Automobile Dealer Magazine

How to Pay Your Bodyshop Manager

by Dave Dunn

Once you have found a good body shop manager you face the dilemma of how to pay him. Compensation for managers is all over the map. I usually recommend that the manager be given a piece of the action through a salary-plus-incentive plan so that he has a vested interest in the department.

It is crucial that any incentive plan be carefully thought out. The most important part of any incentive is that it must have a beginning and an ending date. This will force you and your body shop manager to reevaluate the plan periodically. All too often a dealer realizes that a pay incentive program is not working and yet has no graceful way to get out of it. All incentives need periodic review. All plans must have a beginning and an ending date.

One word of caution as to the formulation of any incentive you build for your manager: make sure it motivates the manager to do what you intend him to do. A plan that pays off gross sales can be shortsighted. All volume and no profit is not good. A plan that pays off of labor sales is incomplete. All too often dealers reward the body shop manager for labor sales only. Too much emphasis on labor can lower quality and hurt profits. Parts sales can be an outstanding source of revenue for the dealership. Parts should be a primary focus in the dealership body shop world. Give the body shop manager some real incentive to sell parts and not just labor. You get the picture, an incomplete incentive plan is worse than no plan at all.

Monitoring the performance of a manager is no small task. In every consultation I have ever done with a dealer I have recommended the development of some objective criteria. The criteria a manager has are often not relevant to the job he is trying to get done. A strong combination of profit and CSI is essential. In future articles, we will look at particular areas that require measurement. We will give you the tools to measure these areas.

Finally, you must recognize the need for investing in your management staff. It is not enough to simply go out and buy the latest gadget or widget. A properly trained, motivated and compensated body shop manager will enable your body shop to become a source of pride and profit.

Dave Dunn is President of RD Dunn & Associates, a management consulting firm specializing in collision repair shop management. He is also a shop owner of one of the most successful collision repair shops in the Midwest.