How to Boost Billable Hours Per Technician
Here are 12 ways you can improve your employee utilization rate.
Editor’s Note: The following story first ran in Security Sales and Integration’s sister publication CE Pro.
One of the most effective ways to boost your bottom line is to improve your employee utilization rate, or the amount of time being billed to a customer for each technician. Here are 12 quick ways:
- Measure time out the door for each truck each morning, just like the airlines do for a flight taking off on time.
- Have detailed work instructions for each team.
- Have trucks loaded and ready to go, prior to techs arriving.
- Of 2,080 total billable hours per technician per year, subtract vacation/holidays/training to arrive a fair denominator for all techs… 133 hours a month should be close.
- Charge all activities on site and off site to a project including travel time.
- Keep service calls separate and assign to service personnel.
- Have an escalation process for troubleshooting; involve the minimal number of people in the solution process.
- Reward technicians for being under budget and off job early; communicate where each project is weekly.
- Reward over 60% efficiency with accumulative bonus pay and pay it one week prior to their scheduled vacation.
- Keep all non-installing activities away from billable technicians; e.g., parts running, service, office meetings, limit admin time, un-boxing product and rack building that can be done in the office.
- Train and require methods compliance doing the same things the same way pays dividends.
- Keep the same techs on the same jobs eliminating restart time and transition issues.
How to Calculate Billing Yield
Many times, we encounter companies that yield $5,000 to $7,000 in billings per tech per month. 50% to 100% improvement is possible.
Its simple to calculate: Take last month’s labor revenue billing and divide it by the number of full-time equivalent personnel (contractors too… and if overtime was paid consider that an extra portion of a full-time 40-hour person).
You should get a number in the thousands of dollars.
Then, multiply your blended billing rate for this group of people. Most will be around $100. Multiply your blended number times 133 hours, which is a fair number considering time off for vacation, holidays, training, meetings, etc. This number would be the maximum potential to bill per person each month. At $100 it would be $13,333.
Any total score over $8,000 a month is good and reaching $10,500 or better a month is excellent in most cases.
In most cases, improving by just one hour per technician per week will improve your bottom line by $5,000 per technician per year. If you have 10 or more techs, that is a significant improvement.
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Paul Starkey, CEO of Vital MGMT, LLC, is a 20-year custom installation industry veteran in the residential home systems business. Paul has raised venture capital twice, acquired two companies, started two others and has in depth knowledge of the CI business. These acquisitions and mergers exceeded $280M in value. He has business operations, sales and marketing experience. His keen insights, innovation, and creativity have been recognized by many in our industry. Have a suggestion or a topic you want to read more about? Email at [email protected]
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