By Murray Voth
Many automotive service technicians complain bitterly about the lack of compensation, the lack of respect, and the terrible management of the shops they work for. At the same time, many automotive shop owners complain bitterly about the shortage of technicians, how poorly technicians are trained today, or the poor work ethic of the younger generation of technicians.
What both parties fail to realize is that these problems are two sides of the same coin. In fact, they stem from generations of the same dysfunction in the industry: the shop owner is unable to figure out how to make their shop profitable, and as a result does not increase technician wages and thinks that just pushing them harder will make them more profitable.
The technician puts up with this for a few years, remembering that the boss promised him a raise as soon as the shop made more money, and keeps pushing himself until one morning he has had enough. The technician quits and opens up his own shop. Within a few years, he is in the same boat as his previous boss was, and so on and so on.
To begin with, everyone reading this article needs to know that there are profitable automotive repair shops and there are highly paid and highly respected technicians in this industry. And they are not as rare as you might think. But like many things in life, if you have not experienced something, you might not believe it exists.
The solution to this apparently intractable problem starts with automotive shop owners. I have written volumes on how to make an automotive shop profitable, but here I am going to focus on two things: 1) Changing our mindset, and 2) creating the positions we are hiring for, before we hire anyone.
When a shop owner learns that they can make more money with a pencil than with a wrench in their hand, things begin to improve. When they decide that they are in business to make a profit, and not in the business of fixing cars, they can now afford the great technicians they have been looking for. Most shop owners are current or former technicians. Most technicians come from a blue-collar, hourly wage experience. Many hourly wage employees do not understand profit. In fact, many bad-mouth their own employers for being greedy, or wanting to make too much profit. So, you can see how a shop owner might not actually believe in making a profit. They are just happy to be making a wage.
And, because the wage they are making as a shop owner is so low, they resent having to pay someone more than they are being paid. These owners are not shop owners; they are co-workers with their own employees. They are just the employee with the highest risk and the most to lose.
The mind-set change is that profit is good. The industry benchmark for net profit before interest and taxes is 20% of sales. The industry average is 7%. Once you get past 20% net, you can worry about whether you are getting greedy. In fact, some of my best clients have hit 20% net and when they go above that, they share it with their employees.
Shop owners ask me on a regular basis what the average wage of a technician in their market is. I reply by telling them, “What you are asking me is how little can I get away with paying for the most performance. If you pay average, you are going to get average.” The correct question to ask is, “What are the best technicians getting paid in your marketplace?” Now we have something to aim for.
But the best question to ask has two parts: What is the position we are hiring for, and what does that position pay? Answering this question will tell the shop what they can pay and will tell the technician what is expected of them for that level of pay.
I love my acronyms, and the one I am going to use now is ROADS.
R – What are the Results expected from this position? Some examples might be: productivity of 90% and efficiency of 125%. 100% of all vehicles receive some form of inspection. If using digital inspections, a minimum of 12 photos per inspection, and 50% of those photos edited with circles and arrows.
O – What are the general Outcomes expected from this position? Some examples would be: many of our clients’ vehicles ride and run like they are new. Our clients save thousands of dollars in vehicle depreciation by keeping their current vehicle maintained. In other words, we don’t just fix cars; we maintain them. I would add, this position also creates 5-star Google reviews. Too many technicians are disconnected from the impact they have on a client’s experience at the shop.
A – What are the Aptitudes required by this position? Of course, for a technician we would expect that they have a mechanical aptitude. But if we were hiring a diagnostic technician, we would need someone that has the aptitude to work on complex computer and electrical systems. What about the aptitude to learn?
D – What are the Duties of this position? This is where the job description fits in. This is the list of all the specific roles and duties of the position. This would include things like performing test drives when required, performing inspections, filling in work orders properly and writing up a good description of the testing procedures.
S – What are the specific Skills and certifications required by this position? This is where we would list the specific licenses, skills and training required: things like a Red Seal designation, or ability to work on diesel powertrains.
Once this position has been created, the shop owner will attach a cost and a gross profit potential, which translates into what the position pays. Once they have determined what the position is and what it pays, they then begin to interview to the standards of the position. If the applicant does not meet the criteria of the position, they are not qualified for the position. If the applicant meets the criteria, they are qualified to receive that level of pay.
I am convinced that for a technician who is willing to take training, has a little get-up-and-go in their step and is willing to learn from others, there are great wages in this industry. And for shop owners who know how to make a profit, and are able and willing to pay great wages, they will always find great technicians. But more important than everything else is the shop owner’s ability to lead his team. A shop owner that provides a great work environment and holds everyone accountable to quality workmanship, along with mutual respect, will always win over a shop that pays more but does not hold people accountable. Great technicians want to work with other great technicians, and they want to know that they are all being held to the same high standard of quality and professionalism.