Don’t Spend $25 on $5 Work: How to Make Your Labor More Efficient

Early on in my career as a district service manager visiting dealers, I made a scheduled visit to see a service manager. When I walked into the dealership, the service manager told me that he did not have time to meet—he had to go run service calls. I have seen this misuse of time, in various forms, over and over in my career.

Value Categories of Labor

In each dealership, there are different levels of talent and responsibility, and I categorize them by assigning a numerical value to each one. The numbers are not necessarily what a person at that level earns. Instead, the number represents the relative value of his or her time.

$25 Labor

The highest value labor in each department or company is the most senior management. They need to focus their time and energy on tasks that only they can solve.

$20 Labor

The next highest value of labor is that of service supervisors. They need to focus their time on the teams they lead. They spend their time in the field solving customer and technician issues.

$15 Labor

These are your top technicians. They have the ability to solve most problems.

$10 Labor

This would represent the average trained technician. He or she is capable of handling most service calls. This level might also include technicians with minimal network skills.

$5 Labor

This category includes all other basic tasks that do not fall into one of the other categories. It would include entry-level tasks such as assisting with setups and deliveries, keeping the shop clean, and assisting more qualified individuals when needed.

Proper Allocation of Resources

Going back to the service manager I mentioned at the beginning of the article, on my next visit, he and I discussed this concept. I explained that as his company grew he would need to focus more and more of his time on the bigger issues, and that eventually he would spend his time driving a desk.

This is not to say that a service manager or supervisor should never perform a service call, but it would be an exceptional situation for them to do so on their own. If they need to visit equipment, it should normally include taking a technician with them. Why? It provides a learning opportunity for that technician. It also allows the supervisor or manager to observe the technician on-site and see what training may be necessary.

Managers and supervisors need to look at what they spend their time on and ask themselves “Who can I delegate this task to?” If there is no one with the needed skills, then it is their task to perform. If they see someone that they can delegate the task to, they should delegate it.

Think of this as the difference between firefighting and fire prevention. If the higher dollar talent is out doing the firefighting, the situation will never get better. They need to focus on fire prevention and delegate the firefighting to their team.

Result

When service departments and managers understand and apply this principle, the result is a team that is constantly evolving and improving. Service profitability will normally improve, and the workload will typically go down.

Technicians’ skill levels improve and they become better able to resolve their own problems. Customer satisfaction will improve because response time decreases and their equipment is repaired more effectively.

The last time I visited the service manager in this article, he was sitting at his desk analyzing the data on his department’s performance. The average monthly copy-volume-per-technician had more than doubled. The service department’s response time was excellent, and his cost-per-copy was significantly better than the national average.