Brian Gillis recently joined host Hunt Demarest and his fellow guest Tim Shaffer of Level 6 Consulting to discuss the state of the automotive industry and what their shops are doing to adapt in these strange times.
Hunt jumped right into the main topic as he addresses challenges auto repair shops are facing today. As we close out 2021, issues such as parts shortages, technician shortages, and scheduling difficulties dominate shop owners’ minds.
Although many issues are present, Hunt pointed out that most of the shops his accounting business deals with are doing great numbers. Brian and Tim agreed the same was true for their clients, despite the precarious state of the late-pandemic world.
Automotive Industry Scheduling Issues
First, Hunt addressed the scheduling quandary that many repair shops were facing. While needing to schedule two to three weeks ahead may sound like a good thing, it can be hard to keep up with. He pitched to Brian for advice.
Brian pointed out how in this situation, it is inevitable that you may have to turn away some customers. Missing out on quick turnaround jobs such as maintenance inspections leaves easy money on the table. How could we address that problem?
The first area we should address in that situation is staffing. Do we have enough people? We need to take a look at our operations and make sure we even have the space to add on more techs to handle the extra work.
Hunt asked Tim if prioritizing specific customers or jobs ever comes up when work is very busy. Tim confirmed it was true. His shop must find a way to cater to its highest profit jobs and most loyal customers. Being honest with everyone else about delays and making concessions where they can is key. Hunt pointed out that consumers are getting used to delays in all industries, including auto repair, due to supply chain issues. Thus, communicating about delays should be easier.
Is Our Automotive Industry Shop Properly Staffed?
Hunt pitched to the issue of staff shortfalls and shortcomings to Tim. Is this busy time still a good one to examine letting go a problem technician? In his experience, adjusting workflow to one tech to one bay has increased profits, despite putting more work on each worker.
In Brian’s experience with our clients, hiring comes down to two R’s: Retention and Recruiting. We must have systems in place to both hire young, inexperienced workers and pair them up with older technicians who can help them reach the goals owners set for them. Brian pointed out that many unskilled positions may currently pay more per hour than a starting technician. However, we can provide incentives for long term growth which we can use to sell them on these positions. It is hard to argue with hard numbers that mechanics can reach at regular intervals.
Brian mentioned that we must always keep recruiting. Since good techs are the hardest staff to come by, we have to keep our focus on how to reach out to the staff we need. A skilled A-Tech is likely not looking for work, but your service advisor likely knows who the best technicians working in the area are. If you play your cards right, you may be able to lure them in to work for you. Get creative. Be aggressive. Don’t be afraid to go into another shop for a small job and size up their workers.
Training Apprentice Technicians
A listener asked the automotive industry roundtable to discuss the challenge of hiring apprentice technicians when existing staff seems too maxed out help to train them. Tim responded that it takes a team effort from everyone in the shop. Incentives for A Techs who put in extra hours to train apprentices are also a must.
Brian pointed out that the process is a tradeoff. A Techs may lose some work time when they are training apprentices, but the young workers can perform less skill intensive tasks to balance that out. Paying the tech who is doing the training a bonus for the extra effort helps on the other side. Brian also mentioned that many shops are just one technician loss away from going out of business. Therefore, we need to be sensitive to what our techs need, salary and incentive wise. One on one mentoring sessions and continued training are key to keep that connection going. Keep an eye on what other shops in your area are doing, and adjust your incentives in order to keep your best technicians.
Automotive Industry Labor Rate Increases
A live viewer asked if this a good time to increase labor rates. Hunt emphatically says yes! Selling on parts and labor is an antiquated method, and package deals are more common instead. The host made the point that inflation and the increased costs of many other goods and services justify an increase in our hourly rates. Brian made the point that we can’t eat the rising costs of parts. We need to instead incrementally increase what we charge for labor monthly to cover that, as well as to reward our teams fairly. Ask yourself what a dealership can do that you can’t. Why are you charging lower rates than them, then?
Looking Ahead to 2022 in the Automotive Industry
Tim feels that everything in the business comes back to relationships. We want to be the the auto shop multiple generations of families return to. This can’t be done unless we communicate to our customers that we truly care.
Brian again emphasized the importance of staff retention for navigating the future. Regular team meetings, meals together, and retreats can build relationships amongst our staff. They will then be less likely to go elsewhere. Also, loaner cars are a must offer, especially when we have a backlog of jobs. We may be overflowing with work, but we must not become complacent. Consistent phone scripts, key to key friendliness, and great service will pay off when we have to hunt for jobs. Word gets around, whether it’s a good or bad review.
Finally, Hunt asked for one last tip for owners trying to navigate the automotive industry in 2022. Tim said that while business is up, we need to build our cash reserves to prepare for an inevitable downturn. Brian emphasized that we must a positive company culture. Retention is so important, and fostering an environment your staff never wants to leave will pay dividends in so many areas. Keep recruiting the right people, and assure them every day that they chose wisely by joining your team.