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From the VP: HR – A Necessity for Growing Shops

When you hire an employee, you hire them to be an asset and make money for your company. As assets, they need to be protected just as much as the company needs to be protected to ensure future profitability for everyone.

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Lou Berman is vice president of sales for Collision Care Auto Body Centers. He also consults (out of market) nationwide. He can be reached at [email protected]

from-the-vpFor most MSOs today, the need for a dedicated human resources professional is more evident than ever.

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Human resources is defined as: the personnel of a business or organization, especially when regarded as a significant asset. Also, the department of a business or organization that deals with the hiring, administration and training of personnel.

Assets

When you hire an employee, it’s so much more than just giving them a job description and letting them go to work. You hire them to be an asset and make money for your company. But many companies do not treat employees as assets. If employees are assets, they need to be protected just as much as the company needs to be protected to ensure future profitability for everyone.

There are important factors to consider such as liability protection, employee safety and training (including equipment training and instruction). Proper documentation is also needed to ensure that the training and other information has been properly received by the new employee. This protects everyone.

Imagine an overzealous new hire deciding to operate a vehicle lift without proper training that’s documented and certified. If an accident were to happen, you and your company would be left totally unprotected.

Then there are benefits, employee questions and assistance, employee financial plans, health insurance, etc. When you think about these examples collectively and individually, you can see that if you have two or more locations, you may already need an experienced human resources (HR) professional.

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Documentation

In our company, we have an HR pro-fessional who has a wide array of responsibilities, including documenting that all employees have received periodic, mandatory continuing­­ education on equipment usage. This can be a long and tedious task, but you often receive some type of assistance from the person who sold you the equipment.

For example, let’s say you have a relatively new hire who claims he understands how to operate a Car-O-Liner measuring system. Let’s say a relatively new vehicle comes in that needs frame repair. Then, he botches the repair. In some states, labor laws could prevent you from terminating an employee because of their inability to perform. In Pennsylvania, for example, you could terminate an employee but then, depending on the unemployment hearing, you could be responsible for paying unemployment compensation to that employee for six months to a year. And all that you did wrong was hire them based on what they told you and not their ability to perform.

I’ll go one step further with this example. In our application process, we document and record all certifications, training and experience the potential employee claims to have. Based on that, we can then have a paper trail to document it for just cause. From there, you can go in a few different directions such as re-education, revising the employee wage scale, deciding to terminate, etc. However, none of these options are available without a savvy, experienced HR professional to properly document and gather necessary information to be able to make decisions that are in the company’s best interest.

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Sharing Information

Another example of how an HR representative can be beneficial to a company is through sharing information with employees regarding benefits, incentives and available options that normally get overlooked or don’t get properly discussed.

Most body shop managers tend to focus their attention on production, customers, workmanship and shop safety. Little attention is given to beneficial employee packages like short- and long-term disability plans (and the explanation of those benefits), medical and dental plan options, 401(k), etc.

So many of our employees over the years have said they felt better about their employment with us because we spent time going over these plans. With a dedicated HR professional, you have someone who can spend 10 or 15 minutes with them explaining certain things. If the shop manager had to take the time to do this (which most often do), production and getting cars fixed would suffer.

Exposure

Many shop owners claim that there just isn’t enough in the budget for the additional salary an experienced HR person would demand. I can guarantee you that if you do not budget for an experienced HR person, you run the risk of significantly exposing yourself to workman’s comp claims, litigation, unemployment comp claims and higher percentages of employee turnover.

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I once consulted with a smaller MSO some years ago that was experiencing similar struggles. When I was looking at their P&L, I saw extraordinary amounts of monies dedicated for the items that I just mentioned above. As I went further individually into the specific cases that were causing that financial turmoil, one of the main things I saw was the opportunity to prevent those expenses: an employee claiming at unemployment hearings that there was a lack of training or no training. Remember folks, if it isn’t documented, it didn’t happen! Sadly, the shop owner had shared with me the extensive amount of time he had spent with that employee doing training, but in that particular case, because that time was not documented properly, the unemployment hearing examiner had no choice but to find in favor of the terminated employee. A simple counseling form documenting the training and signed by the owner and the employee would have prevented that problem and eliminated that expense.

It’s amazing to me how many operators don’t use techniques like these to protect themselves until a consultant such as myself comes in and points it out to them. Only then does the lightbulb go off and the operator feels much better about spending a few thousand dollars to have someone like me come in and save them 10 times my fee or make them 20 times my fee, with proven strategy and tactics.

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The Smart Play

I was told for many years that the school of life will teach you whether you want to learn or not. Every collision shop owner and/or manager deals with HR issues whether they want to or not. The smart play is to look at your own organization, consider some of what I mentioned above and see if your expenses are really getting out of hand.

Survey your employees and ask them if they’re aware of all that’s available to them. More importantly, ask yourself if you’ve made them feel like they truly have a home at your company or that they’re an asset to your organization. If you don’t get the answers you’re looking for, it may be time to consider bringing someone in. Your organization will have a much clearer direction, happier employees, and decreased risk exposure to some nasty, expensive, unforeseen situations that could really take away from your bottom line.

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