I have been given the task of upgrading/updating our current flat rate manual. The manual was done in house, and I'm not sure how they figured job time. I think they got together and decided among themselves how long a job should take. I need to know if there is a guide for job time. I thought there was a national average done as far as how long each task should take by an "average" tech. I am ok as far as the "hourly" rate and mark up on parts. Thanks for your help.
flat rate pricing
gregp
1 - 14 of 14 Posts
I have been given the task of upgrading/updating our current flat rate manual. The manual was done in house, and I'm not sure how they figured job time. I think they got together and decided among themselves how long a job should take. I need to know if there is a guide for job time. I thought there was a national average done as far as how long each task should take by an "average" tech. I am ok as far as the "hourly" rate and mark up on parts. Thanks for your help.
job time
I wasnt asking about pricing or what to charge, I want to know if there is a list for jobs/tasks in our related field, and how much time is figured for those jobs. For example, what is the time allotment for replacing a blower motor.
I wasnt asking about pricing or what to charge, I want to know if there is a list for jobs/tasks in our related field, and how much time is figured for those jobs. For example, what is the time allotment for replacing a blower motor.
flat rate
Thank you for your response. When I had my own business, I used Callahan/Roach. I am working for a Co. that put their own flat rate manual together "seat of the pants", basically asking the senior service techs how long they thought a particular job should take. I want to do it a different (and hopefully better) way using national average. I still have my old books, I guess I could refer back to those. I doubt if the job time has changed that much in a few years. And yes, flat rate RULES!!!
Thank you for your response. When I had my own business, I used Callahan/Roach. I am working for a Co. that put their own flat rate manual together "seat of the pants", basically asking the senior service techs how long they thought a particular job should take. I want to do it a different (and hopefully better) way using national average. I still have my old books, I guess I could refer back to those. I doubt if the job time has changed that much in a few years. And yes, flat rate RULES!!!
I made my own too. With a twist in it. I looked at a lot of different FR programs and the one thing that bugged me about them all was the allotted time for repair. The thing that bugged me more specifically was this notion from all of them that, on most repairs you win, cause your tech will get it done faster than the time alotted. Some you'll lose on because maybe the tech got screwed up, maybe it was longer, you know just anything. Not only that, but to me, I know good fantastic mechanics, but there not fast. Me being one of them. I like to be slow. And I will never be rushed ever. Whenever I asked the question to the software companies or to guys on here about the losing part, the best answer I got was, you don't lose very much and you take the good with the bad. Well I am stubborn and don't want to lose on nothing.
I devised mine in such a way that the tech on site makes the decision on how long it will take for him to complete the repair. I use a pricing matrix from a FR package but do not list every conceiveable part. I just have the tech know the cost and then mark it up, taxes included. Our labor rate which has become generous. He actually prices the job right there, and gives customer a flat rate repair price. It does take a little longer, but I don't lose, the tech don't lose. It also provides for exceptional flexibility that a flat rate package sometimes constrains you with. And thus we accomplish the number one priority, which is giving the customer one price and not this Time and Material Arguement.
The number one arguement I get about my plan is that, I might charge the same customer two different prices for the same repair. This is true. I can't deny it. Since I do a lot of commercial industrial, two different guys on two different but same peices of equipment. It's only happened several times. I have never been questioned by the accounts payables yet, but if I ever get the phone call argueing that. I will be pleased to explain how I operate and I am willing to bet, I'd win the arguement. Most people in commercial service circles understand all this to begin with.
Lastly, I did not like the thing about paying a technician by peice work. If it alloted four hours, and he did it in two, he got paid four hours. I would love to be that generous, but I run a business to make money and try to get each employee as profitable as possible. I also think it could cause a tech to become dishonest. All the same arguements I also have about paying commision on parts. I think thats absurd and just allowing guys to take the inch and run a mile. I go behind companies here that do that and my customers are getting nickel and dimed to death by that.
I ran into one recent service call where I know the account and they call anyone and everybody, because it's a neccesary thing for them to have on the spot service. I could not get to the call but very familiar with the equipment. This bozo from XYZ company who pays their men commision on parts goes and sells these people a new chiller control to the tune of 1900 bucks. I go out the next day cause it was not proggrammed correctly. About two weeks prior I had got that old control proggrammed and it was fine. XYZ Bozo left the old control in the trash. I mentioned to customer of how they pay their mechanics and I am suspect of this old contoller being bad, seeing as how I just got it running a few weeks back. Not only that but the customer was also questioning my ability. He was in this position of, "who the hell should I beleive". I talked him into paying me to reinstall old control. To prove what I said was true or not. Bingo Bango. The whole problem is, they have crappy power distribution and the computer will lock out on phase loss, and needs to be electrically reset. Controller was fine.
Why even offer the oppurtunity to become dishonest about the way you conduct business. Not only that but it's so obvious, whent here is all other kinds of ways to cheat with out anyone knowing whats up.
I devised mine in such a way that the tech on site makes the decision on how long it will take for him to complete the repair. I use a pricing matrix from a FR package but do not list every conceiveable part. I just have the tech know the cost and then mark it up, taxes included. Our labor rate which has become generous. He actually prices the job right there, and gives customer a flat rate repair price. It does take a little longer, but I don't lose, the tech don't lose. It also provides for exceptional flexibility that a flat rate package sometimes constrains you with. And thus we accomplish the number one priority, which is giving the customer one price and not this Time and Material Arguement.
The number one arguement I get about my plan is that, I might charge the same customer two different prices for the same repair. This is true. I can't deny it. Since I do a lot of commercial industrial, two different guys on two different but same peices of equipment. It's only happened several times. I have never been questioned by the accounts payables yet, but if I ever get the phone call argueing that. I will be pleased to explain how I operate and I am willing to bet, I'd win the arguement. Most people in commercial service circles understand all this to begin with.
Lastly, I did not like the thing about paying a technician by peice work. If it alloted four hours, and he did it in two, he got paid four hours. I would love to be that generous, but I run a business to make money and try to get each employee as profitable as possible. I also think it could cause a tech to become dishonest. All the same arguements I also have about paying commision on parts. I think thats absurd and just allowing guys to take the inch and run a mile. I go behind companies here that do that and my customers are getting nickel and dimed to death by that.
I ran into one recent service call where I know the account and they call anyone and everybody, because it's a neccesary thing for them to have on the spot service. I could not get to the call but very familiar with the equipment. This bozo from XYZ company who pays their men commision on parts goes and sells these people a new chiller control to the tune of 1900 bucks. I go out the next day cause it was not proggrammed correctly. About two weeks prior I had got that old control proggrammed and it was fine. XYZ Bozo left the old control in the trash. I mentioned to customer of how they pay their mechanics and I am suspect of this old contoller being bad, seeing as how I just got it running a few weeks back. Not only that but the customer was also questioning my ability. He was in this position of, "who the hell should I beleive". I talked him into paying me to reinstall old control. To prove what I said was true or not. Bingo Bango. The whole problem is, they have crappy power distribution and the computer will lock out on phase loss, and needs to be electrically reset. Controller was fine.
Why even offer the oppurtunity to become dishonest about the way you conduct business. Not only that but it's so obvious, whent here is all other kinds of ways to cheat with out anyone knowing whats up.
whats wrong with paying by performance, if a guys a thief he will be dishonest with either system.I believe flat rate removes labor management(baby sitting grown men).When i see my competitors techs hiding at 2:30 because they have to punch out at 4:00 behind burger king i often wonder both guys the owner and tech could make more and be happier on flat rate.Another thing when a tech says he would rather work hourly verses flat rate ,watch out he usually is lazy and a cheat!
paying techs with flat rate
I used to work for a Co. that paid us an "hourly" rate, but your hours were based on the work you performed. We worked flat rate, and you were paid for each task you performed. We were paid by the tickets we turned in, showing what work we had done. We were also paid 1/2 hour travel for each job, and that was passed onto the customer as a trip charge. So, if you went to a job and did a job that should take 1 hour, you were paid 1 1/2 hour for the complete job. If the job took less time (and most of the time it did if you were a decent tech) you made out good. Where this system really shines for both the Co. and the tech, is that you are paid for your performance. The Co. makes money, and you make money. If youre a lousy (or lazy) tech, you lose, but the Co. hasnt lost any money paying the tech for work not performed or sitting around reading the newspaper. Sure, there are techs who will try to beat the system and be dishonest. As was siad before, you have that in either system, flat rate or hourly. It's managements job to weed those guys out
I used to work for a Co. that paid us an "hourly" rate, but your hours were based on the work you performed. We worked flat rate, and you were paid for each task you performed. We were paid by the tickets we turned in, showing what work we had done. We were also paid 1/2 hour travel for each job, and that was passed onto the customer as a trip charge. So, if you went to a job and did a job that should take 1 hour, you were paid 1 1/2 hour for the complete job. If the job took less time (and most of the time it did if you were a decent tech) you made out good. Where this system really shines for both the Co. and the tech, is that you are paid for your performance. The Co. makes money, and you make money. If youre a lousy (or lazy) tech, you lose, but the Co. hasnt lost any money paying the tech for work not performed or sitting around reading the newspaper. Sure, there are techs who will try to beat the system and be dishonest. As was siad before, you have that in either system, flat rate or hourly. It's managements job to weed those guys out
I am in no way trying to bash you way of doing things but with flat rate how do you avoid "sales techs"?
What I mean by "sales tech" is the guy that gets 1.5hrs to change out a gas valve and he knows he can perform that task in 20min, making a raping if he sells 6 valves a day. So on every PM he tries to sell an unneeded gas valve.
I have always been a firm believer that flat rate promotes dishonesty if unchecked, and the dishonesty burns the customer, not the company. As a business owner I would much rather the dishonest tech burn me, be dealt with internally, than burn the customer for parts/equipment/services that we not needed.
Let's be honest, flat rate is a dangerous game and often goes unchecked because a lot of money is being made.
Damn... I guess I shouldn't expect an answer to my long winded question.
We need an archive after 90 days, it can be seen but not replied to.
1 - 14 of 14 Posts
-
?
-
?
-
?
-
?
-
?
-
?
-
?
-
?
-
?
-
?
-
?
-
?
-
?
-
?
-
?
-
?
-
?
-
?
-
?
-
?
