Why Flat Rate is Good ~ Podcast Episode 64
Hey everyone. Today on the automotive podcast, we are talking about something that I am sure will ruffle a few feathers. That is flat rate. For those of you not familiar with how flat rate works, you can watch a podcast I did called “Getting Paid on Flat Rate” or read a blog post I wrote called “Pros and Cons of Flat Rate“. Wow, remember when I wrote blog posts? Now I highly recommend you watch the entire show before blasting me in the comments section. I understand that many have a very negative view of that system. Try and open your mind a little, and look at it from both sides.
Join me today as we discuss:
- Flat rate is not ALL bad
- What is flat rate (see links above)
- This is NOT pro flat rate propaganda
- How flat rate is good for techs
- How flat rate is good for customers
- How flat rate is good for the shop/dealership
- Think about the high efficiency jobs
- QOTD “Is performance based pay, the best pay plan?”
- and more
Trouble viewing? Watch “Why Flat Rate is Good ~ Podcast Episode 64” on YouTube.
As always I love to hear your thoughts. Please post them in the comments section below. Again, if you have a question for a show like this, email me Charles(at)humblemechanic(dot)com with Question for Charles in the subject. Also if you have an idea for a show you can email me, or use the contact me form!
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Hey Charles it’s reaaly great you got a new toy uh I mean tool. Maybe.only use the shots where you were actually looking at the camera. On the news doesn’t the reporter
look into the camera. Your content is great and you come off as a consciencious laid.back kind of.guy but still has plenty of get up and go. The front of your head tells us this not the side.
Andrew
Thanks Andrew. That is exactly what my wife said. But you were a lot nicer about it. LOL!!! Just trying to keep the show fresh.
Hi Charles, Re flat rate. This was an HHR, not a VW. My wife dropped her car off at a big retailer/shop in the plaza where she works. Needed a headlight bulb. She came to pick up the car and the bill was $120. That doesn’t sound like flat rate. I can’t print here what I said when she got home. The bulb cost $12.
PS. This is in Canada and a few calls/emails got it straightened out.
OUCH, 120 for a bulb seems high, but I wonder what is involved in the replacement. The Beetles need the headlights removed. Some Passats and GTIs need the bumper removed. It sounds like the place that worked on the car did a bad job of explaining the repairs
You’ve got that right! That price to replace an HHR headlight bulb is not surprising to a shop owner but would be mind blowing to a customer. They should have told her, BEFORE THEY DID THE WORK, that they would have to remove the fender well to replace that $12 bulb. Which by the way those bulbs blow out quick so a premium $40 dealer bulb should be used.
That shop blew it.
Charles, all that is required on an HHR is to remove a couple of those plastic push=in fasteners from the fender liner. Then you just pull the liner away from the fender enough to get your hand and arm in there. You reach around for the bulb holder, twist and pull it away from the lamp. Should take what, 5 minutes. you don’t even have to remove the wheel. Just turn it away for easier access.
There is something similar to that on the GTI with Xenon lights. The labor op code pays to remove the bumper and headlight to replace the bulb. I have found that I can sneak the bulb out pretty easy. There is a specific way to do it, and you don’t have to remove the headlight.
One of the issues would come into play is consistency. If I charged less, say .5 hours, the customer would be happy. But what would happen in 2 months when the tech next to me used the proper labor time and charged 1.6? The customer would be PISSED!
Sadly there is no perfect solution.
So which labor time is “proper” then, 1.6 hr or 0.5 hr? I am almost sure that you charge customer for 1.6 for “consistency” instead of teaching your fellow techs how to change this bulb in 0.5 hr and make every customer happy. Essentially flat rate turns techs into lying thieves because eventually every tech figures out how to do the job in 0.5 hr but they keep charging customers 1.6 hr. Because its what book says! I came from Ireland where flat rate is unknown and term “gravy” is associated only with a sauce.
Flat rate is what all technicians should aspire to if the work variety is good. However, when a tech gets all of the difficult diagnostic concerns because they are the best at doing this type of work, and “Tech B” is hanging brakes all day, motivation may vary. Hopefully, their pay rate is different, but my point is that flat rate works best with thoughtful, and conscientious dispatching. By the way I think camera B is cool. I appreciate your desire to keep it fresh.
The issue with dispatching seems to be the most common root issue. On one hand I hate it. But on the other, I am looking at it from an advisor standpoint. They need to get the cars fixed and fixed right. They dont want to give hard jobs to meh techs. They want to get it done.
Sadly great techs may pay the price.
Win some, lose some.