Monday, 15 February 2016 16:49

A New Hope for Labor Rates: The Variable Rate System

Autobody News interviewed Sam Valenzuela, president of National AutoBody Research, about the importance of conducting labor rate surveys and demonstrating its Variable Rate System. The company will be demonstrating this technology at an upcoming CAA Glendale-Foothill Chapter meeting on March 9.

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Q: Can you tell us about National AutoBody Research and the Variable Rate System?

A: National AutoBody Research (NABR) is an independent, third-party research, technology and consulting company serving the collision repair industry. It is not owned by insurance companies, body shops or outside investors. NABR is working to restore the free market to labor rate pricing and to level the playing field for payment of non-included procedures.

NABR believes people should be paid what they are worth and be paid for the work they do. In response, NABR developed the Variable Rate System (VRS), an innovative and proven technology, to help collision repairers understand market-based labor rates and assist them to learn more about not-included procedures that insurance companies pay for. By enabling repairers to keep up with the increasing training, certifications, and equipment demands of the new technologies and materials associated with modern vehicles, the VRS supports the growth of the collision repairer and helps ensure the proper care and safety of the consumer.

Q: What is the process NABR uses to collect data and how does it ensure accuracy?

A: All VRS Labor Rate Surveys are conducted online, free and easily accessible and available 24/7 on the National AutoBody Research website (http://www.nationalautobodyresearch.com/). The VRS survey is an accurate source available for market-based labor rates for several reasons, including the survey’s validity, measurement of market labor rates, data integrity, continuous measurement, and reporting of a range of rates.

Among other criteria, a key component to a valid survey is that it is easily and equally accessible to all potential survey respondents. This is true for the VRS survey but may not be true for other surveys.

The VRS survey asks for collision repairers’ posted labor rates (sometimes called door rates, or walk-in rates). The VRS survey measures the true, market-based range of labor rate prices, and then reports those rates through the Variable Rate System.

Furthermore, as the industry’s only independent survey of labor rates nationwide, the VRS has no special interest in the survey resulting in a certain number. The survey is only interested in accurately representing the market prices for collision repair labor in any market. Therefore, the VRS uses a high standard for data integrity and does not leave out data, does not change data, and does not manipulate the survey results. The VRS produces a solid market report on labor rates that both repairers and insurers can agree on.

In addition, the VRS measures market prices continuously, not just once a year or even once every three to five years. Any time a shop changes their rates for any reason, they can immediately report their new rates to the VRS, as many times as they want, whenever they want, to ensure the VRS always has the most current market rates available.

Lastly, the VRS reports a range of market labor rates in any geographic area, not just one rate. Just like different cars have different prices, and different insurance companies have different prices to insure those cars, shops are different too, and shops have different prices. In reality, in any market for products or services, there is an acceptable range of prices that make up the market, not one singular price for all products. The VRS reports this range, which is a truer, more accurate picture of market labor rate prices.

Q: What is the importance of conducting labor rate surveys and how can my shop learn about market rates in our area of the country?

A: Revenue from labor can often represent about half of a shop’s total revenue; therefore, the labor rate is critically important to the financial success and health of a collision repairer. Repairers have struggled to get paid what they’re worth, and current labor rates are often below true market prices, even lagging behind standard inflation rates.

In the Variable Rate System, finally the collision repair industry has a real solution to the problem of inaccurate labor rate surveys, which have plagued the industry for years.

To help both your shop and the industry, take five minutes to visit the NABR website and fill out the free VRS Labor Rate Survey for your state.

Even though the survey is an important starting point, it is only one small piece of the entire Variable Rate System, which comprises a full suite of online tools to help you understand market prices in your area, understand your cost of doing business, calculate the rates for your individual shop, and receive more not-included procedures and operations.

For more information on the VRS, visit the NABR website at www.NationalAutoBodyResearch.com or contact Sam Valenzuela at sam@nationalautobodyresearch.com.

So now what? Valenzuela encourages shops to come and see for themselves! NABR will present and demo the Variable Rate System technology at the CAA Glendale-Foothill Chapter meeting on Wednesday, March 9 at 6:30 p.m. at the Brookside Golf Club, 1133 Rosemont Ave., Pasadena, CA 91103.

To RSVP, contact the SoCal CAA Rep, Cindy Shillito, at (714) 944-4028 or email CAAGlendale@gmail.com.

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