The causes of the service tech shortage are many. But Hireology CEO Adam Robinson calls dealership pay plans "the biggest issue we have in tech retention."
Nearly three out of four new-vehicle dealerships still use a flat-rate system, paying technicians a set amount per completed job rather than an hourly wage. The fastest techs can earn productivity bonuses.
But critics, who call flat-rate plans antiquated, say they value speed over quality of repair and tend to put younger and less experienced techs at a disadvantage.
"If I am in another industry, I am paying you for the time you spend here," Robinson told Fixed Ops Journal. "When you pay your techs on a rate card, you are putting all the risk on them."
A survey this year of 4,700 repair professionals, most of them service techs, by the National Institute for Automotive Service Excellence (ASE) found that 73 percent of dealerships pay technicians a flat rate, compared with 17 percent of aftermarket repair shops.
"The flat-rate pay system is very bad for skills," says Donny Seyfer, executive officer of the National Automotive Training Task Force and co-owner of an independent shop in Wheat Ridge, Colo., that recently switched to hourly pay for its techs. "When I worked at the dealership years ago, it was terrifying, some of the things that happened in the bays."
Seyfer recalls that a frequent repair on the Ford Windstar minivan was so simple that techs would replace the part even if the fix wasn't needed, just to boost their pay.
"It's all based on speed — the faster I go, the more money I make," Seyfer says. Service, he adds, "is not cyclical. It doesn't have to do with the weather. It has to do with people's paychecks."
