In the fixed ops world, we often say, “You can’t manage what you don’t measure.” And nowhere is this truer than in the case of unapplied time in the service shop. Every hour that goes unbilled is not only lost revenue—it’s lost opportunity. Whether you’re running a small shop or a massive multi-rooftop operation, unapplied time is a silent profit killer. But here’s the good news: it’s absolutely controllable. Let’s break down how.
Understand what “unapplied” really means
Not all hours are created equal
Unapplied time is any portion of a technician’s available time that isn’t billed to a repair order. If you’re paying a tech for 40 hours and only billing out 30, you’ve got 10 hours of unapplied time—or what I like to call “leakage.”
The reasons behind unapplied time vary: poor dispatching, excessive idle time, improper bay-to-tech ratios, ineffective training, or overuse of hourly-rate techs who aren’t driven by flag hours. And while one or two hours may not seem like a big deal, multiply that by your tech staff, and you’ll start to feel the sting.
Tech training: The foundation of applied time
Prepare hourly techs for flat rate success
If you want to reduce unapplied time, especially with hourly techs transitioning to flat rate, training is non-negotiable. Many hourly technicians struggle not because they lack ability, but because they haven’t been equipped to thrive in a performance-based system. A tech who doesn’t know how to efficiently diagnose, properly document work, navigate the DMS, or understand how the flat-rate system rewards speed and accuracy is set up to fail.
That’s why structured, ongoing education is critical—particularly during the transition period. Focus on weekly 15-minute micro-trainings paired with monthly in-depth sessions. Teach time management, dispatch awareness, and repair planning as core skills. Combine OEM training with real-world process coaching. Just because a tech has years under their belt doesn’t mean they’re ready for flat rate. Experience alone doesn’t translate into productivity—preparation does.
The bay-to-tech ratio myth
More bays don’t mean more hours
Dealers often think giving each tech their own bay—or two or three—will boost productivity. But in reality, more bays can actually increase unapplied time. Why? Because excess bays encourage hoarding. A tech with three bays may tie them up with torn-down cars, reducing the shop’s overall throughput and encouraging “busy work” over flagging hours.
Aim for an efficient bay-to-tech ratio—ideally, 1.5 bays per tech. Use mobile tool carts and centralized parts drops to reduce the need for “personal bay territory.” Keep the work moving instead of stagnating.
Hourly rate techs: Be intentional
Flat rate creates focus
Let’s be honest—flat rate works. It incentivizes production, flags more hours, and naturally limits unapplied time. But that doesn’t mean there’s no place for hourly techs. You just have to use them smartly.
Use hourly techs for inspections, internal reconditioning, express maintenance, and non-revenue generating work. Avoid putting them on diagnostic or high-skill jobs—they’re not motivated to be quick or thorough in the same way a flat-rate tech is.
Also, build in performance metrics for hourly roles. You can still measure efficiency by tracking task time, car count, and throughput.
Dispatch: Your shop’s air traffic control
Efficient dispatch reduces dead time
A well-run dispatch board is like a well-run airport. Planes don’t just land and take off whenever they want. The same logic applies in your shop. Jobs must be distributed to the right tech at the right time—based on skill, bay availability, and repair urgency.
Train your dispatcher to think like a foreman and operate like a project manager. Dead time between jobs is the #1 source of unapplied time. Reduce gaps in the schedule by staging the next job before the current one is complete.
Control overtime or get controlled By It
More hours don’t mean more productivity
Just because your shop is full of vehicles doesn’t mean overtime is the answer. In fact, overtime can sometimes increase unapplied time if it’s not paired with a strong dispatch and load plan. Tired techs make mistakes, work slower, and often revert to unproductive habits when hours get long.
Instead of reacting to backlog with overtime, ask yourself:
- Are we dispatching efficiently?
- Do we have the right mix of jobs?
- Can we reassign lower-skilled work to other teams?
- Is our scheduling system aligned with bay availability?
- Use overtime strategically, not emotionally.
Scoreboard it or lose it
What gets tracked, gets applied
Every week, your shop should review unapplied time by tech, by team, and by job type. Break it down in your fixed ops dashboard—compare flat-rate hours flagged vs. hours available. If someone’s producing 25 hours on a 40-hour schedule, that’s a red flag. But it’s also a coaching opportunity.
Create visibility. Post technician efficiency and productivity on a whiteboard or digital scoreboard. Praise improvements. Highlight best practices. Make unapplied time a visible metric—not just a hidden statistic.
Advisor influence: Keep the pipeline full
Your techs can’t flag empty hours
Don’t forget the front of the house. Service advisors play a huge role in applied time. If they’re not selling work, performing proper walkarounds, or building value in MPIs, the techs will have empty stalls and idle hands. And that means unapplied time skyrockets.
Train your advisors to source and sell the work your techs are skilled at performing. Align the advisor/technician relationship around communication, trust, and urgency.
Last Word: Culture drives control
The shop’s mindset matters
At the end of the day, unapplied time is a symptom of culture. Do your people believe in accountability? Do they understand the economics of their time? Do they hustle between cars—or drag their feet? Are your managers coaching or just reacting?
Set the tone. Celebrate applied time. Reward productivity. And most importantly, lead with clarity.
Control unapplied time, and you’ll not only boost profitability—you’ll create a more energized, focused, and high-performing team.
Want help diagnosing unapplied time in your store? Let’s have a conversation. Because the time you don’t track is the money you never see.
