Monro working to attract, keep qualified techs

ROCHESTER, N.Y. — In their drive to make Monro Inc. a more viable destination for customers needing auto service, management at the Rochester-based company is focused on attracting and retaining top-notch auto technicians and leveraging its online scheduling tools.

During the past two quarters, Monro has hired 450 "high-quality" auto techs while cutting the rate of employee turnover among techs, Monro Chairman Mike Broderick told financial analysts Jan. 26 during the firm's fiscal 2022 third-quarter conference call.

In discussing Monro's outlook for the coming quarters, Broderick stressed that adding technician headcount during the "historically tight labor market demonstrates that we are progressing towards our goal of becoming the employer of choice in the auto service aftermarket industry."

Having a growing pool of qualified auto techs "will position us to take disproportionate gains in the future as our business will be better equipped to capitalize on customer demand from multiyear tailwinds, such as an improvement in vehicle miles traveled, and consumers that are holding onto their cars longer," he said.

At the same time, Monro is working diligently to leverage its online appointment scheduling tool "to manage and control variability in labor costs so that we can match capacity with demand and allocate resources appropriately between front-of-shop and back-of-shop activities."

Broderick said the investments being made in labor, particularly in the firm's lower volume stores, "represents both an important organizational pivot and essential cultural change" at Monro — strategic decisions that represents a critical component of Monro's success.

Many stores are understaffed with some technicians working upwards of 70 hours per week with little to no time off, he said.

This leads to unwanted turnover of experienced technicians, which in turn leads to stores that are further understaffed and a customer experience that is "inconsistent and far from desirable," he added. From a bottom-line perspective, this results in lower sales and as a key contributor to inconsistent operating performance.

Making investments in labor is aimed at addressing and resolving these issues and ensuring a more sustainable business model longer term, he said.

That, in turn, allows Monro to create additional value for its shareholders through enhanced earnings-per-share, significant cash generation and higher returns on invested capital, he added.

Broderick emphasized that Monro's focus on staffing and scheduling resulted in a 24% sequential reduction in overtime hours in the third quarter. This reduction, along with the firm's pricing power, allowed Monro to "significantly offset" wage pressures.

To help retain qualified techs, Monro is expanding training opportunities through its online learning management system, Monro University, along with conducting instructor-led sessions held virtually and hands-on developments done in-store.

Training "has been embedded in every aspect of our other initiatives," Broderick said, ensuring Mnoro will have the right skill set to deliver a "best-in-class" service model.

Monro, the nation's No. 1 retail tire dealership based on number of stores, reported 74% higher per-tax operating income in the quarter and nine-months ended Dec. 25 on 20%-plus higher sales, setting the company up for "outsized sales growth" based on "robust demand and multi-year industry tailwinds."