Shop coaches: Attract techs with culture, benefits

LAS VEGAS — Shops can attract quality technicians by raising their labor rates so they can afford higher wages, better benefits, new equipment and updated facilities, according to industry experts.

"We're looking at guys coming in now and saying 'I want to be paid $60 per hour' and, frankly, they should be paid $60 per hour but most shops can't afford that," Cecil Bullard, CEO of The Institute for Automotive Business Excellence, said. "They can't make that work because our prices aren't high enough. As an industry, we needed to go up 30% five years ago."

Bullard was one of four "shop coaches" who offered advice during two Shop Coach sessions at the AAPEX 2021 in Las Vegas. Shop coaches advise repair shop owners on how to better run their businesses and attract technicians.

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The shop coaches claimed that a shop can raise its labor rate by $5 or $10 per hour and most customers wouldn't notice or complain.

"The top-performing shops have no problem charging what they're worth because they value themselves," Vic Tarasik, managing partner of Shop Owner Coach, said.

A lot of owners are resistant to raising prices, he said, yet shops need to make a profit in order to pay for their staff, update equipment and make improvements to the business.

"Sometimes we think if I'm making a profit, then that's a dishonest thing or it's not a good thing," Bullard said. "But if you're taking care of your customers and your cars and taking good care of your employees and their families, then you are doing an honorable thing."

The shop coaches said technicians usually desire being part of a team and being part of an organization where they can grow and thrive; wages are often further down the list. But they encouraged shops to offer good benefits packages in order to compete with other employers.

"If you say you can't afford that, then you're not charging your customers enough, because they're the ones that need to pay for it. It shouldn't come out of your pocket. It's the cost of doing business and that expense needs to be passed on to your customers," Greg Bunch, CEO of Transformers Institute, said.

In addition to competitive wages, a generous benefit package and team spirit, employers should offer a clean, well-lit shop, updated equipment and ongoing training.

One of the problems businesses have is waiting until they need someone to begin the hiring process.

"You should be marketing year-round for your staff," Maylan Newton, CEO of Educational Seminars Institute, said. "You should run an ad for all the positions and be interviewing on a daily basis. My philosophy is: recruit year round and when the right person walks through your door, you find your weakest link (to be replaced)."

Bunch agreed, noting every shop has a weakest link on their staff that they would like to replace; when the owner finds a great technician, they should hire them and figure out later where to put them.

"That's part of the problem. We're too slow to react," he said.

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With low unemployment and plenty of help-wanted ads in the market, technicians have choices for their next employer.

"Employees are going to stay because of the culture, not because of the money. They can go find a job anywhere. Focusing on the culture of your company is super important," Bunch said.

"Be willing to ask the tough questions of your employees: What do you like? What do you not like? If I brought someone in as a potential candidate, what would you tell them? Why should they come to work here?"

The shop coaches advised owners to find out why their good employees stay with them "and keep working on that."

"People quit people, they don't quit jobs," Newton said. "So you have to have that environment where they want to be there and there's room for advancement. You make the culture, that's the buzzword today, to where they don't want to go anywhere else. It can be as simple as 'please' and 'thank you, I appreciate you.'"

"If they go to a competitor, you need to look in the mirror. You need to have an exit interview, if you possibly can, and find out why they're leaving," Bunch said.

Bunch suggested that shops budget 3-4% of their sales for training in combination with recruiting.

"It's definitely a cost of doing business that people don't figure into things."

If a shop raised its hourly rate by just $1 per hour, which nobody is going to notice, Newton said, those accumulated dollars could go towards training, or half to training and half to recruitment.

He added that consumers pay close to $100 per hour for a plumber or an attorney because they are paying for their expertise. "We need to sell our expertise," he said.

The shop coaches said shops need to invest in training, even if they are afraid the employee will leave after the training.

"You're going to have to invest in people or they're going to leave. And my feeling about that is the cost of not training them, even if they leave, is greater than the cost of training them," Newton said. "The missed opportunities, the lack of productivity, the mistakes that are made — comebacks are ghastly expensive when you track them properly."

Bunch said he advises against contractually obligating a technician to stay with a business for so many years after receiving training. He said that scenario can create resentment and poor attitude in their work.

Newton said some shop owners don't want to train their future competitors when a technician gets training and then leaves to open his/her own shop.

"I'd rather train the competition so they come out as a good shop owner than have someone who doesn't understand about how to charge for and do it properly," Newton said.

The shop coaches estimated that most shop owners don't take advantage of a shop coach or other consulting opportunities to improve their businesses.

Bullard estimated that about 20% of the industry participates in hiring a coach or take training classes and seminars.

"Our industry is behind the times. We're back in the Stone Age in a way. … We've tried free stuff, we've tried cheap stuff, we've tried expensive stuff. ... And'we're still not reaching that 80% that are so resistant.

"In my opinion they're holding back the whole industry in a way. It's going to take the whole 20% to get to the 80% or it's going to take some dramatic financial or economical situation, like they're going to lose the ability to work on cars because they don't know enough or they can't afford the new Tesla information or whatever," Bullard said.

"I think we're going to lose a large portion of the industry right now, soon. And then the ones who are left, hopefully, will be the ones to see the light and are more adaptive to what's going on."

Some of that 80% are making just enough money to pay the bills but not enough to improve their life or send their kids to a good college, the shop coaches said.

To reach a goal takes time and several steps, they said.

The shop coaches said when they counsel a business, they suggest making small, incremental adjustments to procedures and processes so as not to shock employees or customers.

"The worst thing a shop owner can do is change a whole bunch of stuff at once," Tarasik said. "What does it do? It disrupts the flow within the shop. And what happens is people begin to become uncomfortable and when your team starts to get uncomfortable with you, they're not going to follow you like they would if they saw little, incremental changes."

In addition to hiring shop coaches, the speakers suggested owners take opportunities to attend training and seminars and join "20 groups," where a group of experienced shop owners meet and share ideas and advice.

The shop coaches also encouraged owners to analyze and fix the shop's systems, processes and job flow before hiring another person to boost productivity.

If a shop is only getting 60% productivity out of the three technicians it has, the shop owner should look at ways to improve the flow and speed of the estimating process, answering phones, scheduling, etc. to get those employees to a 90% productivity rate.

"All that extra guy does is create more cost and more flow problems. Make sure flow runs more efficiently and quickly as possible so employees can be successful," Bullard said.

"In our industry I think that's our biggest mistake, thinking that hiring that extra person will take care of the flow in my shop when it's really all of these process issues that need to be fixed."

Improving the profit of a shop is an important component for planning for the owner's retirement, even if that is years away.

An unprofitable business will be sold for less than it's worth.

"We need to look at our businesses as a means of security, and we don't," Bullard said, noting that owners have to prepare for the unexpected, such as an emergency or sudden death or illness. Everybody needs a succession plan.

"You're going to sell your business, one way or another. Either it's going to go out of business because you can't continue, you're going to pass away or you're going to sell it the right way," Tarasik added.

The auto service industry has not been doing an effective job of attracting students to careers in vehicle repair.

The coaches encouraged shop owners to volunteer at their local junior high and high schools and vocational education centers; talk about careers in the industry; and bring students into their businesses to learn about the art of car repair.

"We need more females in our industry," Newton added. "Guys, I hate to say this, they're better technicians than we are because they are more detail-oriented and they think differently than we do. So we need to open our doors up and get these young people and females into our industry."

Bunch noted that one of barriers for entry into the auto repair industry is the investment in tools. Some shops will provide access to a toolbox as part of an apprenticeship and after a few years, the technician gets to keep the toolbox.

Bunch also encouraged shops to pair a entry-level tech with a young technician for training. Older veterans, because of their skill set, tend to gloss over the basics that are important to teach a new employee, he said.