While numerous industries have felt the pressure of labor shortages, perhaps one of the hardest hit has been the automotive industry. In fact, a study by TechForce Foundation found that by 2024 the U.S. will be short automotive, diesel, and collision technicians by 642,000 jobs.
In addition to the shortage, dealerships and their Service Managers often don’t have the tools or time to enhance the capacity of their current technicians, factor in future capacity, or understand how that can affect revenue and profitability. When the number of technicians in a service drive is low to begin with, optimizing the staff you do have is critical.
In our latest blog, we will be taking a look at the causes of the technician shortage and discussing what you can do about it with key industry insights from our experts.
Why is there a Technician Shortage?
What’s caused the shortage? COVID-19 is the one obvious answer that comes to mind, but there are other factors that have contributed to the current circumstances. These factors include retiring baby boomers, the lack of overall awareness of career opportunities, and the shift toward EV and more highly computerized vehicles.
Reason 1: Retiring Baby Boomers
According to Forbes magazine, the automotive industry will see a 4% drop in the number of technicians through the end of the decade (until 2029). During the same time period, retiring Baby Boomers will result in 100,000 job openings.
Reason 2: Lack of Career Opportunity Awareness
Becoming an automotive technician is a skilled trade, something that historically isn’t promoted as a viable career path in schools. In turn, this has caused a stigma around trade work. The reality is that the career presents a great opportunity for growth, especially as the industry changes.
Reason 3: Industry Transitions
Vehicle complexity is everchanging and with that, technician’s skillsets need to evolve too. There are computers, batteries, and mechanics that didn’t exist 10 years ago that require the knowledge to make repairs and perform maintenance.
What can my service department do to combat the technician shortage?
As a dealership, there are a few sustainable solutions you can utilize to offset some of the pressure you may be feeling from the technician shortage. This will require not only establishing a framework to attract and maintain new talent, but also maximizing the staff you already have.
Attract and Maintain Talent
Showcasing your dealership as a great place to work by establishing a great company culture focused on caring for its employees is the easiest way to attract new talent. Offering competitive pay and good benefits will also help with retention in the long run.
In recent discussions with a few major manufacturers, we’ve found that they too are seeing that dealerships with higher profitability are retaining their technicians at a higher rate because they are able to increase pay, allocate work appropriately, and ultimately keep their staff happy.
Maximize Existing Staff
Making the most out of the technicians you have while also planning for the future is easier said than done. In fact, technician capacity is the largest constraint on revenue achievement, because it is impossible to plan to have more customers, more hours, and more parts sales without the staff to support it.
The best place to start is by implementing a plan to provide sufficient capacity to support your service department’s revenue goals throughout the year. This plan should include things like work-mix changing, new and leaving technicians, pay rate changes, parts sales, and more.
Increasing overall ELR is another area that can result in better pay for your technicians, which in turns helps with both retention and attracting new talent. The best way to maximize ELR is to align pricing compliance, flat rate times paid to technicians, and discount allocations.
Now that you have a better understanding of what is happening with the technician shortage and what exactly you can do about it, it’s up to you to make the necessary changes. As always, Dynatron Software is here to help support your service department goals when it comes to technician capacity management and strategic planning.