The U.S. is facing a critical, ongoing shortage of auto technicians. It’s a perplexing dilemma that no one seems to be able to solve on a consistent basis. Even with the reduction in miles driven by individuals and businesses in 2020 which should have eased demand for automotive, diesel, and collision repairs, there is still a massive shortage of auto technicians. This occurred even though many dealerships and aftermarket repair facilities needed to close their facilities for a period due to the pandemic, and then also had to furlough some employees upon reopening.
Yet, experts and industry leaders have been warning us about this since at least 2012. For example, Charlie Gilchrist, past NADA Chairman, estimated a few years ago that their approximately 16,500 member dealerships were going to need at least 76,000 technicians between 2020 and 2026, just to keep pace with demand.
In a TechForce Foundation report from 2020, it was noted that the industry would be short by approximately 642,000 technicians (automotive, diesel, and collision) between now and 2024!
Both well-respected organizations clearly see the same issues and concerns, and both have identified underlying issues that are very similar. A few are identified below:
- The aging baby-boomer technician workforce is retiring in larger numbers each year, with some estimates as high as nearly 9% annually.
- Relatively high turnover. For example, NADA studies indicated that B-Technicians at auto dealerships are turning over at approximately 31% per year, with a high percentage of this group being in younger generations.
- Fewer technicians are graduating from the ten largest providers of post-secondary automotive degrees: just 5,015 in 2018 according to the TechForce Foundation.
- The number of women is extremely low in any area, with women representing less than 1.5% of all technicians in the United States.
We have got to work as a unified group to repair this problem. And we can!
Training Within the Industry
First, as an industry we have a very good story to tell. I have worked in and around the automotive business for 40 + years and have seen young people come to work at a dealership while in high school or shortly thereafter, enter apprentice programs with the OEM-supported schools, and become a full-line Certified Technician within two years. During this time, they were paid for working at the dealership while training. They also received assistance with purchasing tools and career pathing along with ongoing education and certifications to help them understand the future opportunities that are available in our wonderful business. I have also had the good fortune to be able to see many of these technicians move on to other fixed operations and executive positions such as Shop Foreman, Service Manager, Fixed Operations Director and even General Manager.
I know that at least nine OEMs currently have robust technician training programs focused on growing and certifying technicians and providing assistance with tool purchases and funds for training.
Various national repair chains are also in the process of improving or creating substantial training and career pathing programs to encourage potential technicians to join them, along with tool purchase assistance.
Nurturing Young Talent
We also have a large number of people in the workforce who may have wanted to be a technician but embarked on a different career path years ago. They now find themselves unhappy and in mid-career and would welcome the opportunity for a career change. How can we reach them? For example, we know that approximately 40% of all college enrollees drop out, and of those who return, less than 65% graduate. Often, these students are saddled with debt and headed toward a dead-end career.
Another issue we have at the middle and high school levels is that guidance counselors and parents are often not fully aware of the opportunities that the industry can provide.
What MarketSource is Doing
Working with OEMs, dealers and national repair chains to increase awareness among middle school, high school, and all other folks looking for a career change is something that we at MarketSource work closely with our clients to make happen. We are focused on helping young people recognize their special skills and acumen earlier and helping them improve their future. Our experience tells us that we must also engage with the parents of these young people to help them understand the wonderful opportunities that exist for kids with this sort of talent. It is also very exciting for us and our partners to help adult learners alter their career paths in a way that can steer them on a path to success.
Improving Customer Satisfaction
Of course, another extremely important part of this initiative is to increase overall service parts and labor sales and customer satisfaction scores, by being able to successfully complete repairs on more vehicles while minimizing customer wait time. Due to the shortage, many dealerships are having to schedule appointments for simple maintenance repairs that would normally be performed immediately, resulting in customer inconvenience or even the risk of customers going elsewhere for the repair.
This causes a considerable loss of revenue and does not maximize the service bay opportunity. For example, NADA data from mid-year 2020 illustrates that the average Customer Pay Repair Order at a dealership was $329, with the parts-to-labor ratio of almost 1:1. A top-performing technician can be expected to turn 9 hours of flat-rate labor per day. Utilizing these numbers, it means that the dealership would be losing about $2,961 in daily parts and service revenue. Assuming the dealership is open 21 days per month, that equates to $62,181 in lost parts and service revenue per stall. The unique thing about service labor is that you are selling “time” and when it is gone, it is lost forever.
On another note, although not easy to calculate, I would argue that you are also probably losing some valuable customers who did not want to wait to have their services performed and went down the street to a competitor….
Tech Recruiting is Key
At MarketSource, we currently have multiple programs where we are working with our automotive OEMs, their dealers, and technical school partners to expand student and parent interest in the advantages of a technician career.
Our team members work closely with dealers to coordinate, develop and monitor impactful mentorship programs. These programs are designed to ensure that qualified students can “earn while they learn” and receive the support and assistance they require.
Some critical components of our tech Recruiting program include these successful steps:
- Create dealership Action Plans to meet the needs of current and future technician, advisor, management and other roles
- Interview existing employees to gather valuable insights and gain an understanding of their career aspirations; then review with management
- Create and review career path plans with manager and employee upon management buy-in
- Monitor employee training and progress towards stated goals; revise as needed
- Assistdealershipswith school and other community relationships focused on building and maintaining a strong tech pipeline
- Celebrate the successes of technicians and other key service positions as they move through the pipeline
- Assist OEM partners with adding schools in areas that are in need
- Track dealership retention, open days per position, etc. from pre-program start to current (tangible results)
In the first few years of implementing our programs, MarketSource saw tangible evidence of the success, with our OEM partners realizing a net increase of technicians of 1,492 nationally. Last year, due to COVID-19, many of our partner dealers had to cut back some of their technicians, so in many cases, we are partnering with them to help them get a full complement of technicians back in the shop, while still concentrating on filling the recruitment pipeline.
Our OEM partners see the value of assisting dealers in this area for a few reasons:
- Increased OEM parts sales
- Increased customer satisfaction scores and sentiment (done quickly, with the best parts, by specially trained OEMtechnicians)
- Increased customer retention: Happy and satisfied customers stay with their brand!
- Increased dealership revenue and profitability: Solid and stable dealers help keep customers happy