It Could Be TIME FOR A Change1 Jun, 2006 By: Ronelle Ingram imageSource
It Could Be TIME FOR A Change
“What is the most expensive
product your service department sells?”
often ask this question at the beginning of many of my service seminars. Some
people give me blank looks. Other say, service agreements, printed circuit
boards or sales support. I believe the answer is the service labor hour.
Knowing the actual cost of the service labor hour and managing it to the optimum
level is essential to making a profit in your service department, and ultimately
having your entire company be profitable.
How you use your inventory of available service hours is crucial. Management
that allows for techs to be habitually late, missing in the middle of the day,
or refusing to take a service call after 3:30 p.m. are losing thousands of
dollars of service inventory each day.
Unlike equipment or supply inventory, which can be saved and sold the next day,
unused service labor inventory is lost forever. Every hour of unused labor
inventory is tantamount to burning a $50 or $100 bill or having each tech steal
a drum from your company each day. Service department profits can disappear into
thin air with every unused labor hour.
When discussing the issue of
unused field labor hours, service managers often say that there is nothing they
can do to control their techs once they leave the office. Unfortunately, I tend
to agree because any (non) manager who believes they cannot manage their field
tech’s use of time, will NOT be able to manage them.
I firmly believe most workers can rise to the challenge of working the 40 hours
per week for which they are paid, but the expectation of being on time, taking
an appropriate amount of time for lunch and working the full day will not happen
by itself. Those managers who have resigned themselves to mediocrity in their
management style will receive mediocrity from their techs' work ethic.
Going Back to School
One of the best examples I have ever experienced in being able to change the
work ethic of an entire community was described in a series of stories published
in a small southern California town’s weekly newspaper. The mountain school
district was having a horrible time dealing with excessive tardiness. The first
hour of each day of school was being constantly disrupted due to the late
arrivals. The community high school had 361 students. On average, there were 93
tardies recorded each day. After months of discussion, the school board
unanimously voted to start issuing citations (costing between $150 and $250) for
each unexcused tardy student.
Announcements were made. The procedure was explained in the local weekly
newspaper; e-mails were sent to available student homes; the new procedure was
explained and discussed in all first period classes and then...the chaos began.
The first week 101 citations were written. Phone calls, outraged parents,
students in tears, letters to the newspaper editor, the school staff and school
board members endured hostile speeches at the school board meeting. But the
school board and high school administration stood firm.
The second week 43 citations were written and over $5,000 in fines were paid.
The third week only four citations were written.
The process has been in effect for over six months now. On average, unexcused
tardiness is now fewer than five students per week. That is an improvement from
300+ weekly recorded tardies before the program was implemented.
No school board meetings were recalled. No school officials were physically
harmed. The PTA and School Booster Club shared the more than $20,000 paid in
fines and the students began their learning each day at 8:00 AM.
The students and the community came together to form a policy. They then endured
the pain of enforcing the policy. Although personally difficult for hundreds of
the community’s citizens, the improved school attendance enhanced the
educational environment for everyone. Students and parents learned the
importance of being responsible for their own actions and respecting the rights
Fortunately, the community at large seemed to realize that they needed a higher
degree of authority to force parents and students to accomplish the responsible
action of personal time management. According to the newspaper article, “It was
not easy, but it was important.”
A chain reaction of sorts
resulted. The local Chamber of Commerce reported that member merchants within
the community found the attendance of their workers had also improved. The
sheriff’s department reported a decrease in petty theft and domestic violence
calls. The need for bi-weekly volunteer trash along the community’s highway was
also reduced to monthly clean up. The community truly proved itself and rose to
the occasion. A new sense of self-worth and community pride grew out of being on
Applying the Lessons Learned
All too often, businesses fall into the ‘lowest common denominator’ style of
work ethic. Employees find it easy to follow in the footsteps of the
underachiever. The feeling is, “If Bill comes to work 15 minutes late each day
and gets away with it, why shouldn’t I?”
If your company does not have a written policy for techs (and other employees)
about promptness and working the full day for which they are being paid, you are
leaving the door open to loosing thousands of dollars of your labor inventory
each and every day.
If the policy of being on time is in writing but not followed, you are allowing
thousands of dollars of your inventory to be stolen by your employees. If you
randomly enforce the policy of being on time, you are still throwing away
thousands of dollars of labor inventory each month.
Employees will do what is
reinforced on a daily basis and not what was once mentioned in an employment
interview years ago. I am constantly amazed at how many owners and service
managers make excuses for field service employees who are virtual part-time
workers. Just because techs work in the field should not mean that they should
be part-time workers while being paid a full time salary.
Management is responsible for setting the tone and expectations of their
company’s work environment. People can be on time for work if that is the
re-enforced expectation. When management allows a few people to be late
occasionally, others quickly see there is no incentive to be on time. In fact,
those who are on time are often required to do the work of those who are allowed
to be late. Tardiness is contagious. Any flexibility in this area should only be
allowed short-term due to an unforeseen or circumstantial problem.
Tardiness can steal thousands of dollars from any business. If a tech openly
stole one drum a week from your company and encouraged all other employees to do
the same, he would probably be fired and prosecuted. But the tech that arrives
late and leaves early each day is often ignored or is accepted as the norm.
Take a lesson from the small town school district. Take a stand. Accept
responsibility for each employee contributing their fair share to the company’s
profitability. The first few weeks of any change will be stressful. If the
little mountain school district could bring together an entire community, your
company should be able to stop the flow of stolen time.