What Is Service Labour Efficiency And How Can It Be Improved?
25th February 2022
Service Efficiencies Explained
Dealer Management System provider Dragon2000 explores why Service Labour Efficiency is important for car dealerships, garages and workshops who carry out retail service work for their customers.
Garages and workshops aiming for increased profits this year are turning their attention to understanding and improving their labour efficiency, which will free up time in the day for more work to be brought into the business.
Improving your efficiencies will result in a faster turnaround of jobs, leading to more availability for extra work. If you can gain just one hour per day in the workshop, charged at £80 an hour retail, then this could add up to over £20,000 extra labour sales per year. Assuming you have multiple technicians, each gaining that extra hour a day, that figure could easily equate to over £100,000 extra labour sales a year!
What is Labour Efficiency?
Labour efficiency, also known as labour utilisation or selling efficiency, tells you how efficient your mechanics are over a period of time, defining exactly how much of their time is spent working productively. This can be calculated using the following equation:
A variety of factors can affect your labour efficiency, including:
Experience and Training
Each technician will have different skill levels based on how long they have been in the automotive industry, ranging from apprentices to long-serving mechanics, affecting how quickly and successfully they can complete a job in the workshop. In order to get the most out of your team, the technician skillset should be taken into account for each job before being assigned.
Salary and Benefits
Offering incentives to your employees can improve labour efficiency in the garage, with competitive wages and bonus structures motivating them to work even harder for the company. Money isn’t everything though, as some staff will prefer promotional opportunities, while others just want some recognition for their hard work.
Introducing longer working hours to accommodate a higher workload can have the reverse effect of improving efficiencies, as staff tiredness and demotivation can adversely affect reaching their efficiency targets, even with added incentives in place. Your workshop could benefit much more in the long run with efficient workshop staff from simply enforcing regular breaks and reasonable working hours.
Creating a pleasant working environment will promote positivity and motivation amongst staff. Making improvements such as adequate lighting, ventilation and heating in the workshop bay areas will keep your team happy, while a comfortable and clean staff area ensures technicians enjoy their breaks and return feeling refreshed.
How To Measure Labour Efficiency and Increase Profit
Service Advisors and Workshop Controllers can benefit greatly from instant live access to their technicians’ schedules, allowing them to manage tasks and track work-in-progress in real time. This can be essential when jobs are in danger of overrunning and changes need to be made before the delay has a knock-on effect on workshop schedules. Each employee’s working status and attendance should also be monitored, enabling you to measure efficiencies at a quick glance and make improvements where necessary. Mobile apps are particularly useful in a workshop environment for recording and managing efficiencies.
The Workshop App from Dragon2000 is designed to revolutionise the way garages are run on a daily basis. Service advisors and managers can gain full control of their staff and individual jobs from their mobile device, making swift changes when required to minimise disruption and improve efficiencies. Automatic notifications will also alert you when technicians are behind schedule, prompting you to take action and resolve the issue.
The app is fully integrated with the DragonDMS, which itself features a Technician Scheduler for efficient viewing of the workshop’s capacity. From here, service advisors can view which technician is appropriate for each job, taking into account both the individual skillsets and the job requirements.
If you would like to know more about the services that Dragon2000 provide, contact us on 01327 222 333 or email email@example.com and we’ll be happy to help.