Labor Rates: Cheaper Isn’t Always Better, or Even Cheaper

How to recognize when a lower labor rate doesn’t equal the best deal

It’s natural for businesses to seek out the best possible deal from the companies they work with. When it comes to kitchen equipment repair, though, operators should understand that a lower labor rate — even a significantly lower one — often doesn’t equal the best deal.

While value, or “bang for your buck,” should always play a role in this sort of analysis, in many cases, a lower labor rate may actually result in a higher invoice, says Wayne Stoutner, president and owner of upstate New York’s Appliance Installation and Service (AIS).

According to Stoutner, a firm that charges a significantly lower labor rate than its competitors for kitchen equipment repair usually hasn’t invested in training its technical staff. Often, this is due to the nature of the company performing the fix, he says. Many times, an electrician, plumber or HVAC repair firm will dabble in kitchen equipment repair. While their repair staff may know the basics of how the equipment functions, they lack deep expertise.

In contrast, AIS, like all companies certified by the Commercial Food Equipment Service Association (CFESA) invests heavily in training. Counting online training, manufacturer training, training provided by CFESA and other sources, AIS spends about 500 man hours per year ensuring its team members know how to do their jobs.

Shorter repair times, and hence smaller invoices, are the result.

“Our rate may be 20 percent higher, but we can fix the equipment twice as fast,” Stoutner says. “At the end of the day, our invoice will be lower than a [company with] a lesser rate because they may take so much longer to repair the equipment.”

Of course, Stoutner also stressed the value issue: Companies with lower labor rates may not perform the quality repairs that CFESA-certified firms do.

Naturally, much of this goes back to training. When firms invest in training, technicians often know the ins and outs of specific pieces of equipment. That means that they not only know how to repair units, but also how to ensure these units are properly calibrated and working at peak energy efficiency.

Certified, factory-authorized service agencies also have safety on their side, Stoutner says. Companies without manufacturer relationships are not going to have easy access to “the technical service bulletins, recalls and safety issues that come up from the manufacturer that we’re made privy to as the authorized service agent. A plumber or an electrician is never going to see those bulletins. He may be repairing a piece of equipment that’s unsafe or using an unsafe part.”

The question of what’s a good, fair labor rate for repair is an important one; it’s just good business to consider all options. When an operator finds rates that are far lower than the competition, though, they should keep in mind the old cliche: You get what you pay for.