Is socialism coming to your service drive? In this episode of Service Drive Revolution, Chris Collins, Chris Hogland, and Adam Krey dig into one of the biggest conversations building inside fixed operations: technician pay, flat rate vs. hourly, student debt, apprenticeship programs, entitlement, leadership, and why dealerships have to stop ignoring the people who actually produce the labor.
The team also answers a live fixed ops question about labor gross percentage, posted labor rate, and Effective Labor Rate. Chris explains why posted labor rate is one of the least important numbers in the service department, why ELR is the number that actually matters, and how smart dealerships separate labor into categories like competitive labor, maintenance labor, repair labor, diagnosis, diesel, and heavy-duty labor.
If you are a service manager, fixed ops director, dealer principal, general manager, technician, or advisor, this episode is about the future of your service department.
CHAPTERS:
00:00 Welcome to Service Drive Revolution
01:05 SDR Live Academy and weekly live training
03:00 Top Dog 2026 and transcending the service drive
09:30 Why service managers should think bigger
13:20 Listener question: labor gross, door rate, and ELR
16:45 Why posted labor rate does not matter as much as ELR
21:00 Competitive labor, maintenance labor, repair labor, and diagnosis
25:30 How smart pricing strategy increases ELR
30:00 Is socialism coming to the service drive?
35:30 Student debt, college, trades, and workforce problems
42:00 Why the technician shortage is bigger than pay
47:00 Flat rate vs. hourly technician pay
52:30 Heavy-truck shops, car dealerships, and productivity gaps
58:00 Technician frustration and the future of fixed ops
1:05:00 Why dealerships need better systems for technicians
1:10:00 Final thoughts and SDR Live Academy invitation
KEY FIXED OPS LESSON: Your service department does not make money because your posted labor rate looks good on the wall. It makes money when your advisors, technicians, managers, pricing strategy, inspection process, and leadership system work together. Effective Labor Rate, Hours Per RO, technician productivity, advisor communication, customer trust, and shop flow are all connected.
FAQ: What is Effective Labor Rate?
Effective Labor Rate, or ELR, is the actual labor revenue your service department collects per flagged technician hour. It is different from the posted labor rate because it reflects the real money collected after maintenance pricing, repair pricing, warranty, internal labor, discounts, and labor mix.
Why does Chris Collins say posted labor rate does not matter?
The posted labor rate is only one number. Customers care more about the outcome, the repair, the trust, and the experience. A dealership can have a high posted rate and still have weak ELR if the pricing strategy, advisor process, and labor mix are broken.
How can a dealership improve ELR?
A dealership can improve ELR by separating labor categories, improving advisor communication, reducing unnecessary discounting, selling maintenance consistently, inspecting every vehicle properly, tracking labor mix, and holding the team accountable to the right KPIs.
Is flat rate good or bad for technicians?
Flat rate can be powerful for productive technicians because it gives them more control over their income. But if the shop is poorly dispatched, badly managed, under-supplied, or unfair with warranty time, flat rate can feel broken. The pay plan is only as good as the system around it.
Why are technicians leaving the automotive industry?
Technicians often leave because of workflow problems, pay frustration, lack of respect, poor leadership, warranty time issues, weak career paths, and shop cultures that treat technicians as an afterthought.
What is SDR Live Academy?
SDR Live Academy is the live fixed ops training community from Chris Collins Inc., built for service managers, advisors, fixed ops leaders, and operators who want real-time coaching, practical systems, and ongoing training.
Ready to train your service drive? Join SDR Live Academy and get access to live fixed ops training, Service Advisor training, Service Manager University, technician recruiting systems, BDC training, OnDemand courses, and the Top Dog Underground
🛑 SDR Live Academy Online Training For Huge Results: https://chriscollinsinc.com/op/sdr-live-weekly/?=sdrpod
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🛑 Got a question? Call us at 1-833-3-ASK-SDR
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