News: Consolidator Report
The talk about the lack of the human resources in this industry.
“Youth today don’t consider this field as an option for a career, and the older workers don’t want to improve their education. What can shop owners do?”
– Davina Irene Gongora, assistant manager, Gongora’s Body & Paint, Pomona, Calif .
I, for one, am growing more than a bit weary with all the talk about the lack of the human resources in this industry. Year after year it’s a topic of discussion at NACE, regional conferences and local association meetings. Month after month you can find some trade publication writing about it. And here we go again. But this time, as someone who has a great deal of knowledge and experience in this field, I challenge this industry to actually do something about its human resources problem rather than simply talking about it and reading about it.
Are you ready? Are you up for the challenge? Are you going to take the necessary time to address this issue? Prove it! Implementation is key. Twenty-group leaders and consultants tell me all the time that shop managers get pumped up by all the great ideas and suggestions they receive, and then they go back to their shops and what happens? Nothing. Back to business as usual.
So what’s it going to be? If I provide you with a batch of suggestions and proven ideas and techniques, are you going to try some of these suggestions? They may not all work for you, but if you keep trying, something will. And, frankly, you have little choice.
Fact: Shops are losing the war on human resources. The most important challenge today is that of attracting, training and retaining technical human resources. It’s also the area that shop owners and managers are poorest at. They’ve struggled with it for so long that many have all but given up. They haven’t had training on how to handle human resources, and they haven’t established a system and followed it. The easy way out is to hire experienced techs from somewhere else. And most take this out rather than taking the steps necessary to participate in the long-term solution to this challenge.
Recently, I was at a leading Midwest shop, when a truck pulled up. In the back of the truck was a large toolbox on wheels. I asked the owner if one of her techs had just bought it, and she told me that a new, highly experienced tech was starting in her shop in a couple of days. And these were his tools.
It happened right before my eyes. Some shop had just lost a good technician, who likely produced in the neighborhood of $150,000 to $200,000 in revenue for his previous employer – and was now going to do the same for his new employer. This left his former employer with a void to fill. What do you want to bet this former employer tried to find another experienced tech from someone else’s shop?
It happens every day. But what does this do to solve the long-term tech shortage problem? Nothing.
When you hire an already- employed technician from in or around your hometown, you’re “raiding,” plain and simple. While that’s perfectly legal, it’s counterproductive to the long-term health of this industry. And if you think this practice will enhance your image with the employee, think again.
When you take an employee from a competitor, it’s fair to assume that your competitor and others are likely to call upon your people as well. The war is on. And technicians realize they can leverage you for more money, benefits or other perks, or they’ll simply move on whenever and wherever they desire. If you like the free agency situation in pro football, you’re going to love it in this industry.
But where’s the loyalty to the team? Where’s the loyalty within your shop?
The prominence of raiding tells me that most shops don’t have a clue as to how to bring new help into the industry to alleviate the shortage. But let’s face it, at some point you have to start growing your own. Stealing from other shops isn’t going to fill the shortage.
Somebody’s Knockin’ – Let ‘Em In
When it comes to human resources in general, most shops have little hope, few answers and no idea what to do to about the shortage of technical help. The franchisors, consolidators and a few enlightened independents and dealer shops are among the only ones working on permanent fixes for the technician shortage.
Twice in the past year I’ve heard from frustrated entry-level candidates after they’ve knocked on door after door, seeking beginning training in one case and additional training in the other. Time after time, they were turned away. The shops where they applied only wanted to hire experienced techs. Yes, these shops were looking for people, but not entry-level people.
These aren’t isolated incidents either. Happens all the time. And still this industry complains and continues to raid experienced techs.
I received an e-mail yesterday from a mother looking for good schools and employers in her area. I receive these kinds of inquiries all the time, and sometimes I cringe – depending on what area they’re from, the quality of the school training programs in that area and whether I personally know shops in their area. I often caution these people that they may not receive a warm reception but that they should keep trying and looking for progressive shops that are willing to give new people a chance. And I urge them to look for shops that have a system in place to help make that happen.
Isn’t that a shame?
If you take this issue seriously – and you’re doing something about it – you’re in the minority. As for the rest of you, I think, perhaps, that you’re getting exactly what you deserve. You complain, but what’s it going to take for you to do something about it?
What You Need to Know
Here’s a list of the struggles that management must – in my opinion – understand if they’re going to hire and retain quality technicians:
1. Compensation Shortfall
– Technician pay isn’t favorable compared to what the tech has to know and do. Employees often leave because they’re not paid enough. And compensation includes benefits. A spouse or significant other will pressure your employee to leave if benefits aren’t competitive. Are you competitive with other shops in your area? Are the insurers you work with aware of this issue and willing to work with you to attract and retain quality workers?
Do I think it’s realistic that insurers will pitch in? Yes and no. Some insurers are supporting the training of experienced techs and partnering with some schools – and that helps them, too, because better-trained techs get the job done right the first time and finish it faster. When the employee crunch really hits this industry hard, the work will pile up. It’ll take weeks, maybe even months, to get a car fixed because there won’t be enough hands to do the work properly. CSI numbers will plummet.
There’s an insurance company that’s providing local shops around Washington, D.C. with apprenticeship incentives, where they help to pay some of the wages. I’ll be meeting with them in the coming weeks to learn more. It’s my contention that insurers should make having an apprenticeship system a priority for shops – and help to make it happen, either by adding it to DRP requirements or by helping to subsidize it in some way. They can help to raise the bar and force change where change clearly needs to be made. And they stand to gain from every dollar they spend on this, especially when you consider the future without enough techs to get the job done in a reasonable amount of time.
Some shop owners, however, contend that there isn’t shortage of quality technicians – just a shortage of pay. “Let me run an ad at $75,000 for a technician with a good benefit plan, and I’ll have quality people, capable of repairing any vehicle, lined up for a block,” says one shop owner.
So what are shop owners doing to to address this compensation problem? Gene Hamilton – owner of Sports and Imports in Duluth, Ga., just outside Atlanta – starts new people on a salary, then provides incentives, like salary plus 10 percent of flagged hours. This way, they can work their way up to flat rate. Hamilton also provides a tool allowance. Lack of tools is a huge disincentive for new people entering this industry.
2. Technology and Quality Advances
– Vehicles are astoundingly more difficult to repair these days than they were 10 years ago. And it’s become obvious to long-term techs that they’re required to know more, do more and be more precise – all while potentially falling backward economically.
To keep up with the rapid technological changes and to meet employer and insurer expectations, techs must seek continuous training throughout their career. But not all do. Does your shop stress training? Do you pay for it? Are techs regularly getting OEM, I-CAR, paint company or equipment manufacturer training?
How about ASE certification for your techs? You may want to pay for it and make it a shop goal. Why? Certified techs take great pride in their skills and knowledge. Also, certification instills confidence in the eyes of the consumer. Though a consumer may know nothing about our industry, he can relate to certification because it communicates to him that there must have been some understanding of, or conformance to, standards.
3. Safety and Environment
– Recent research shows that most shops aren’t in compliance with basic laws that protect workers. Experienced, long-term techs have, more or less, either dismissed the environmental and health hazards of working in this industry or have accepted it as an occupational hazard. And it’s alarming how many shops out there are non-compliant. But younger people seem to be more in tune with environmental and personal well-being. They heard so much about saving the planet during grade school on up that when they see non-compliance in a shop and speak up – only to be put in their place – they leave, plain and simple. One recent survey showed that young technicians who recognized the risk to their bodies left the shop before they could become ill.
Shops need to invest time and effort into getting compliant. This will be crucial in recruitment and retention of future entry-level techs.
Teresa Kostick, owner of All Line CARSTAR in Bolingbrook, Ill., agrees, saying that shop image has a great deal to do with attracting new hires. “I show prospects a nice, clean facility, with all the equipment needed to get the job done – and all the equipment works,” she says, adding that she won’t let anyone start working until the employee has the necessary safety equipment and training. “We stress safety and protecting the environment from day one.”
And if her employees buy, for example, steel-toed boots, she pitches in for half. Talk about setting expectations and rewarding staff accordingly.
A great resource for compliance information and employee training regarding safety and the environment is the Coordinating Committee for Automotive Repair (www.ccar-greenlink.org). For those who want to be proactive about being compliant with EPA and OSHA regulations, CCAR is offering an online training program called S/P2, which stands for Safety and Pollution Prevention. The S/P2 training is offered to all employees within an automotive operation, from the front office to the back shop. CCAR is also currently delivering S/P2 to schools across the country so students come into the workforce ready and able to meet safety and environmental requirements.
4. Prospecting and Hiring Methods
– You are who you hire. And your company reflects greatly on your ability to hire. If you hire poorly, you operate poorly. Though most shops think they have few options for hiring, the fact is, opportunities are all around us if we simply open our eyes.
Think about the people you come into contact with every day. There are lots of people in the service industry – like oil change shops, for example – who’ve reached the top of their current earning potential and are looking for better opportunities. Carry information with you at all times, and when someone you come into contact with impresses you, hand him a flyer and give him your card. You should be recruiting all the time.
And don’t overlook local schools. Some shops, like Kostick’s, have recruited their best talent as a result of their ongoing partnerships with local schools. And because they’re such an active partner with the schools, Kostick’s CARSTAR typically gets the cream of the crop coming out of those programs.
You reap what you sow. If you’re fortunate enough to have a good school in your area, take advantage of that fact and participate year round. Those shops that call upon schools only when they need people get little or nothing in return.
If you want the students, you also have to treat them right when you do get them. Hamilton – who frequently speaks in front of groups of students – tells them to look for shops that have a plan to train them and not to go to work anywhere that will have them sweeping floors at the beginning. “We have a commitment to training them,” says Hamilton. “Sweeping and taking out the trash isn’t a part of that.”
According to Hamilton’s production manager, Mike Day, the best candidates are the ones they’ve either cherry-picked out of the schools or those who’ve walked in off the street aware of the shop’s reputation. They’ve had little luck with newspaper ads. In fact, I’ve yet to find any shop that’s been happy with the overall response they’ve received from a help-wanted ad in the paper.
Besides local schools, there are other places you can look for recruits. For example, the Army has a program called the Army Career and Alumni Program (ACAP). Hundreds of thousands of talented and experienced veterans leave the military each year, and their honorable discharge shows that they’re trainable, dependable and willing to work as a member of a team. This is a great resource and, best of all, it’s free! You can create and manage your own job listings at no cost, and these listings are accessible by all members of the Army as well as by the other military branches.
ACAP offers other options, too. Check out their Web site at www.acap.army.mil/index.htm.
Are You Offering Entry-Level Training?
The OEMs have their well-financed Automotive Youth Education System (AYES) and strong community college partnerships that bring new techs into dealerships all year long. Compared to these OEM programs, the independent collision industry is far behind and underfunded. Dealers are easily winning the game at the vocational schools and community colleges.
Though this is important to keep in mind, it may not be as big of a deal 75 percent of the time. Why? According to the I-CAR Education Foundation, our industry is only getting about 25 percent of its entry-level employees from schools – the rest come in off the street with who-knows-what training or experience, if any. And some schools, frankly, aren’t worth the effort to partner with anyway.
On the other hand, some are. The OEMs require schools to be ASE-certified before they’ll partner with them, but this limits their outreach since relatively few schools are certified. Besides, there are some really good programs out there that aren’t certified that need your support and involvement. The key is to find them. I estimate that at least a third of the schools out there offering automotive training are just hobby and restoration programs – and aren’t teaching the skills necessary for today’s industry. How do you determine if the school is teaching the necessary skills? Is the school ASE certified? (Probably not since only 200 out of 1,400 are.) If so, that’s one of the best ways to know. You can also tour the school. See their equipment, and ask to see their curriculum. Try to figure out for yourself how many years behind the times they may be. Look at the cars they’re working on. Are they newer cars, or are they student cars that they’re restoring and customizing?
Let’s say you do find and hire an entry-level employee. Now what? Less than one quarter of 1 percent of shops have formal, in-house training programs. This is of great concern to school instructors, who train a student to a certain level and then turn him over to the industry. Do the shops that hire these students have a system to take them to the next level, helping them to become fully functioning technicians in their own right? A few shops do, but these shops are few and far between – which is precisely why I founded [email protected] last year.
[email protected] provides an online system for the implementation of a workplace apprenticeship program. These services are provided online, 24 hours a day, seven days a week and can be accessed at www.mentorsatwork.com. Once the system has been implemented, mentors and apprentices are carefully selected based on characteristics specified within the system. [email protected] can validate management choices for mentor/apprentice candidates through an online interview process, and provides online training for management, mentors and apprentices so they’ll fully understand the role they play in the partnership.
[email protected] also provides e-mail and phone support throughout this ongoing program, along with online tracking programs specific to the collision repair and auto service technology industries. Apprentice evaluation and tracking is managed online using a highly specialized tool that’s based on industry-accepted task lists, developed to give management and the mentor a road map to follow. The task/competency lists are tailored to each individual apprentice, and the system provides the flexibility to train in specialty areas like painter’s assistant, body assistant, painter, body tech, etc. The system also helps shops create an internal career path that will help show upward mobility potential within a shop – a key factor new hires look for.
Mentoring personalizes training. It’s one-on-one, and it shows the employee that the company cares. And when you can create quality workers yourself or in partnership with vocational schools and community colleges, you’ll have an advantage over your competitors – who will continue “raiding” experienced techs from other shops.
I know what you’re likely thinking: “If I train my own people, they’ll just go somewhere else for a little more money. So I lose them and my investment in their training.”
Sure, that could – and probably will – happen from time to time. But hang in there. I’m about to tell you how you can cut down on lost employees.
Treat Them Right
How people are introduced on their first day and how they’re treated during their first three days has an unbelievable correlation on how long they stay with a company. We call it a first impression, but human resource directors call it orientation.
When people are introduced well (as apprentices, students or semi-experienced new hires), they tend to stay with that employer and in the industry. Initial professionalism leads to immediate good feelings and trust. Then, if employees continue to be treated well with training, growth opportunity, benefits and the feeling of being needed, they stay. Positive orientation is a key to retention. Unfortunately, the collision industry doesn’t implement or orient new recruits well.
Typically a new hire in the collision industry is matched with an unprepared tech in the shop. This tech is likely on commission or flat rate and sees taking his own valuable time to train another as money off his table. What’s in it for him? And new hires in this environment don’t feel wanted or needed – and don’t last long.
Well-prepared shops, ready to take on an apprenticeship, have a team of techs who welcome new hires and are dedicated to making them a part of the team. And management exposes new hires to the big picture of what happens in the shop – from drop off to delivery – so they see that employees are all part of the engine that runs the shop. And new hires are paid while they learn about that engine.
A good start in a shop tends to build a new employee who stays with the shop he grows up in. After orientation, management is what holds the tech in the shop. If the production manager is direct and fair, new employees will know that within the first three days. If not, other techs will clue in the new employee quickly and let him know about how long they intend to stay.
What do you think your experienced techs say to new hires? You may want to find out. Kostick’s retention rate has been exceptional. In six years, she’s lost only one technician to raiding, one other left but came back soon after and another left for health reasons. Interestingly, success has its own set of challenges.
“The trouble with retaining our employees so long is they may not know how good they have it here and may eventually leave, thinking that they could have it better somewhere else,” says Kostick. “Having an employee leave and come back helps because he tells others how good it is here.”
To stay current with what’s going on with her staff, Kostick meets briefly with them every day. She also does an employee index survey that anonymously shows employee satisfaction and their feelings toward management so personnel issues can be dealt with before they get out of hand.
Human Resource Best Practices
Other industries are taking us to the cleaners when it comes to human resources. Want the keys to turning the situation around? For those who are ready to do something about it, here are the 12 best human resource practices:
- Work closely with area vocational/technical schools and community colleges that are worthy of your time. Do so year round, not just when you need new employees.
- Check references.
- Pay competitively for your area.
- Provide professional orientation for new hires prior to and upon arrival.
- Have a clear policy manual and job descriptions.
- Provide a competitive benefit package.
- Make sure your shop has the tools and equipment to do the job effectively.
- Emphasize workplace safety.
- Emphasize proper environmental practices.
- Provide good, consistent management.
- Provide in-house and ongoing training.
- Establish a mentoring/apprenticeship program in-house.
Using these 12 points on an ongoing basis, a shop owner will have a better chance at recruiting, retaining and increasing technician competency and stability. There’s no clear answer for compensation, but in all other areas, I hope we see more industry innovation. Innovative shop owners will grow their businesses through their people.
It’s already happening. The best and brightest people at the highest levels of our country’s top collision repair shops are getting a handle on human resources – and learning how to attract and train their own. And everyone else is getting left behind. The question is, will you be one of them? Will you put down this article and go about business as usual? Or will you tear it out of the magazine, hold a staff meeting and do something?
Writer Mark Claypool is president of [email protected] and the executive director of the National Auto Body Council, and was the former executive director of the I-CAR Education Foundation and the former director of development for Skills USA/VICA.
|Robbing Peter to Pay PaulLook at the disappointing lack of our industry’s innovation, represented by these statistics:
– Only “A” or “B” tech related (they’re looking to hire only experienced techs and don’t even want to consider hiring an inexperienced person).
– Determining how to leverage employed, experienced techs from elsewhere, necessary only when a position is vacated or an expansion occurs.