The secrets to maximizing your labor dollars
When it comes to running a successful and profitable quick-lube center, your outlay in labor dollars can quickly turn you from “in the black” to “in the red” if you fail to maintain control of your labor issues.
Controlling labor seems to be one of those never-ending battles plaguing quick-lube shop operators, no matter if their shop is doing 20 cars per day or 70 cars per day.
High volume, low volume—it’s all the same. Follow a few basic and simple guidelines and you will find your labor woes a far less exasperating issue than what your current situation may be.
Many quick-lube operators make the fundamental mistake of thinking that, to be successful, they have to “cut” labor whenever and wherever possible.
Often, when the average daily “rush” is over and the car count starts to trickle downward, a typical lube-shop manager will look around his shop and look for ways to cut labor. Maybe send a team member home early, or give one of the crew an extra-long lunch break.
Unfortunately, this all too often results in the shop not having the proper staff on hand when the traffic unexpectedly picks up again. The consequences of this short-handed labor situation are less-than-perfect service procedures, inadequate product and service presentations, and lower than average, or maybe even lower than acceptable, ticket averages.
Ultimately, this all has the effect of not helping to meet a labor guideline, which is exactly the opposite of the entire intention behind cutting labor in the first place.
Because you are now running short-handed, your customers get poor service, your crew has to do double duty, your ticket average suffers, and your attitude goes in the dumps.
Well, there is a better way! Instead of cutting labor at every opportunity, you need to “make” labor at every opportunity!
The very first step in ‘making’ your labor guidelines is to have a plan. Most operators think they know their particular operation’s slow and busy times off the top of their heads, and they tend to make their crew schedules the same way. Likewise, many will try to custom fit the labor to fit the hourly needs of the location as the day is progressing.
The problem with this approach is two-fold: First, if you force the issue with your preconceived notions of what you think the business should be for any particular hour of your business day, you are not giving your shop the best opportunity to increase business.
Second, by cutting labor as the day progresses, you are reacting to a situation that is fleeting. In the lube business, as we all know, a typical shop can go from no cars to three or four in, and three or four waiting’ in a matter of five minutes or less.
If you are not prepared with the proper staff, then the only thing that was cut was profits, not labor.
When it comes to making a schedule and planning for your business day, it is always a great idea to get back to basics. That is, use the methods that most of us were taught when we first learned how to make a schedule.
Specifically, look at the past car counts for this same weekday for several weeks in a row past. If your lube shop has done an average of 35 cars total for every Monday for the last eight weeks, then you can be fairly assured that you will do somewhere in the vicinity of 32-40 cars on this Monday.
Likewise, if your lube shop has done an average of nine cars between the hours of 1 and 2 p.m. every Tuesday for the last eight Tuesdays, then be confident that this Tuesday’s 1–2 p.m. hour will see anywhere from 7–12 cars.
You should make your team member work schedule at least 2–3 days in advance of the first day of the schedule. This gives you plenty of time to tweak the schedule if some unforeseen absence or inability by one of your crew members to work his schedule comes up.
Always plan your schedule to accommodate a roughly 10 percent increase in business so that any extra busy periods can be handled smoothly and easily, allowing your customers to get the excellent service that they want and that you want to give them.
One of the oldest laws of running a business is plan your work and work your plan. This was excellent advice 100 years ago, and it is as good, if not better, advice for today’s business climate.
Have faith that with a properly prepared schedule, you and you entire staff will be well prepared for your day’s business, and you won’t have to agonize over ‘making’ labor all day, when you should be focusing all your attention on your customers.
Along with “making” labor comes “maximizing” labor. To be the most efficient, you must get the maximum value from each labor hour spent.
It is no secret that a well-trained, reliable crew member with a great attitude is far more valuable to your business than a brand new, untested and untrained crew member.
Don’t fall into the trap of thinking that keeping your crew’s wages as low as possible will help you to save labor dollars. It most definitely will not.
Remember: Your most expensive labor is your cheap labor.
A well trained, consistently high-performing crew member will most often do the job of two untrained, new employees. The exceptional crew members can, and often do perform at the level of two or three times what may be considered to be an average employee’s production.
The spread in wages between a brand-new employee versus a seasoned, highly skilled employee is usually 30–40 percent at most. However, this highly skilled employee can return up to 100 percent or more performance than a brand-new crew member.
When you look at the cold, hard facts, that’s a bargain.
How do you keep employees around for the long term? What can you do about the high turn-over rate that our industry suffers from?
Labor ‘Expense’ vs. Labor ‘Investment’
The answers to those questions are actually quite simple. Instead of thinking of your labor as an expense to be cut down at all opportunities, think of your labor as an investment.
The whole idea of an investment is that you are looking for the maximum return on the money (labor) that you invested in the first place.
Your labor is no different. Invest in your labor. Invest in your team members. Invest in your success.
The formula is quite simple, really: Cut your labor, and you cut your success. Invest in your labor, and you invest in your success.
Just like any good investment banker, you are looking for the maximum return on your investment. How do you get the maximum return on your labor investment?
Training is the key to a successful investment in your labor challenges. In reality, there is never an end to the training that your crew members should receive from you. Train them as well as you can initially. At the same time you must always maintain them. And when the time comes, as it inevitably will, you must re-train them. This is a never-ending process, however it pays never ending dividends.
You will receive the highest dividend on the labor dollars that you invested through increased car counts, higher ticket averages and happier customers that return more often.
L: Look around you. During your business day, take a look around your shop and see if there are any potential trouble spots or bottlenecks that you may be able to alleviate with a simple adjustment.
No day ever happens completely as planned, so an effective quick-lube manager is always prepared to make the quick changes to get things back on track.
A: Attitude. Make sure that you and all your team members have a great attitude! It has been proven time and again that almost all potential problems can be overcome with a great attitude.
If any of your team members display a poor attitude, remember that you are letting them. Tell them that good attitudes are mandatory! It is surprising how well this works.
Treat them fairly with equal amounts of discipline and respect, keep the day fun and you as well as your team will all have great attitudes.
B: Basics. As we get more adept at any repetitive skill, it is only human nature to stray further away from the basics. Keep your team focused on the basics, and you will find your day progressing much more smoothly!
O: Organize. A clean and well organized lube center is far more efficient than a dirty, poorly maintained one. The same holds true for your team members. Make sure that your crew is stationed where they are the most effective. Don’t let them stray to wherever they want to work. Assign them a position and a set of responsibilities for the day and you will be surprised at what they can do.
R: Retrain. There are always new products and services being introduced to our industry as well as some new twists on an old idea that come along frequently, so even your best team member needs to be retrained constantly. This keeps them fresh, and it helps them to maintain that great attitude.
With a little planning, attention and a good eye for details, your labor issues will be easily handled.