Hours per repair order

Hours per repair order is total labor hours sold divided by repair orders closed over the same stretch of time. It answers one question: how much work is going onto the average ticket. Owners watch it next to car count because the two move against each other often enough that reading either one alone gives the wrong story.

How is it calculated?

Take the labor hours billed on every ticket that closed in the period, add them up and divide by the count of those tickets. A shop that sold 412 hours across 168 closed repair orders last month is at 2.45 hours per repair order. That arithmetic is the whole definition, and the only way to get it wrong is to pull the hours from one date range and the ticket count from another.

Two decisions change the number before you start. Whether to include internal and comeback tickets, which carry zero sold hours and drag the average down, and whether to count a ticket that only bought parts. Pick one convention and stop changing it, because a number that moved because somebody changed the filter is worse than no number.

Sold hours or clocked hours?

Sold. Those hours come off the invoice from the book time or the canned job that priced the line, and the Federal Trade Commission describes that arrangement to customers as a flat rate, a published figure "based on an independent or manufacturer's estimate of the time required to complete repairs". The hour being counted here is that published figure, whatever the clock said. What the technician spent is a separate measurement that feeds technician efficiency, and mixing the two turns a sales number into a productivity number.

The distinction matters most on jobs that ran long. A brake job quoted at 2.1 hours that took a tech 3.4 hours still sold 2.1. Hours per repair order does not care what happened in the bay.

Why does the number sag in a good month?

Small tickets. An oil change and a nine-hour front cover job each count as one repair order, so a month full of quick service pulls the average down while total sales climb. That is why the metric only reads correctly against your own history and against average repair order at the same time. A month where hours per repair order fell and ARO held is a mix story. A month where both fell is a selling story.

Comparing your shop to somebody else's number is where this metric gets misused. A diesel shop turning turbo and injection work has tickets nobody running a tire bay would recognize, and both shops can be well run at figures that are nowhere near each other.

What moves it?

The counter, more than the bay. Work that was slow to price gets trimmed off the estimate on a busy afternoon, the customer approves what they were shown, and the truck leaves with findings the tech documented and nobody quoted. Every one of those is an hour that existed and never got sold, and it never appears in a report as a loss.

Turnaround is the other lever. An estimate that reaches a customer after they have stopped expecting it gets a decision the next day, and the second half of the ticket is the half that gets cut, which lands in declined work and in this number at the same time. Time your own turnaround before deciding how much of the gap it explains.

Where does the number lie?

On any ticket the shop never meant to sell. Warranty rework, comebacks, internal vehicle repairs and courtesy inspections each open a repair order and carry no billable hours, so a shop with a comeback problem gets a metric that looks like a selling problem. Decide whether those tickets belong in the count and write the decision down. Pull them out when you want the number to describe selling.

A fleet shop has a fourth category, and it is the biggest one. Federal rules put every commercial motor vehicle on an inspection clock: 49 CFR 396.17 bars a carrier from running a truck unless each component in appendix A "has passed an inspection in accordance with the terms of this section at least once during the preceding 12 months and documentation of such inspection is on the vehicle." Every one of those inspections opens a ticket. Most carry an hour or less of billable time. They are also where next quarter's sold hours get found, so pulling them out of the average and then judging the inspection program on hours per repair order gets the causation backwards.

Sublet is the other one. Work sent out to a machine shop or a transmission specialist shows on the invoice as a dollar figure with no labor hours behind it, so a shop that sublets heavily reads low on hours and fine on gross. Both readings are correct and they describe different businesses.

The sublet line still belongs to whoever wrote the ticket. California's repair act makes the shop declare it up front, requiring the estimate to carry "a statement of any automotive repair service that, if required to be done, will be done by someone other than the dealer", and holding the shop responsible for that work "in the same manner as if the dealer or his or her employees had done the service." The hours went to somebody else. The warranty exposure stayed at your counter, which is the argument for tracking sublet dollars beside sold hours rather than forgetting the ticket ever existed.

Back to the glossary, or measure your own estimate turnaround.