Warranty work is something your customers are entitled to. But what about your technicians? How should you cover their labor for warranty work – customer pay time or flat rate increase?

Ever heard of a bootcamp in a library?

Well, now you do. 

Recently, we held our first Bootcamp here in our office library. So when you’re a new client coming into coaching, you do some homework and then you go to a boot camp. And that boot camp is here in our office.

We had food delivered in and busted out our new hi-fi system. It was a brand new listening experience, even with songs you’ve heard a billion times like Hotel California.

It’s a system we invested in – probably hundreds of thousands of dollars – that really paid off. It makes the bootcamps extra amazing. We even invested even more on duplicates of records to blow people away. 

Aside from making you want to attend our bootcamp, what’s the point of this story? With so much invested in a system like this, warranty is an important thing to consider. Down the road, something might break or need repairs and will need some warranty work. And that brings us back to technician pay and if that should include warranty work…

A hot topic in the service industry today—paying Technicians customer pay (CP) for warranty work. You know, that question that keeps popping up over and over. Should we be coughing up customer pay (CP) time for those warranty jobs? Let’s take a look at the Pros & Cons:  

Pro: Boost Morale and Retention

One tempting approach is paying Technicians customer pay time (CP) for warranty jobs. It sounds like a morale booster, right? Offering the same rates for warranty work as customer pay could make our Techs feel valued, appreciated, and happy to stick around.

Con: The Silver Bullet Mirage

But hold on a second! Is it really the silver bullet we’re looking for? Sure, it might make some Techs flock to our shop initially, but we need to consider the bigger picture.

Pro: Control Your Fate with ELR

In my book, it’s all about controlling the Effective Labor Rate (ELR). By paying more than the competition, we can secure our talented Techs. Why? Because when they lay their heads on the pillow at night, it’s their base pay rate they’re thinking about, not some fancy bonuses.

Con: Complexity Ahead

Yet, managing ELR and finding the right balance isn’t a walk in the park. It requires strategic planning and careful analysis of our profitability. It’s a challenging path, but if we can master it, we’ll be ahead of the game.

Pro: Play the Psychological Pay Game

Ah, the psychological pay game – a powerful tool to have in your arsenal. When Techs boast about their earnings, it’s that flat-rate pay they love to flaunt. So why not make their heads spin by offering more than the other shops in town?

Con: Attracting the “Hired Gun”

Sometimes, when you are the top payer in town, you attract the people only looking for the almighty buck.  You want the best technician that is fits into the culture of your shop, and takes pride in the quality of their work.

Pro: Nifty Warranty Pay Tool

Now, let’s not knock paying customer labor times for warranty pay completely. It’s a nifty tool, showing our creativity and commitment to going the extra mile. In some cases, it can be a real magnet for talented Techs.

Con: Equal Gusto for All

Yet, our ultimate goal is to have our Techs tackle warranty jobs with the same gusto as customer pay work. We want top-notch performance across the board, not just in one corner, and we need to make sure the techs aren’t chasing extra warranty work on a car just to pad their pocketbook.

Pro: Stand Out in the Market

Paying Technicians customer pay time for warranty work can set us apart in this competitive market. It’s an opportunity to attract top talent and keep our skilled Techs committed to our long-term growth.

The Bottom Line:

So here’s the bottom line – the warranty pay predicament is a tough nut to crack. Lower pay times might make our Techs feel unimportant, and they could be tempted to seek greener pastures. But if we focus on managing costs and creating a supportive work environment, we’ll find that perfect balance. Investing in our Service Department now will put us ahead of the game, as Fixed Ops takes the lead in dealership earnings. It’s the path to better service and long-term success.