How to Measure Home Services Technician Efficiency

by

Tim McGuire
VP of Content and Community
November 26, 2019
/
4
minutes to read

Owners and managers of residential HVAC, plumbing and electrical contracting companies typically fall into one of two mindsets when it comes to measuring the efficiency of their technicians: 

  1. “My techs are busy all day, so they must be efficient,” or
  2. “My techs are busy, but they aren’t making money. We need more jobs and more workers.”

Both are reasonable assumptions to make. But both are harming your business, and here’s why: Being busy and being efficient are not the same thing.

The difference? Results.

Defining Technician Efficiency

If you bombard your techs with back-to-back visits, they’re keeping busy, but they’re not necessarily being efficient. If they aren’t producing the results you’re looking for, then the process is costing more time, money and energy than you can afford.

To start establishing repeatable processes and habits that aren’t wasting your time, your techs’ time and your customers’ time, you first need to look at how your techs are spending their time between and at each visit. After doing so, you can answer the following questions about your team’s efficiency:

  • Is the work being dispatched a match with my technician’s skill level?
  • Does training need to be revisited or restructured?
  • Have proper expectations been set so that a tech knows to move on to new tasks?

How to Use a Technician Efficiency Report

A technician efficiency report compares the time it takes a particular technician to complete a visit with the time it should take a tech to complete each visit. This “expected” time is called your total billable hours. Think of it as the time it would take an average tech — not necessarily the best tech — to perform a task. 

To calculate how efficient a tech was on a specific job (for example, a capacitor replacement or a tune up):

  1. Take the total billable hours for the tasks performed (again, the time you expect it to take) and divide it by the actual time at the site. 
  2. Multiply that number by 100 to get a percentage.
  3. That percentage is your tech efficiency rating for that particular visit. 

If your tech took less time than expected, your efficiency rating will be over 100 percent. But if the tech took longer than expected, your efficiency rating will be under 100 percent. It’ll never be perfect, but ideally, you want to shoot for an efficiency rating between 75% to 150%.

The next step will be to look at a tech’s productivity, which is not the same thing as efficiency. Productivity measures their performance for a whole day. Stay tuned — we’ll cover that topic on our blog soon.

Time to Talk Tech Efficiency

Where did your tech end up on the jobs you reviewed? Is he or she humming along between 75% to 150%, and deserving of a reward for contributing to the longevity of your business? Or clocking in around 50% efficiency, and perhaps in need of additional training or adjustments to certain workday habits?

Before taking any action on what you find in your tech efficiency reports, it is essential that you have an upfront conversation with your techs (no matter the skill level) about your billable hour expectations. You don’t want them rushing through each visit, but you don’t want them spending too much time on each visit, either. And you want them to feel like they know what they should be shooting for.

Flat Rates, Price Books and the Billable Hour

Whether you’re building your own price book or using one from a third party, tasks have to be thought of in terms of billable hours. It may seem contradictory, but even when you’re using flat-rate pricing, billable hours still come into play — you have to know how many hours a task should take so you can set expectations with your team and with your customers. 

Use Our Free, Printable Tech Efficiency Worksheets

To make the efficiency analysis much easier, we’ve created a handy Technician Efficiency Report Worksheet and included it in our latest workbook, “Improving Time Efficiency: Tools and Tips to Help You Lead Your Team.” Here you’ll find a ready-to-use worksheet (feel free to print off as many as you’d like), along with several other practical tips to help you get your team running more smoothly and more efficiently. 

Download your free copy here today:


Look at Pricing

The start of the year is a great time to look at pricing. Usually, you have an idea of how your company fared the year prior, and you want to ensure you will continue to grow in the months to come. Many of us make New Year’s resolutions with respect to spending or saving in our personal lives, and it’s no different for business owners. Making sure your pricing is in line with where it should be is one of the strongest ways to start the year the right way.

Part of looking at your price book is finding where the issues are, and that can take time. An HVAC company in January is going to be very busy, so it’s a difficult time for a close look. However, a plumbing company might not be as busy. Whenever you tackle this job, your best bet is to look at what your labor rates are. Start there, and let it trickle down across the board. Ask yourself, “Are my labor rates helping my business stay profitable?”

Remember, there are many different services out there and many different groups or communities that you can engage. Never hesitate to say, “Hey, I’m a business owner in Florida. What should my labor rates be?” You can build your price from there. There are also some great billable hour calculators available.

Set Goals

There is no better time of year for looking inward than January. Set your personal goals and company goals for the following 12 months. If you can break those down into departmental goals, even better! Perhaps that means a CSR booking closing rates a little better, or a truck doing 250,000 a year rather than 200,000.

Many companies have found that using an Objectives and Key Results (OKRs) goal-setting system pays off. Looking for a guidebook when it comes to OKRs? Check out Measure What Matters: How Google, Bono, and the Gates Foundation Rock the World with OKRs by John Doerr. 

One key question is the best way to handle setting goals: Is it smarter for business owners to handle this solo, together with staff, or to delegate completely? 

The best approach is to set goals at the department level. As an owner, you need to take the time to understand what the goals are in each department, and make sure they are in line with your goals for the company. No one likes to set unattainable goals for themselves, so make sure you push your departments to set goals that are lofty, rather than simple ones to feel good about hitting. Entrust your staff to aim higher, and watch how they respond.

Pass Along these Points

There's more where that came from.