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Insight: Alton’s success proves a bonus for employees

Tony Parish, owner of two-time AM bodyshop of the year Alton Cars, is looking uncharacteristically nervous.

He’s about to tell AM about his bonus scheme, a programme that underpins much of Alton Cars’s outstanding performance and enables it to buy and turn around failing bodyshops at break-neck speed.

But he’s concerned other people will copy him; and he’s concerned that the insurers might think he’s making too much money.

Oh well, here we go…

Alton Cars has been on quite a journey over the past decade.

It has expanded from one bodyshop to five, doubling turnover in the last year alone.

Each purchase fits Parish’s turnaround profile – an underperforming shop that shows potential.

“The first thing we do is flood it with work and put in our own bonus scheme,” says Parish. “We pin P60s on the walls from other sites to show the staff how much they can earn.”

He cites the example of a 21-year-old panel beater earning £48,000 a year on a 40-hour week.

The employee works 6.30am to 3.30pm on Alton Cars’s flexible working plan, which enables it to open 12 hours a day.

Alton Cars focuses on three key areas: work volume, efficiencies and throughput of numbers.

Its flagship Leeds site achieves efficiencies of 182%; in contrast, recent purchase RC Jones stands at 97%.

But while Alton Cars puts a lot of emphasis on number crunching – financial director Julian Milner is Parish’s right-hand man – it doesn’t lose sight of the real differentiator.

“The computer produces the stats but it won’t repair the cars – it’s the lads on the shop floor who do that,” says Parish. “They have to be happy and motivated to be efficient and to reduce rework, which has been an issue at some sites we’ve bought.”

And so to Alton Cars’s jewel in the crown – its bonus scheme.

It’s based on hours per job and pays out when staff exceed the national average.

#AM_ART_SPLIT# Bonus is also set aside on turnover (Parish: “the efficiencies are there and our costs are controlled so increases in turnover are profitable”) and upsell, such as wheel and bumper refurbishments.

A third of cars will be upsold in this way. “It’s virtually all profit,” adds Parish.

He refuses to give away freebie services, such as valeting, correctly identifying the profit opportunity. Alton Cars will do a basic wash on all cars, but valeters are bonused on upselling the service.

“We renegotiate contracts at new sites so that staff are on a lower basic wage but they have the bonus scheme,” Parish says. “They earn more money working fewer hours.”

Milner sums up the company view: “Profit isn’t a dirty word. We want staff to earn as much as possible; the more they earn, the more we earn.”

The five company directors float across the business on a daily basis which enables them to tackle any problems on-site, instantly.

But Parish believes the group has peaked in size under the present structure.

“We are at a good size that is manageable and with good return on investment,” he says. “If we grew any larger we would have to employ more head office people and that hits the margins. You end up with HR departments and the rest.”

That’s not to say the group doesn’t have enormous potential for organic growth: “We are at our optimum, but not our maximum.”

Work providers are, according to Parish, “banging on the door” for the company to take on more work, especially fleet business. But the real opportunity comes from private work, an area the company has not focused on previously.

“We have to be careful not to annoy insurance companies but we are about to go very pro-active for private work,” says Parish.

He has withdrawn the £26,000 spent each year on radio ads – “we got no private work from them” – and has installed giant signs outside each bodyshop that say ‘if you’ve had an accident that is not your fault, call in’.

With a policy of repair not replace, annual investment on training of £100,000, a commitment to PAS125 and an attitude of ‘right now’ repairs (lead times are one week at most), Alton Cars is well placed to appeal to the private customer.

Company details

Name: Alton Cars
Other trading names: RC Jones, Knaresborough Vehicle Body Repair Centre, Minster Coachworks, Huddersfield Accident Repair
Turnover: £14 million
No of sites: five
No of staff: 120
Annual repairs: 10,140 (AM50)
Annual hours sold: 173,876 (AM50)

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