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That was then …

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An unthinkable thing happened on Jan. 14,
1914: Henry Ford had the audacity to raise Ford Motor Company’s
minimum wage to $5 a day – and then, as if that weren’t enough,
he allocated $10 million of the $25 million in company profits
for his workers. This will ruin the industry, critics wailed.
Workers will demand more and more until there’s nothing left!
But Ford wasn’t swayed.

"I like to see folks who work hard get
their share," he said in response. "I would rather give
our boys a part of the profits."

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There were, however, stipulations. To qualify
for Ford’s $5 a day, workers had to have a comfortable home and
were forbidden to crowd every room with borders. In fact, Ford
had the audacity (no sarcasm this time) to send company men to
investigate their living conditions! Workers also had to prove
they were saving and had to report where they were spending their
money.

No kidding.

These rules were taken so seriously that Ford
employees who didn’t measure up were fired.

This is now …

While more and more business people today
are offering benefits and a piece of company profits – like Ford
did – today’s shop owners are just happy to find employees. It
takes a lot more to get fired these days – in part, because it
takes a lot more to find a replacement! For that reason, most
owners are searching for more effective ways to retain employees.
How? Some, by offering more benefits.

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When looking at the U.S. Bureau of Labor statistics
on health and retirement benefits for full-time workers, collision
repair businesses, in general, offer fewer benefits than most
businesses. Statistics also show a significant technician turnover
rate in the collision repair industry (22 percent annually), and
it’s even higher for shops that don’t offer benefits – a whopping
45 percent annually according to the I-CAR Education Foundation,
almost twice the rate of those that offer one to two benefits.

Benefits commonly offered by collision repair
shops include paid vacations, health insurance, life insurance,
tuition reimbursement, retirement and profit sharing.

But benefits alone aren’t enough. There’s
still that little thing called salary that’s often the determining
factor in luring – and keeping – technicians. The majority of
respondents pay their techs hourly (41.3 percent, down from last
year’s 46.5 percent), followed by those who pay them a percentage
of the flat rate (21.4 percent), a percentage of the labor rate
(15.5 percent), salary (13.1 percent), an hourly wage and commission
(12.6 percent), a salary plus commission (8.3 percent) and other
(6.8 percent).

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According to I-CAR Education Foundation statistics,
the national annual income in 1995 of a collision-repair technician
(a journeyman or production technician) was a respectable $32,300
(35 percent higher than the national average) – compared to a
carpenter ($30,900), an electronics technician ($30,300) and a
medical lab technician ($25,800). (There’s money to be made in
this industry, but people – parents, high schoolers, guidance
counselors, the general public – don’t know what they don’t know.
It’s up to the industry to tell them!)

Respondents do, however, expect to pay entry-level
technicians less than half of a journeyman’s wages. And this is
getting easier to do considering that experience levels dropped
again this year: 19.2 percent of respondents’ employees have less
than one year of industry experience (as opposed to 16.6 percent
last year), while only 6.2 percent of employees have more than
20 years experience, which isn’t shocking considering that as
many technicians approach age 40, many either leave the industry
or move into nontechnical jobs. Note: Currently, women represent
only about 1 percent of the technician work force. Statistics
also show that only 1 percent of technicians work as technicians
until they retire.

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For reasons such as this, many shop owners
say they feel like they’re constantly searching for employees
– and to no avail. Said one shop owner in the Midwest: "It’s
tough to find employees because the only things we really have
to offer are clean air and a low crime rate."

And when employees are found, they’re often
inexperienced – one of the reasons training is becoming more prevalent.
While most companies budget about 10 percent of their revenues
for employee training, past surveys have shown the collision repair
industry, on average, spends less than 1 percent. But that seems
to be changing.

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Of our respondents, 81.8 percent said they’ve
sent at least one employee to a training session in the past year.
When asked for the number of days the shop has collectively spent
in training in the past year, 46.5 percent said one to five days,
23.8 percent six to 10 days, 7.6 percent 11 to 15 days and 22.1
percent (up from 18.7 percent) more than 15 days.

Almost 58 percent of our respondents had at
least one ASE-certified employee, and of this 58 percent, on average,
3.79 techs are ASE-certified – interesting because shops now have
an average of 7.8 employees (up from last year’s 7.3). Minus the
statistical jargon, this means that of the shops that do have
ASE-certified techs, half of them are certified.

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But inexperience isn’t the only reason for
increased training. Another reason: Company productivity increases
as the education level of its workforce increases. A 10 percent
increase in education level jumps a company’s productivity by
8.6 percent, and a 10 percent increase in employee training raises
overall productivity by 2 percent.

Training benefits the employees as well. As
mentioned earlier, the average collision repair technician earns
an annual salary of $32,300 – and an educated technician makes
47 percent more than a technician who has received no training.

Why such a pay increase for educated techs?
Because the industry is becoming much more complex. It’s been
estimated that technicians must be able to interpret 500,000 pages
of technical text to be able to repair any car on the road, and
new information is being produced at a rate of 100,000 pages per
year.

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Besides being good with their hands, technicians
these days also must possess good cognitive skills and have a
solid understanding of math, science and electronics. These skills
are necessary because nearly 80 percent of a vehicle’s functions
are now controlled by a computer – compared to about 18 percent
five years ago. In fact, there’s more computer power on today’s
vehicles than on the Apollo lunar lander that put the first man
on the moon.

Because body shops in the ’90s more closely
resemble a computer lab than a garage, technicians of today –
and tomorrow – as noted by our respondents, need more training
and schooling than ever before to keep up.

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