by TheOne » Tue Jun 16, 2009 9:38 am
There is no magic to the variable tech pay system. It simply uses per job skill level retail labor rates coupled with per job skill level tech pay rates. I've spoken with bsilcox he is currently using the system and can I am sure handle your questions. One caveat that I have used in the shops that I have installed it is the technician must qualify for each of the levels.
Tyler abandoning the flat rate system in favor of a percentage based system is nothing new. As a matter of fact the flat rate system was introduced as a way to eliminate the straight time system without incurring the built in pitfalls of the percentage system. Since you are going to ask, some of them are how do you handle discounts and or coupons. What to do with warranty rates, etc... Yes there are many. The flat rate system is far from perfect, but when operated properly it has the desired effect of disconnecting technician wages from labor rate increases and customer charges.
I too have been searching for a new way to stabilize labor costs, improve gross retention beyond the NADA norm of 70% to 73%, and have failed to come up with a system more effective than the variable labor rate/variable labor cost scheme.