“At the start of COVID last year we had four candidates with contracts signed, and a number of others with offers on the table who were in the process of relocating here and the border closed on them. We haven’t seen any overseas technicians since,” said Matt Twiselton, MD of Musterrecruit.
Technicians, as any Service Manager or Dealer Principal knows, are hard to find in normal times. They are becoming much harder to find right now. Pay rates are reflecting their market scarcity. There’s a price war going on, and there is no end in sight.
Picture Credit:
Photo by Markus Spiske on Unsplash
“Pay rates are going up so quickly, we are updating our remuneration estimates web page less frequently to avoid adding inflationary pressure”, says Automotive Employment founder and MD, Russell Phillips.
The last overseas technicians arrived in New Zealand in March 2020. South Africa, Sri Lanka, the Philippines, the Middle East and to a lesser extent the UK were all sources of good quality motivated candidates who wanted to move to New Zealand for a safer, more prosperous life for themselves and their families. That tap has been turned off for a long time now, and it could well be 6 – 12 months before candidates from high risk COVID countries are available to travel to New Zealand.
Like many things COVID related, there are lessons to be learned here. A well run dealership should be looking to develop and nurture its own pool of techs, and many already do. But soaring pay rates clearly illustrate that demand for technicians is still outstripping supply; substantially. This suggests for many it might be time to re-examine their recruitment efforts.
Which brings us to the question, 'Where do technicians come from'?
The only routes open to dealers is to poach them or coach them. Poaching is inevitable. It meets a short term business need, but it isn’t a plan. It drives up costs for the entire business. Yet having a vacancy can be hugely expensive for a dealership. Just one tech is worth $20,000 in labour sales per month. Clearly dealers need to meet the market. For those that do, there are plenty good techs out there.
Long standing, well regarded technicians aren’t going to sit by and watch the new recruits get paid the same rate. So all of your technicians need to be better paid, otherwise you’ll cause unrest, and then your best techs will leave.
Not everyone jumps ship for more money; it is usually the straw that breaks the camel’s back. Developing good internal programmes to recognise and reward long service, continuous L&D, and a robust two way performance review process is also key. But if your senior technicians feel unfairly treated and then undervalued…well you can see the implications.
If you can’t grab a great technician from overseas, and the local ‘supply’ are demanding high rates then the only option is to make them yourself. Right now is an amazing time to do some home growing of technician talent. MITO has a number of apprenticeship programmes where there are no course fees. The government will even pay you up to $1000 a month (plus GST) for certain technician courses, in a programme called Apprenticeship Boost (but hurry, it expires in August 2022). This takes time to organise and time to get an apprentice up to speed.
The supply chain for technicians really has two components. One is acquisition (let’s call that talent acquisition), the other is retention (let’s call that coaching, developing and rewarding). You need both to work in harmony. In fact, you need more than this, you need a Technician Plan. You need a substantive plan to manage staff retention, staff development, apprenticeships, recruitment and development (and costs).
How many apprentices should you have working for you? It’s not enough to have 1 apprentice in 4 or 5 staff, the goal should be twice that. To get to that higher ratio in an already tight market, a dealer needs to be determined, and set these clear goals as part of their plan.
Most of us have heard the phrase, ‘I tried apprentice techs, but they just leave for more money’. At Boost Auto we don’t buy that. If your dealership keeps losing apprentices to competitors, then the money is only part of the issue. Do you value your trainees properly? If there is a pattern, then there is a reason. It’s time to dig deep, think of the long term consequences of your business, and to consider where you might be in 5 years time if you are a growing business.
Here are the Boost Auto top 13 tips for developing your Technician Plan.
Develop a plan for that covers tech recruitment, development and retention.
Better still, develop an aftersales (or back of house) staff development plan
Have a clear goal of your fully qualified technicians to apprentice numbers (Phillips suggests that even at 1:3, supply would still be too tight). Better aim for 1:2.5 then, and work out how to achieve your ratio.
Work closely with local colleges, other educational institutions to encourage young people to enter the apprenticeship scheme.
Remember your groomers, parts advisors, and service reception staff; they are a source of techs.
Consider the potential career path for techs, and promote the opportunity. There are plenty of DPs in New Zealand who worked their way through the ranks from the tools.
Regularly review charge out rates (and encourage distributors to do the same), as a result of cost pressures, to retain margin.
Manage staff satisfaction robustly.
Manage staff churn, and look for benchmark data
Think about what kind of place you would like to work in. What else can you offer besides. What will enhance staff satisfaction.
Make sure your plan has a five year view and an annual peer review date, because that’s the gestation period of a fully developed tech.
Extrapolate your R/O or job card numbers for the next 2-5 years, especially if you have been appointed for one of the emerging or growing brands.
Don’t be afraid of working actively with recruiters to fix short term needs. It’s much more expensive to have a vacancy for front line productive staff than to pay for fees.
Let us not forget, that as new and used vehicle volume grow to record levels, there are record levels of service work to be done. On top of that there is a wave of new skills needed. Your team can’t start working on high voltage vehicles without additional training, tools and equipment. You knew that; but technicians with qualifications and experience on NEV (New Energy Vehicles) are going to be incredibly hard to find.
At least now you have a framework for your plan, and you know where technicians come from.
If you want help creating a development plan please reach out to us. We have published a related blog on why we think sales-staff should be remunerated differently.
Boost Auto is an automotive consultancy working in six main areas.
Sales and Marketing effectiveness for brands and dealers
Green fleet facilitation for large corporates
Go To Market strategies for emerging brands
Market Insights & Trends
Business Planning and facilitation
Operational Effectiveness
Boost Auto would like to acknowledge and thank Russell Phillips from Automotive Employment and Matt Twiselton of Musterrecruit for their input in this article.
Picture Credit:
Photo by Markus Spiske on Unsplash