gonna say both I’m gonna say as a technician you need to serve show some personal responsibility and you need to step up and take pride in what you do a lot of you out there do a lot of you are like really vehement and animate about you know the quality of work that you put out and I love you for it you’re you’re helping the rest of us who care about what we do maintain that level of professionalism that I think should go with being an automotive technician then there are those out there who work the system you know and and that’s what they do and I don’t care what profession you’re in there’s gonna be that guy girl they’re just gonna be there and it’s it’s really unfortunate and with the flat rate system it can be abused so the long and short of it is it’s probably not gonna change anytime soon it’s been done this way since probably since auto mechanics and it’s probably gonna continue to be done this way for some time but ultimately I think it’s up to you to be responsible for the work that you do and give the customer what they pay for that’s the bottom line if a customer gives you money to perform a task a service that they need from you you need to deliver that even if it pays half an hour and it takes you two you got to do it but you know see what you can work out maybe you can get more money it depends a lot of it a lot of it is in how you sell it work and that’ll be another video how to sell a work I think that might be the next one so that you make sure that you’re compensated for your education and the time you put into something that is also important but speaking to a flat rate system it’s it’s a double-edged sword just like just about everything that’s out there in the automotive world anyway so that’s my take on it I’m very interested in your opinion go ahead and post it in the comments below i’m eric the car guy also known as ET c g1 you can always visit me at eric carr gomm or follow me on facebook and twitter or you can be a fly buzzing around my head seriously be safe have fun stay dirty see you later


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