How To Improve Your Workshop’s Labour Efficiency

Labour efficiency is a calculation that indicates how productive your technicians are during the working day, making it a vital tool for busy workshops and service centres that want to increase their profits.

If you can identify multiple daily jobs that can be completed more efficiently, then one example could be that you could effectively save enough time to gain an extra hour in the working day, allowing you to bring another vehicle into the workshop and complete another job.

The repeated extra hour of labour sales could then lead to a substantial increase in your garage’s profits at the end of the year.

For example, if you were to charge £90 an hour for your services, then the hour gained to sell in the working day could amount to more than £23,000 annually in extra income. The more technicians you have on-site, the greater your potential profit can grow if each technician improves efficiency to all gain that extra hour a day, making labour efficiency worth tracking for ambitious workshops.

To calculate the efficiency of your technicians, simply divide the number of hours each employee has worked by the number of hours attended, then multiply the answer by 100 to reveal their labour efficiency percentage.

If a technician is clocked onto jobs for 36 hours in a 40-hour work week, then their labour efficiency would be 90%, as 90 is the sum of 36 hours worked divided by 40 hours attended and multiplied by one hundred.

Workshop managers should expect the labour efficiency percentage to be between 85-95%, however if your figures are below that percentage, then it may be time to analyse where changes could be made:

Skills
Assigning the most appropriate job to each of your technicians is key to running an efficient workshop. Not all of your staff will have the same level of experience, so experienced technicians would be assigned to the more complex jobs in your garage while an apprentice would be working on smaller tasks.

Incentives
Offering your mechanics a competitive salary and performance-based bonuses can be a powerful incentive to boost productivity and efficiency. Some team members can value growth opportunities and career advancement just as highly as financial rewards, so regularly acknowledging your staff’s contributions, whether through promotions or simple recognition, helps foster a positive work environment and contributes significantly to improved labour efficiency, and can help to ensure your team are going the extra mile for your company while creating a strong team morale.

Breaks
Regular breaks are vital to ensuring staff are feeling refreshed and ready to return to work afterwards, so the time off needs to be enforced by managers. If you’re considering extending your opening hours just to increase productivity, remember this can easily have the opposite effect on your team, with technicians becoming more tired and less motivated with more work and no extra break.

Conditions
The environment of your workshop can play a key role in boosting happiness amongst technicians, leading to a more positive and motivated workforce, which will be reflected in your efficiencies. This makes it essential for busy garages and service centres to operate with good lighting, heating and ventilation throughout the department, while ensuring each area is always kept clean and tidy.

Dragon2000’s Workshop App has been designed to revolutionise the way garages and workshops are managed, allowing you to quickly identify room for improvement and make changes to technician schedules at any point throughout the day, ensuring your labour efficiencies are kept at a high level to drive profits.

Our innovative app provides workshop managers and advisors with all of the tools to take control of the service department from a mobile or tablet device and oversee progress, with real-time job tracking, transparency of time and attendance, alerts for overrunning tasks and more.

The Workshop App is fully integrated with the DragonDMS dealer management system, which also lets you assign jobs to technicians based on their skillset and availability.

If you’re looking to improve your workshop efficiencies, speak to our sales team today on 01327 222 333 or email sales@dragon2000.co.uk to find out how we can help.

Dragon2000 have been helping car dealers and garages drive their businesses forward for three decades with our dealer management system, car dealer websites and mobile apps. Contact our sales team today to find out how we can help your business increase profits and reduce costs.