# Are You Short-Staffed? Break Out Productivity by the Numbers and Find Out

Posted on August 15, 2019

How often do you get the feeling you need more people? Sometimes your staff might mention we just can’t get all the work done, can’t take in another car or can’t do proper inspections because they have too much to do, or perhaps you might just have a gut feeling. How do you know for sure?

Let me offer up a couple management tools for your toolbox that will help you decide. When I am asked by dealers if they should hire more people, I first must see what capacity they have today. A simple way for you to test the capacity of your maintenance or tire techs is to ask a few questions. Grab a piece of paper and calculate your store numbers as we go along.

What is the total amount of hours your maintenance/tire techs work per week? For this article, let’s say it is four techs, each who work 45 hours per week for a total of 180 hours/week.

What tasks do your maintenance/tire techs perform? I’m going to use the most common: oil changes, flat repairs, alignments, courtesy inspections, tire installs and rotations.

How many of those tasks do they perform in total per day? It might be eight oil changes, 16 tires, three flat repairs, six inspections, two alignments and three rotations.

How long should it reasonably take to perform each of those tasks? When I have asked this question of the manager/owner, more often than not it is about 15-20 minutes.

Then I multiply the amount of time it should take to complete the total amount of tasks. For the sake of argument, say the manager agrees 20 minutes per job, on average, is a fair amount of time for each oil change and mounting and balancing a tire. It also covers flat repairs, courtesy inspections and tire rotations. We’ll also say each alignment takes double that amount of time, or 40 minutes.

So for this example, we have:

8 oil changes + 16 tires +3 flat repairs + 6 inspections + 3 rotations = 36 daily “events.”

Multiply each event by 20 minutes and you get a total of 720 minutes, which is the amount of time it should take to complete those events per day. We then add to that the amount of time it takes to perform two alignments – 40X2=80 – and the final tally is 800 minutes of total work time per day. Sounds like a lot of minutes, right?

Now, let’s calculate how many hours per day our maintenance/tire techs are available to work. Take 180 hours – 45 hours a week x 4 techs = 180 – divide that by the six working days many dealerships are open, and you get a grand total of 30 hours per day combined, or 7.5 hours a day per tech. Remember the 800 minutes of work actually needed per day? If you divide 800 by 60 minutes, the total number of hours of production needed per day is only 13.3 hours, or 3.3 hours per tech per day.

Does this dealership need another tech in this scenario? No, but it does need better processes and management of the teammates the owner/manager already has.

I will concede that we can’t always be 100% productive. We have busy times and slow times, and the missing wheel lock key happens at least twice a day. While I will push that the correct processes will help smooth many of these things out, I do believe 75% productivity should be a minimum goal. In this case, it is only 44%.

For this example, I will put myself in the shoes of the tire dealer. Let’s assume we are 75% productive or more, and I’m ready to hire an additional staff member. Can I afford it? Here is another tool I would pull out of the toolbox to help me make a better decision than my gut.

I strongly believe total payroll should not exceed 45% of the gross profit dollars I generate. So, if that is the case, before I can add anyone, I calculate how much their payroll is going to be, including the cost of withholding tax, and divide that number by .45. If the payroll cost is going to be \$60,000 annually, I divide that number by .45 and get the amount of GP dollars that must be added to make this a good business decision: 60,000/.45=\$133,333.

If I divide \$133,333 by 52 weeks per year, I get a weekly average of \$2,564. So, if I add this one individual, will he or she add an extra \$2,564 in GP dollars per week, or \$513 GP dollars per day, to my business?

If I can’t answer “Yes” easily, it probably isn’t a great move. One key thing to keep in mind: If you are doing this to calculate the payroll for a customer service teammate, and your technicians get paid via FRH or commission, this won’t give you an accurate number. It only works for adding a customer service teammate if your techs are straight hourly/salary.

Too often we only look at what is the break-even of adding this additional person to payroll. The reason that gets us into trouble is all the things we can’t put into that funnel, like the cost of additional training, an increased risk of claims and other variable expenses.

So do the math when deciding on whether or not to add – or subtract – an employee. It can be one of the most eye-opening things you can discover in 30 minutes with a calculator.

I’d love to hear what you discovered! ■

George Kingman is executive director of Dealer Strategic Planning, the DSP 20 Group. He can be reached at George@dsp-20group.com or (704) 506-2164. See the website www.20DSP.com.

Related Topics: DSP 20 Group, George Kingman, retail

• ### Ruth Michelson

Good stuff, George!

News

## Bridgestone's Sales Fall 3% in 2019

Net sales for Bridgestone Corp. in fiscal 2019 were 3,525.6 billion yen, down 3% versus the previous year. Operating profit was 326 billion yen, a decrease of 19% compared to 2018.

News

## What's Next for Yokohama? Barna Talks Products, OE, Distribution and Helping Dealers With the "Here-And-Now"

Jeff Barna has seen a lot of changes since he was elevated to the top role at Yokohama Tire Corp. two years ago. And he’s driven quite a few changes of his own design, in an effort to position the company for future growth.

News

## Hankook Plans More Capacity, Fitments and TBR Products in 2020

Hankook Tire America Corp. President Soo Il Lee shared plans to ramp up capacity to 4.8 million tires in 2020 with dealers attending the company’s annual Partner’s Day event Jan. 27-31 in Riviera Maya, Mexico.

News

## GT Radial Brand Returns to Formula Drift Series

The GT Radial brand is returning to Formula Drift, North America’s professional drifting competition, in 2020.

News

## Federal Xplora MTS Wins German Design Award

The Xplora MTS from Federal Tire North America LLC is a recipient of a German Design Award 2020.

News

## California Tire Dealers Honor Pete’s Road Service

Members of the California Tire Dealers Association (CTDA) honored Fullerton, Calif.-based Pete’s Road Service Inc. at their annual New Year Luncheon event on Jan. 29, 2020.

News

## Goodyear Recalls 3,721 Fortera HL Tires

Goodyear Tire & Rubber Co. is recalling certain Fortera HL all-season light truck tires, size P255/65R18. The potential number of units affected is 3,721.

News

## USTMA Welcomes Nokian as 13th Member

Nokian Tyres plc has joined the The U.S. Tire Manufacturers Association as the organization’s 13th member.

News

## Sailun Renews Partnership with Toronto Marlies Hockey Team

Sailun Tire Americas has renewed its partnership with the Toronto Marlies American Hockey League team.

Product

## Rotary Lift Adds High-Capacity Alignment Lift

The new ARO22 high-capacity alignment lift from Rotary Lift has an open-front design that is engineered for both cars and commercial vehicles weighing up to 22,000 pounds.

News

## AutoStream Car Care Acquires 6th Location

Rick Levitan and Doug Grills have acquired a 44-year-old tire and automotive business in Baltimore, Md., to expand their network of AutoStream Car Care locations.

News

## Hankook's 2019 Operating Income Drops By Double Digits

Sales revenue rose slightly as Hankook Tire & Technology Ltd.’s operating income fell 22.7.% to 5.4 billion won in 2019 compared to 7.0 billion won in 2018.

News

## RNR Tire Express Will Add 25 Stores in Indiana

RNR Tire Express is planning a big expansion in Indiana, as the franchisor has signed an agreement to open 25 stores in the Hoosier State over the next five years.

News

## Tire Profiles Unveils Interactive Software

Tire Profiles’ (TPI) new TraXtion software gives tire dealers the ability “to manage and act upon” data generated by the company’s TreadSpec drive-over reader.

News

## IMR Lists Top Challenges for Auto Repair Facilities

What will be the biggest challenges facing auto service repair facilities this year? Automotive market research firm IMR Inc. has some insights.

#### Be the First to Know

Get the latest news and most popular articles from MTD delivered straight to your inbox. Stay on top of the tire industry and don't miss a thing!

We respect your data and privacy.
By clicking the submit button below, you are agreeing with Bobit Business Media’s Privacy Policy and this outlined level of consent.