Service departments drive a dealership’s Fixed Ops profitability, but today’s dealerships are feeling the pressure of a significant technician shortage, made worse by industry changes, supply chain disruptions, and unforeseen global events. The result is longer customer wait times, sometimes stretching to a week or more, purely because of staffing. Ford has pointed to the severity of the problem, noting that thousands of service bays at its dealerships sit unused simply because there aren’t enough technicians to staff them.

As dealerships navigate all this, service managers often lack the time and tools to expand the capacity of their current technicians, plan for future capacity, or see how either one affects revenue and profitability. Gaining the insight to make long-term improvements in technician retention, pay, and job satisfaction is harder still. On top of that, turnover, rising wages, and longer onboarding all drive up operational costs. The dealerships that improve wages, working conditions, and training gain a real edge in attracting and keeping skilled technicians.

This article will help you manage the technician crisis on three fronts: optimizing your current staff, maximizing CP labor rates and pricing compliance, and building a winning team that consistently meets expectations. Optimizing staff and processes goes straight to the heart of what makes the shortage so costly.


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Optimize Existing Technicians 

Time is a precious commodity, so the first step in tackling the shortage is making the most of the staff already in your service drive. That comes down to three things: examining how technicians spend their time, measuring their productivity, and predicting their capacity. Together, those are the foundation of maximizing technician productivity.

It’s worth remembering that modern vehicles increasingly require advanced diagnostic and digital skills that aren’t always present in the current workforce, so certification and regular training are part of getting the most from your team.

4 Types of Technician Times

There are four distinct types of technician time to weigh when optimizing your existing staff. Understanding each is critical to maximizing the capacity of the technicians you already have:

  1. Scheduled Time: Hours technicians are scheduled to work, excluding holidays, vacations, and training. This is the starting point for projections.
  2. Present Time: Hours technicians are onsite and available, accounting for lateness, early departures, and absences.
  3. Assigned Time: Hours technicians spend on assigned jobs, including moving vehicles and handling parts.
  4. Booked Time: Hours technicians are paid for on completed jobs, which often exceed assigned time.

Measuring Productivity 

Once you understand how technicians use their time, you can measure productivity. The goal is to be 100% productive or efficient, depending on your OEM’s language. Productivity measures what percentage of a technician’s present hours are actually assigned to work. Service advisors are responsible for selling the volume of work needed, while management keeps the shop busy by assigning that work effectively.

 

Technician Capacity 

Technician capacity sets the ceiling on revenue and the volume of work your service drive can handle. The best place to start is a plan that provides enough capacity to support your revenue goals as the year progresses. Capacity is best determined with a “bottom up” approach, looking at each technician’s recent individual performance.

To build a capacity forecast, review the past 60 to 90 days of work mix, labor sales, ELR, technician pay, gross profit per hour, parts sales, and more. That analysis becomes the baseline for forecasting and planning.

 

automotive technician

Manage CP Labor Rates & Pricing Compliance 

After maximizing technician time, turn to labor rates and pricing compliance. The aim in your service drive is to charge the “perfect price.”

The perfect price isn’t so high that it hurts retention, but not so low that it leaves profit on the table. Where it lands depends on your geographic location, the type of work, and the customer. Getting it right gives your service department the foundation to pay technicians well and keep bringing in work from new and returning customers. Three elements factor in: the type of work, the type of customer, and warranty labor and parts.

Strong organization and structured programs like training and certification are also essential to consistent pay and career development for technicians.

3 Types of Work

  1. LOF (Lube, Oil, Filter): Requires minimal skill and carries a highly visible “market price.”
  2. Maintenance: Relatively unskilled with a visible market price, so your pricing has to stay competitive in your market.
  3. Repair: Requires advanced tools, technology, and technician skill. Labor, parts, shop supplies, and taxes all factor into the job price.

Types of Customers

Service advisors can adjust prices in a number of ways, and the type of customer affects pricing. Common customer types include retail customer pay, dealership employees, fleets, insurance companies for extended warranty, OEM warranty, and dealership internal. Keeping these in mind supports pricing compliance and consistency across services for each customer type.

 

Warranty Labor and Parts

With CP labor rates and pricing compliance dialed in, you can capture the benefit on warranty labor and parts. The rules governing 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. In a handful of states, the law requires reimbursement at a retail rate. Your CP labor rate determines your warranty labor rate for similar jobs, so the better you manage CP labor rate, the more you’re 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, the better you manage your CP parts markup, the more you could be entitled to on warranty parts.

 

automotive technicians

Building Partnerships with Training Institutions

One of the most effective ways to overcome the technician shortage is partnering with training institutions. Collaborating with schools, colleges, and specialized programs helps dealerships fill technician gaps while maintaining a steady talent pipeline.

These partnerships are a win-win. Students gain hands-on experience with the latest equipment, and dealerships access motivated new technicians ready to start their careers. Many technicians begin in these programs, building not just technical skills but work ethic, teamwork, and adaptability.

Making Training Accessible and Beneficial

Training costs and equipment access can be real barriers, so dealerships that provide resources, internships, and scholarships make technician careers more accessible. That investment builds a workforce ready to use advanced automotive software and diagnostic tools.

Supporting industry-relevant curricula also improves productivity, job satisfaction, and adaptability. When instructors and experienced techs design courses together around real-world challenges, graduates arrive prepared for modern vehicles, from cars to diesel trucks.

 

Securing the Future of the Automotive Workforce

Partnering with training institutions gives dealerships a steady supply of technicians who work hard, grow within the company, and contribute to the business. These partnerships also reduce recruiting and training costs, since students enter the workforce with a solid foundation and a clear career path. Ultimately, they strengthen the broader industry and turn technician work into a long-term career.

 

5 Steps to Build a Winning Team

Bring the work with your existing team full circle by recruiting, training, and retaining the right talent. There’s a lot to borrow from how a great sports team is built:

  1. Recruit the right personnel. People are the foundation of a winning team. Hire skilled technicians who can learn, work hard, and collaborate, including candidates with mechanical, diesel, or engineering backgrounds.
  2. Develop the right playbook. Your playbook is a written, step-by-step guide to the processes in your service department. Document them, and update them as staff and tools improve.
  3. Coach the playbook. A strong playbook is useless without a framework for teaching it. Use the “Wooden Method” of explanation, demonstration, imitation, and repetition to build habits.
  4. Understand the KPIs that lead to winning. Use data and analytics to drive decisions and optimize performance.
  5. Repeat. Practice consistently so the habits stick and the team keeps improving.

Together, these short- and long-term strategies tackle the ongoing technician shortage from every angle. By optimizing staff, improving labor rates, investing in training, and building partnerships, dealerships make the most of current resources while building a skilled, motivated workforce, and a better place to work, with competitive pay, high productivity, and a busy service drive.

Dynatron makes running your Fixed Operations easier and more profitable. Ready to find the opportunity hiding in your Fixed Ops? Book a 15-minute demo to get started.

Source: Ford’s Jim Farley raises concern on shortage of skilled service workers