The proposed $15 minimum wage requirement has received a lot of pushback and complaints. And while no one likes to be told what to do, perhaps especially not by the government, the wage increase could actually benefit auto shops in the long run. If that sounds laughable, then you’re in the right place. Here’s a look at just how the $15 minimum wage could benefit your auto shop — and how you can easily make it work.
IS A LACK OF GREAT TALENT HOLDING YOU BACK? $15 MIN WAGE CHANGES ALL THAT
While talking to auto shop owners about their barriers to success, one thing comes up time and time again: A lack of great talent with the skills to pay the bills.
The automotive repair industry is actually losing dedicated techs at an alarming rate as they realize that the going rate won’t support them and buy all their tools. Beyond that, they may struggle to further their skills without the money to pay for training.
If your techs can’t buy tools, get advanced training, and focus on their work instead of how they will pay their way each month, then they simply cannot contribute to the success of your auto shop. With a higher wage and paid training, you give them the ability to advance in their careers, stay focused on the job at hand, and help you increase your auto shop’s revenues as a result.
ACT AS A LEADER IN THE AUTO INDUSTRY BY BEING THE FIRST TO OFFER FANTASTIC PAY
Although the $15 minimum wage requirement is on the horizon, you don’t have to wait for the government to force you into action. Instead, look at the wage increase as an opportunity to paint a picture of what the automotive industry should be.
As you extend the $15 minimum to your lube techs, your shop will immediately serve as a leader in the industry. You’ll find it a lot easier to attract the top talent at that level and beyond as they see your shop as a fantastic place to work. After that, you can naturally progress to increasing the overall wages for your more experienced technicians, which is especially warranted as they commit their free time to training on the newest repair techniques and tools.
The fact of the matter is that as cars become ever more modern, technicians are going from simply turning wrenches to figuring out novel problems though complex computerized diagnostics. And you definitely want those skilled professionals serving your customers and keeping your auto shop ahead of the game. But you have to be a leader in this realm to get the best techs looking your way — and fast since the minimum wage increase could go nationwide any day now.
HOW TO MAKE THE $15 MINIMUM WAGE REQUIREMENT WORK FOR YOUR AUTO SHOP
As you glance over your balance sheets, you might immediately conclude that you simply cannot afford to pay $15 an hour to your lube techs. And paying your lead techs more? Forget it.
Fortunately, that’s not the reality for the vast majority of auto shops. The potential is there. But like many other shop owners, you’re just not realizing it. You are likely undervaluing your talent and position as a pillar of the community, leaving a lot of money on the table as result. Ready to make that a thing of the past? Just do these two things.
OPTIMIZE YOUR LABOR RATE
With the right labor rate on the books, you can easily pay your techs a competitive rate while still covering the overhead needed to run your shop. To make sure you’re charging the right amount, compare your effective labor rate to how much you actually charge your customers for labor.
To do so, divide the total amount of labor dollars you brought in for the month by the number of hours sold. The result is the effective labor rate you shop is making. If that figure is lower than your actual labor rate, increase how much you charge.
USE DIGITAL VEHICLE INSPECTIONS
Another way to increase your shop revenues enough to cover higher wages is by making digital vehicle inspections mandatory. With each tech doing an inspection on every car they service, they can help your service advisors build more robust repair estimates.
Your average repair order will undoubtedly increase in kind, as your customers feel better supported by your shop. The digital inspection records can also help your customers stay on top of their car’s repair needs, bringing even more money into your shop over time.
Although they might seem simple, these two things can go a long way in increasing the amount of money your shop makes every month. Then, you can better allocate those funds to attracting the top talent in the industry and keeping skilled techs on the payroll.
WANT TO BOOST THE SUCCESS OF YOUR AUTO SHOP? PARTNER WITH AN AUTO REPAIR COACH
If all this feels a bit overwhelming, you should know that you don’t have to go through it alone. Just pick up the phone and call 580-749-5630 to get in touch with your auto repair coach, Chris Cotton, at AutoFixSOS. Through that partnership, you’ll get access to all the guidance and insights you need to boost the success of your auto repair shop.