Service Departments drive a dealership’s Fixed Ops profitability. However, today’s dealerships are feeling the pressure of a significant technician shortage, exacerbated by industry changes, supply chain disruptions, and unforeseen global events. As a result, the average wait time for customers to get their car fixed has increased, sometimes stretching to a week or more, due to staffing issues. For example, Ford has highlighted the severity of the current technician shortage, noting that thousands of service bays at Ford dealerships are going unused simply because there aren’t enough technicians to staff them.
As many dealerships navigate these unprecedented events, service managers often lack the time and tools to enhance the capacity of their current technicians. Many cannot plan for future capacity or see how it affects revenue and profitability. Additionally, gaining the insight needed to make long-term departmental enhancements that improve technician retention, pay, and job satisfaction proves challenging. Businesses also face higher operational costs from turnover, increased wages, and longer training for new hires. Therefore, dealerships that improve wages, working conditions, and invest in training gain an advantage in attracting and retaining skilled technicians.
This article will help you effectively manage the technician crisis by optimizing current staff, maximizing CP labor rates and pricing compliance, and finally by building a winning team that consistently meets expectations and long-term projections. Optimizing staff and processes directly addresses the issues driving the technician shortage.
Optimize Existing Technicians
Time is a precious commodity. The first step in tackling the tech shortage is to make the most of the staff you currently have in your service drive. Focus on three areas: examining technician time, measuring productivity, and predicting technician capacity. Specifically, focusing on these areas is essential to maximize technician productivity. First, looking at the different types of technician times, then measuring productivity, and finally understanding and predicting technician capacity, with the main focus on optimizing technician time and capacity to address the shortage. Additionally, modern equipment requires technicians with advanced diagnostic and digital skills that are not always available in the current workforce. Technicians must become certified and receive regular training to work on the latest vehicle technology.
4 Types of Technician Times
There are different types of technician time that should be considered when optimizing your existing staff. This step is critical to maximize the capacity of the technicians already in your service drive.
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- Scheduled Time: Hours technicians are scheduled to work, excluding holidays, vacations, and training. Scheduled time provides a starting point for projections.
- Present Time: Hours technicians are onsite and available for work. This accounts for lateness, early departures, or absences.
- Assigned Time: Hours technicians spend on assigned jobs, including moving vehicles and handling parts.
- Booked Time: Hours technicians are paid for completed jobs, which often exceed assigned time.
Measuring Productivity
Once you analyze how your technicians use their time, you can measure productivity. The goal, of course, is to be 100% productive and/or efficient (depending on your OEM’s language). Productivity measures the percentage of the hours that the technician is present are actually assigned. Service advisors are responsible for selling the needed volume of work, while management that assigns the work, keeps the shop busy.
Technician Capacity
Technicians’ capacity limits revenue and the volume of work your service drive can handle. The best place to start is to develop a plan that provides sufficient capacity to enable desired revenue as the year progresses. Capacity is best determined using a “bottom up” strategy focusing on individual recent prior performance technician by technician.
To create a technician capacity forecast, review the past 60–90 days of work mix, labor sales, ELR, technician pay, gross profit per hour, parts sales, and more. This analysis establishes the baseline for forecasting and planning.
Manage CP Labor Rates & Pricing Compliance
After analyzing and maximizing technician time, focus on labor rates and pricing compliance. In your service drive, you should strive to charge the “perfect price”.
The “perfect price” is not so high that it impacts retention, but also not so low that it leaves profit on the table. Determining the “perfect price” depends on your geographical location, the type of work, and the customer type. From there, your Service Department will have the operations in place to pay your technicians well, and continue to bring in work from new and returning customers. Included in this are a few elements you should be aware of, including types of work, types of customers, and warranty labor and parts.
A strong organization and structured programs, such as training or certification initiatives, are essential to ensure consistent pay and career development for technicians.
3 Types of Work
- LOF (Lube, Oil, Filter): Requires minimal skill and also has a highly visible “market price”.
- Maintenance: Relatively unskilled and has a visible market price. It is essential that your pricing remains competitive in your market.
- Repair: Requires advanced tools, technology, and technician skill. Factors such as labor, parts, shop supplies, and taxes all go into the job price.
Types of Customers
Service advisors can adjust prices in numerous ways, and the type of customer being serviced can impact pricing. The different types of customers include: retail customer pay, dealership employees, fleets, insurance companies for extended warranty, OEM warranty, and dealership for internal. Having this in mind will help with pricing compliance to ensure continuity across the different services for each type of customer.
Warranty Labor and Parts
With CP labor rates and pricing compliance dialed in, you can reap the benefits of warranty labor and parts. The rules that govern warranty labor and part rate calculations are complex, but most dealerships can apply for an increase every 12 months.
Labor
Warranty labor is reimbursed by applying the labor times in the OEM warranty guide to the OEM approved labor rate. However, while it isn’t prevalent across the country, there are a few states where the law requires reimbursement at a retail rate. CP labor rate determines your warranty labor rate for similar jobs, so the more effectively you manage CP labor rate, the more you’ll be entitled to!
Parts
Warranty parts are reimbursed by applying the OEM approved parts markup percentage to the cost of the warranty part. As with labor, a well managed CP parts makeup, the more you could be entitled to for warranty parts.
Building Partnerships with Training Institutions
One of the most effective strategies for overcoming the technician shortage is partnering with training institutions. By collaborating with schools, colleges, and specialized programs, dealerships fill technician gaps while maintaining a steady talent pipeline.
These partnerships offer a win-win solution. Students gain hands-on experience with the latest equipment, while dealerships access motivated new technicians ready to start their careers. Many technicians begin in these programs, learning technical skills and key qualities like work ethic, teamwork, and adaptability.
Making Training Accessible and Beneficial
Training costs and equipment access can create barriers. Therefore, dealerships can provide resources, internships, and scholarships, making technician careers more accessible. This approach ensures a workforce ready to use advanced automotive software and diagnostic tools.
Moreover, supporting industry-relevant curricula improves productivity, job satisfaction, and workforce adaptability. Instructors and experienced techs collaborate to design courses that reflect real-world challenges, preparing graduates for modern vehicles—from cars to diesel trucks.
Securing the Future of the Automotive Workforce
By partnering with training institutions, dealerships ensure a steady supply of technicians who work hard, grow within the company, and contribute to business success. Additionally, these partnerships reduce recruiting and training costs, as students enter the workforce with a solid foundation and a clear career path.
Ultimately, building these partnerships strengthens the automotive industry and transforms technician careers into long-term opportunities.
5 Steps to Build a Winning Team
Bring the work you’ve done with your existing team full circle by following these steps to recruit, train, and retain the right talent. There are specific lessons to learn from building a sports team that can be easily applied to your dealership in combating the technician shortage. To develop a winning team, follow these guidelines:
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- Recruit the Right Personnel: People are the foundation of a winning team. Hire skilled technicians who can learn, work hard, and collaborate. Include candidates with mechanical, diesel, or engineering backgrounds.
- Develop the Right Playbook: Your playbook is equivalent to a written step-by-step guide to the processes within your Service Department. Document processes and update them as staff and tools improve.
- Coach the Playbook: A strong playbook is useless without the proper framework to effectively teach it to your staff. Use the “Wooden Method” of explanation, demonstration, imitation, and repetition to instill habits.
- Understand the Key Performance Indicators (KPIs) that Lead to Winning: Use data and analytics to drive decisions and optimize performance.
- Repeat: Practice consistently to form habits that boost performance and help the team succeed.
This article provides short- and long-term strategies to tackle the ongoing technician shortage. By optimizing staff, improving labor rates, investing in training, and building partnerships, dealerships maximize current resources and create a skilled, motivated workforce. These steps make your dealership a better place to work, with competitive pay, high productivity, and a busy service drive.
Dynatron Software makes running your Fixed Operations easier and more profitable. Contact us today to learn about the opportunities that exist in your Fixed Ops department!
Source:
Ford’s Jim Farley raises concern on shortage of skilled service workers