The Alliance of Automotive Service Providers of New Jersey (AASP-NJ) announced that industry leaders tackled the subject of labor rates at the NORTHEAST 2022 Automotive Services Show this past March in a featured panel titled, “Labor Rate 2022 & Beyond: How to Get What You’re Worth.”
Veteran industry journalist Joel Gausten moderated as panelists Jerry McNee (AASP/NJ), Lucky Papageorg (AASP/MA), Burl Richards (ABAT), Barrett Smith (Auto Damage Experts, Inc.) and Sam Valenzuela (National AutoBody Research) delved into the reasons for labor rate suppression and how shops can circumvent insurer interference.
“All shops are not created equally, yet we’re treated that way,” said McNee. “The ‘prevailing rate’ isn’t what the insurers claim it is, yet we accept it. Nothing will ever change until we stop crying and do something about it — and it’s what you do in your own facility that will make the biggest impact. Do you even know your break-even point? We’re trading time for money, and I’m not here to make a deal; I’m here to run a business, so I’m going to charge my posted rates based on my costs.”
“Collision shops can’t continue playing insurers’ games by their rules,” Valenzuela noted, referencing the value of shops participating in NABR’s LaborRateHero.com surveys as a way of creating “transparency, which allows other shops to make better decisions. “We have to start thinking in terms of market-based labor rates, which is why it’s so important to have a posted rate based on business costs and what the customer will pay. Shops need to use data to make those decisions; without data, you’re just guessing.”
Unfortunately, many shops don’t truly know how to properly establish their labor rates.
“Everything starts with education, but then you have to actually go out there and apply what you learn or nothing changes,” said Richards. “If you took time to come here and learn something from your industry peers, you need to do something about it when you get home.”
Smith recommended following OEM procedures and showing customers how their vehicle manufacturers want their cars to be repaired.
“It’s a perfect opportunity to demonstrate your professionalism, earn trust and build that relationship,” Smith said. “Shop owners often started their career as bodymen, but they need to become better businessmen. You’re the problem, but you’re also the solution.”
Plans are underway for NORTHEAST 2023 March 17-19 at the Meadowlands Exposition Center in Secaucus, N.J. For more information, visit aaspnjnortheast.com. For more information on AASP/NJ, visit aaspnj.org.