Service Work Pay Opinions wanted!

jahilliard

Senior Member
We are a very small company and I have 1 Service Tech whom is very good at what he does, loves to be on his own, great with customers, etc. The challenge I am having is being able to produce what I believe we should be able to with our service work. For example he is currently paid hourly and what seems to be happening is he will start his hours when he leaves his house at 6:45, he will come by the shop and grab some small materials (screws, fittings, etc.), talk for a little while to me and the other guys about to head out to other projects...but his first appointment wont be until 8:30 so theres already almost two hours of unproductive labor. Also, there may be 1-2 Hour gap between appointments. An example would be a few days ago he turned in 7 hrs (from when he left his house to the time he pulled in his drive way) and there was only 3.5 Billable Hours. I am looking for possibly a commission based rate...something that would be an incentive to stock the vehicle, plan for projects etc. on his time so that he can produce as much as possoble throughout the day, in turn actually earning more for himself and the company.
This is the break down of the example.
Start 7AM
First appt start time 9AM End time: 11:15 = 2.25 Hrs
Dr's Appt from 1-2PM
Service call from 2:30-3 (1 Hour billable)
End the Day at 3PM
Total Pay Roll = 8 Hours - 1hr Dr Appt = 7hrs
Total Billable = 3.25

How is something like this typically handled as far as pay Roll Hours vs. Billable?? I understand every place can be different and all that...what have some of you experienced or currently experiencing that is or is not working for the employee as well as the company?
 

iwire

Moderator
Staff member
I am looking for possibly a commission based rate...something that would be an incentive to stock the vehicle, plan for projects etc. on his time
Maybe the employee could fill the gas tank on his dime as well? ;)


If it was me, I would be looking to make their time on the clock more productive and forget about expecting them to be productive off the clock.

Other guys can jump in but there is a ton of info out there about how to deal with billable vs non-billable time. Some do handle it with a lower base hourly rate and a commission on top of that. Others just build the cost of non-billable time into their rates.
 

petersonra

Senior Member
I don't think it's legit to expect him to work for free. Your problem likely is it that you have an unrealistic view of the amount of nonbillable time that is just required for this kind of work. Stocking a truck takes time. Just stopping to go to the bathroom takes time. Filling in reports takes time.

For this kind of work I would not expect more than about 50 or 60% billable hours. There's a lot of driving back and forth that needs to be accounted for. Now that's not to say that he can't be a little more efficient in his time management, and I suspect that some kind of incentive might help in that respect.
 

JFletcher

Senior Member
What was done from 11:15 until 1pm? Even assuming an hour paid lunch, there's 45min to organize the truck, stock & order materials.

The last guy I worked for probably burned three entire workdays each month on having to get those trivial things (coverplates, screws, etc) during jobs because the truck wasnt organized well. I fail how to see spending 45 minutes to get a 35c blank single gang cover can make money. His business so whatever he wanted...

If he knows what projects are coming up more than a day in advance, he can do the planning for them.

There are some/many jobs where a helper will cut down wasted time too. More payroll but if you can land more work, you'd be able to get to it.

but, he really has no incentive to be efficient if he's hourly; he'd be cutting his own throat unless you can get him more work and money.
 

growler

Senior Member
I don't think it's legit to expect him to work for free. Your problem likely is it that you have an unrealistic view of the amount of nonbillable time that is just required for this kind of work. Stocking a truck takes time. Just stopping to go to the bathroom takes time. Filling in reports takes time.
A lot more information would be needed.

Billable hours can't be calculated by the day. It averages out over weeks and months. He doesn't say what his weeky billable hours are. He may be billing 25 hours a week and that would be pretty darned good in some areas because of travel time. I worked for a company where I would spend more time driveing than working and I really drove fast in those days.
 

K8MHZ

Senior Member
We are a very small company and I have 1 Service Tech whom is very good at what he does, loves to be on his own, great with customers, etc. The challenge I am having is being able to produce what I believe we should be able to with our service work. For example he is currently paid hourly and what seems to be happening is he will start his hours when he leaves his house at 6:45, he will come by the shop and grab some small materials (screws, fittings, etc.), talk for a little while to me and the other guys about to head out to other projects...but his first appointment wont be until 8:30 so theres already almost two hours of unproductive labor. Also, there may be 1-2 Hour gap between appointments. An example would be a few days ago he turned in 7 hrs (from when he left his house to the time he pulled in his drive way) and there was only 3.5 Billable Hours. I am looking for possibly a commission based rate...something that would be an incentive to stock the vehicle, plan for projects etc. on his time so that he can produce as much as possoble throughout the day, in turn actually earning more for himself and the company.
This is the break down of the example.
Start 7AM
First appt start time 9AM End time: 11:15 = 2.25 Hrs
Dr's Appt from 1-2PM
Service call from 2:30-3 (1 Hour billable)
End the Day at 3PM
Total Pay Roll = 8 Hours - 1hr Dr Appt = 7hrs
Total Billable = 3.25

How is something like this typically handled as far as pay Roll Hours vs. Billable?? I understand every place can be different and all that...what have some of you experienced or currently experiencing that is or is not working for the employee as well as the company?
The first line is the most important. A person like that is in fairly good demand. The quickest way to lose him is to start screwing with his pay.
 

__dan

Senior Member
One company I worked for, I shadowed a guy in their service division for a week or so. Employee pay hours was set based on customer billed hours. You can imagine the grief that would come from billing the customer three hours when the onsite time was 45 minutes. That's what they did. When it came time to fill out the paperwork they did not want me looking at it.

Large service oriented electrical companies in this area, you can expect they are expensive for small jobs. Repair can exceed replace costs. They throw some really large number estimates at customers fishing for those too busy to shop around, $7500 for a house service change? Obviously paying hourly but billing fixed price.

Running to the supply house and back in the middle of the day can chew up two hours easily.

Established organized companies will be organized around upselling, turning a troubleshooting call into a $300 bill to change an outlet or switch. Most competitors will get in low but do an insufficient job and depend on upselling the invoice total.

Travel and lost time organizing, prep work, has to be billed to the job.
 

Strathead

Senior Member
As far as I know the Labor Bureau will not allow you to require an employee to perform work on his own time. On top of that, if you do tell your employee to do that, he can go for a couple months recording every hour he works off the clock per your instruction and then report you. At which time you will be required to pay him back pay and a hefty fine for every hour.

Bottom line is that you need to demand efficiency if he is not being efficient or set you rates to compensate for the lost time. Why do you think that an auto mechanic charges $100 or more to work on your car?
 

Fulthrotl

~~Please excuse the mess. Sig under construction~~
We are a very small company and I have 1 Service Tech whom is very good at what he does, loves to be on his own, great with customers, etc. The challenge I am having is being able to produce what I believe we should be able to with our service work. For example he is currently paid hourly and what seems to be happening is he will start his hours when he leaves his house at 6:45.....

How is something like this typically handled as far as pay Roll Hours vs. Billable?? I understand every place can be different and all that...what have some of you experienced or currently experiencing that is or is not working for the employee as well as the company?
you have a problem. you are seeing it as the employer, and he is seeing it as the employee.

if he's good in the field, that is something that is critical, and you can't easily fix it if it doesn't work.
it works. leave that part alone... he's doing his part.

now, your part.

http://ellenrohr.com/catalog/the-bare-bones-biz-plan/

spend the $10 for her downloadable worksheet and guide. do it this weekend.

you start at the destination, figure out where you want to end up, and then
work backwards to see what you need to get there.

all of your profit is tied in logistics. so is mine. hitting a moving target with a
sparky is really what you get paid to do, not see if you can make him count
locknuts for free, which makes neither of you a dime, and makes him cranky,
to boot.

if i let my customers determine my income, i'm on track to make a certain
amount this week. if i let my work determine how i schedule my customers,
that income increases five fold. to do that, i have to help my customers be
organized to a level that is profitable for me.

most customers haven't a clue what they are doing. if they had their shit
together, they wouldn't need me.

am i doing their "job" for them, for free? yep. am i actively scheduling their
tasks, chasing down their material, and make sure it is on site on time? yep.
i keep a bag with a couple changes of clothes and whatnot in the trunk all
the time, 'cause you don't know how it will turn out when you start work.

i left the house at 3:45 am yesterday, planning on being home by 3 pm.
that didn't happen, i'm still in fresno, and won't get home till late tonight.

if i'm doing my job right, it should resemble a drunk running thru traffic
on the freeway, picking up $100 bills. every time a car goes by, they swirl
up in the air.

throttle response is everything, and agility is rewarded, i suspect that may
hold true for you as well. good luck with that business plan.
 

cowboyjwc

Moderator
Staff member
The first line is the most important. A person like that is in fairly good demand. The quickest way to lose him is to start screwing with his pay.
I certainly agree with that. I told my boss that once I left the house in the morning until I left the shop or last job site, I belonged to him and he was going to pay me for that time. We could work out the how much if it was an issue, but if there was an hour between jobs, then there was an hour between jobs. It's not like the guy can go off the clock and go to the doctor, or get he oil changed in his truck, or whatever. The easiest way would be to just pay him and hourly wage and maybe a percentage of each job he did as a bonus.

The thing a lot of new bosses seem to miss in the really big picture, when they say they can't find good help, is that guys are making what I was making in the 80's.
 

electrofelon

Senior Member
So he is getting paid to drive to work? Is that a fringe benefit you guys offer? I never got paid to commute, unless it was an out of town job. Seems like he could skip going to the shop and just go right to the first job.
 

jahilliard

Senior Member
Thank you for all the input truly. First I do want to be clear the service tech I have is well above average and I respect him accordingly and compensate him accordingly. This isn't a complaint thread...I want to improve with the benefit of employee and the business...it can't be successful, by my definition, any other way. I was brought up in this trade, I'm 4th generation, that you are paid for producing. In other words you don't show up to the site at 7...you're on site producing at 7. I'm not professing that's the answer and end all way to look at this. And of course I'm looking at it from an employer point of view, I'd be letting my employees and my business down if I didn't. I have a great employee and love what we are all creating...I simply want to be better. With all that said, what's to be said for paying for one way...either to work or from work. Like someone mentioned I certainly have never been paid to drive to work or home and 99% of employees don't either. And as far as sticking a truck, washing a truck, fueling a truck, organizing a truck etc. I struggle with seeing how that's payroll time, "mostly". I believe we all get paid for the VALUE we bring to the market...if I am ready to work, not spending unproductive labor to "get ready" I bring more value. If I get fuel on my way home and don't show up 30 mins late explaining I had to get fuel and get paid for it...I bring more value. Again, i am not complaining but my feeling is we can be so much better, therefore able to offer better compensation, better product and service. Do any of you have compensation based employees? I don't want a salesman focused on over all sales pushing panel replacements only to raise sales and his compensation etc. It's a fine line I believe. It seems to be one of the MOST difficult questions to answer clearly.
 

petersonra

Senior Member
I think if the OP has concerns about the issue it might be best to just talk with the employee directly and let him know what his concerns are.

If the OP is making a bunch of money from what the guy is doing, just remember it is best not to kill the goose that lays the golden eggs.
 

petersonra

Senior Member
And as far as sticking a truck, washing a truck, fueling a truck, organizing a truck etc. I struggle with seeing how that's payroll time, "mostly".
If you are having trouble with the concept of paying the employee for all the time he is actually working, you need to adjust your thinking. It is no different than cleanup time.

I am not a huge fan of paid lunches and breaks, so don't see an issue with not paying them, but with service guys who are on the road, it is a balance between not paying them for it, yet expecting them to drop everything at a moments notice if you need him.

I don't see an issue with expecting him to start his day from home if he has a company vehicle, but the reality is that unless you give him a charge account at the local supply house for parts he is going to have to come in pretty much everyday to stock up the truck.

IMO, if the guy is driving a company vehicle, he should be paid for that time, even if it is to and from his home. I don't see any reason why he has to go from his home to your office first, or go to your office before heading home though.

I would also point out that the kind of guy you described are not all that easy to come by. IME, most electricians don't especially like service work and suck at it.
 

Strathead

Senior Member
If you are having trouble with the concept of paying the employee for all the time he is actually working, you need to adjust your thinking. It is no different than cleanup time.

I am not a huge fan of paid lunches and breaks, so don't see an issue with not paying them, but with service guys who are on the road, it is a balance between not paying them for it, yet expecting them to drop everything at a moments notice if you need him.

I don't see an issue with expecting him to start his day from home if he has a company vehicle, but the reality is that unless you give him a charge account at the local supply house for parts he is going to have to come in pretty much everyday to stock up the truck.

IMO, if the guy is driving a company vehicle, he should be paid for that time, even if it is to and from his home. I don't see any reason why he has to go from his home to your office first, or go to your office before heading home though.

I would also point out that the kind of guy you described are not all that easy to come by. IME, most electricians don't especially like service work and suck at it.
I agree with everything you say except the part about driving a company vehicle and being paid and I don't think the Labor Board does either (I could be wrong). I believe the law states that you must be paid from the place you are required to report to work. So if you are required to come to the shop to pick up a Company Truck then you should be paid from there. If they let you drive the truck home, it would be from the first place they require you to be.

Out of all the issues, the gas is probably the only one that would bug me from an employer perspective. The employee has every right to require pay when he is pumping gas, but on the flip side, the employer has every right to not allow the employee to stop for snacks. In a good relationship there is give and take. In the OP's description, there seems to be a little excessive take but his proposal would skew it far the other way. It really sounds to me like the OP needs to either decide what he needs for production out of his employee, or better yet, discuss what he can do to assist the employee with increasing productivity and then he needs to base his service rate on covering that lost time.
 

JFletcher

Senior Member
Cleanup, stocking, washing the truck, hauling tools back and forth... these are things that you pay a helper for. Not that these things are beneath an electrician, but they arent an efficient use of his time imo. Then there are the jobs that go much smoother with two people.

Producing by 7am means getting there by 6-645 depending on the job. Sure, some jobs you can show up just a few min early and be good to go but thats the exception not the norm.

I dont think it's unreasonable at all to have the employee fuel the truck and take it thru the car wash if possible in one of those non-billable hours during the day. Same with organizing the truck, which he should do, not a helper; its his truck, he should know where everything is.

Maybe moving him to salary would be better; same pay, he does more 'menial' things some days and gets off early others, or you can get in another call-more money for you both. Talk to him to see what he wants/needs vs your wants and needs.

On an aside, service work is the best; routine is boring. Troubleshooting calls is where you get to use your head more than your hands. Best part of the job to me.
 

petersonra

Senior Member
I agree with everything you say except the part about driving a company vehicle and being paid and I don't think the Labor Board does either (I could be wrong). I believe the law states that you must be paid from the place you are required to report to work. So if you are required to come to the shop to pick up a Company Truck then you should be paid from there. If they let you drive the truck home, it would be from the first place they require you to be.
I can understand that kind of thinking if the guy is going to the same place all the time, like to an office.

Personally, I do not think it is fair to expect to send the guy off an hour or two from home on some mission and then tell him you are not paying him to drive back home, or to tell him the 2 hour drive there is on him because he left from home. If his work day starts at home and ends there, I don't see any reason he should not be paid for the time he is driving to his first project and driving home from the last project.
 

Strathead

Senior Member
I can understand that kind of thinking if the guy is going to the same place all the time, like to an office.

Personally, I do not think it is fair to expect to send the guy off an hour or two from home on some mission and then tell him you are not paying him to drive back home, or to tell him the 2 hour drive there is on him because he left from home. If his work day starts at home and ends there, I don't see any reason he should not be paid for the time he is driving to his first project and driving home from the last project.
Again I agree. I would have no problem being told, or telling an employee that if his first service call is further from the shop than his home, then he can put the difference on his time card. If it is closer kudos. Any service billing structure should include a premium charge just to show up. I can be a higher first hour rate, or a surcharge. Service calls are typically in a relatively small service area for electrical though, so a two hour drive to the first stop is unlikely. I definitely feel that a person given the privilege of driving their work vehicle home is already receiving an untaxed pay increase.

What I really think though is that anything is OK that satisfies the employer and the employee and doesn't violate labor laws. What isn't OK is for this OP to resent his employee, or for him to dictate rules that alienate a good employee. They need to put all their cards on the table and come to a mutual agreement.

I am thankful that my boss lets me drive a company truck home, and I gas it up and wash it on my own time at my own discretion. OTOH, I would never require another employee to do the same.
 

iwire

Moderator
Staff member
as far as sticking a truck, washing a truck, fueling a truck, organizing a truck etc. I struggle with seeing how that's payroll time,
Really?

You really can't see why an employee should not be paid for doing company related work?

What you are saying is the employee should donate money to you.
 

gadfly56

Senior Member
I can understand that kind of thinking if the guy is going to the same place all the time, like to an office.

Personally, I do not think it is fair to expect to send the guy off an hour or two from home on some mission and then tell him you are not paying him to drive back home, or to tell him the 2 hour drive there is on him because he left from home. If his work day starts at home and ends there, I don't see any reason he should not be paid for the time he is driving to his first project and driving home from the last project.
This was an issue we struggled with at my last job. The techs start at 0700 (nominal) and quit at 1530 (nominal) with 30 minutes for lunch. It's about a 20 - 30 minute drive for them to the office. Now, if the trucks stayed in the lot and punch in was 0700 there wouldn't be too much of an issue. You pick up your paperwork (if any), double check material and equipment for the job and head out the door. So ideally on the road by 0715 or so. You tell them clean up time is 15 minutes before quit and quitting time is to get you back by 1500 so you can finish your paperwork and replenish stock or load new equipment for the job(s) scheduled for tomorrow, out the door at 1530. So far so good.

Suppose that the job is an hour and a half from the shop; what's more, it's on a route that runs right by the tech's house? The "standard" way requires that you burn 3 hours per day in travel, and the tech gets paid for it and there's 5 hours of productive time possible. Let him keep the truck, make sure he has what he needs, tell him he has to be on the job site by 0700 and the travel time in is unpaid. Let him quit at 1430 ( with 15 minutes to clean up and 15 for paperwork) and he's home by 1600, just like he was punching in back in at the office. In this case, you have 7 hours of productive work time possible. It seems like a doable compromise.

You can price your jobs for either scenario, as long as you know what you're getting into.

I don't know what your work territory looks like; maybe he's never more than 20 minutes away, maybe you take jobs that are 2 hours away. The key will always be to set the parameters, be sure that your employee understands those parameters and stick to them. You can vastly reduce friction by discussing his schedule with him before hand and letting him know what your expectations are. Remember, "assume" makes an "ass" of "u" and "me". I have never run into trouble on a job by over-communicating.
 
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