It looks to be a rough month for service department profitability, which we count on for making our numbers. Looks like we’re not even close to what needs to bill out. Weather caused some interruptions. Holidays don’t help. And a lot of people have been out sick. If we’re down three to four people per day multiplied by five to seven days each. Between holidays, vacation, sick days, and bad weather, we lose over 25% of our services staff. Any suggestions?
Thoughts of the day: Knowing service department profitability numbers and what you have to do to hit the goal is a real start to solving the problem. Over-deliver is one way to reach your goals. Look into temporary services to fill in and free up your people to do more of the technical work. Develop some shortcuts to get people out on the road to jobs sooner and keep people out in the field longer. Use overtime if you have to.
Figure out your monthly work hours to determine service department profitability.
Calculate the number of workdays per month, not including holidays. Count up the number of people working on an average day and multiply workdays by the number of people. Deduct a typical number of vacation and sick days based on historical records. Multiply by the number of on-the-job hours per shift, not including breaks and travel time. That’s how you get to likely monthly work hours.
Estimate the typical number of hours per job.
If it’s a big range, figure out how many small, medium and large jobs you do and figure out the median number. Divide available hours by average or median job hours per month, and that’s how many jobs you’ll be able to get through in a given month. Compare that to the typical number of service calls your company handles each month to see if you can handle the typical workload.
Set realistic goals for jobs accomplished per day.
Assume that some things will go wrong out in the field — whether it’s a truck breaking down, a piece of equipment or supplies that aren’t on the job, or anything else that can disrupt the workflow. If your plan is to get to 10 jobs per day, plan on getting to 8 and be thrilled if you hit 10.
Calculate whether or not you can hit your numbers if each person hits their minimum daily goal for service calls. If the numbers work out, keep going. If they don’t, figure out whether you have to increase prices, add more service techs, or add client service calls.
Setting minimum daily and weekly goals by a person will help with hitting monthly service department profitability revenue goals. If you’re short-staffed, think about temps.
Set a minimum daily/weekly goal per person for service calls that add up to hitting the monthly revenue goals for service department profitability. Publish that number and hold each person accountable for meeting or exceeding that goal on a weekly and monthly basis.
Consider bringing in temps to help out, whether in the office or in the field. Add people to jobs requiring the least amount of skill and training. Free your people up to get more work done because they have helpers.
Efficiency in packing the trucks will help get the service employees out on the road faster.
Pack up equipment at night, drive equipment to job sites ahead of time, have people go straight to job sites, plan out routes for travel efficiency and track where people are via GPS. All of these actions can help ensure your teams are maximizing their billable hours.
Compare paying overtime versus hiring new techs.
If you need less than 20 hours of overtime to hit your numbers, it’s probably more profitable to pay for overtime than to hire an additional person. Your people will probably appreciate the opportunity for some extra pay. And when you don’t need the overtime, you don’t have an extra person on the payroll to worry about.
Looking for a good book?
Try “Service Management and Operations,” by Cengiz Haksever and Barry Render.
