Why The U.S. Has A Shortage Of Auto Mechanics

auto technicians are badly needed and in very short supply the service Staffing situation that one's really been very very challenging data from industry analysts JD Power indicate customers are waiting at least an extra day sometimes much more to get their cars serviced this is happening at a time when the average age of U.S Vehicles keeps hitting record highs buying another car is out of the question for many prices for new and used vehicles hover near record highs the shortage also spells challenges for dealers Kevin Massey owns a Ford dealership in Napa California and despite in-house training and competitive salaries he has been struggling to find service workers service Revenue has dropped because I don't have enough people to service the clients we have the demand but we don't have enough supply of service staff to be able to do it whether it be technicians or service advisor about half of a dealership's profits come from parts and service every dealership that I know of has similar challenges that we have there's just not enough technicians it is not just dealers Research indicates independent aftermarket repair shops around the country face the same scarcity the pandemic has exacerbated the problem but the shortage of technicians has been long term those in the business worry it is because of some kind of deep generational shift away from work in the trades we've been on several calls with you know whether it's manufacturers and dealers combined and it isn't that there's a ready solution immediately on the horizon right just because it's been ongoing for a while the automotive industry is undergoing some of its biggest changes in history for more than 100 years the vast majority of cars have run on gasoline now EVS are slowly but surely gaining ground servicing them requires a whole different set of skills it also brings with it a lot of uncertainty for dealers and for technicians and would-be technicians plotting out careers but there are also lots of opportunities The Cutting Edge cars of today are built ever more around computers and software if you like working with your hands you like working with computers and you like to make things that are broken be fixed this is the industry dealers automakers and others in the industry are trying to learn more about the shortage and how it can be solved foreign [Music] there has been a serious shortage of workers in an array of service positions during the pandemic the great resignation as everyone's calling it dealerships are experiencing that too customers are waiting longer for service appointments it typically takes customers around three and a half days to get a service appointment but this year in our annual customer service index study we were seeing that that increased by about a day so it's now close to five days to get a service appointment and depending on some brands of 20 percent of customers were taking over a week to get a service appointment leave dramatically slowed down not because of Desire want that we want that we want it to be quick we just can't do it we sometimes have the shortage of the staff we sometimes have the shortage of the part and and like every store we we're trying like man to get it done quickly we want you to have a good experience on top of the workers shortage the supply chain turmoil continues there's fewer loaner vehicles in stock part shortages on top of that but certainly personnel has been one of the factors in that that longer time to get a service appointment worker turnover is also pretty high the highest turnover rate is among service advisors they are the people who interact with customers schedule and sell service work and communicate what needs to be done to the technician we see that it's close to 50 turnover in a year at this point which is shockingly high that makes it really hard to build customer relationships if that's the case positions that we've had trouble with is service advisor it is one of the most challenging positions to fill because it requires an ability to listen to customers understand the workings of a vehicle and communicate with technicians you say the car is making this noise and they have to communicate to the technician cars making this noise at this time this is what it does this is what it sounds like this is what it feels like and be able to communicate that a technician who's going to work on your car and give you back your your vehicle repaired the first time so that you don't have to come back because that really creates dissatisfaction that number is astronomical for dissatisfaction when you don't fix it right the first time Massey also said he needs at least some staff who can speak and understand both Spanish and English but long before kovid there had been an ongoing technician shortage the national automobile dealer Association estimates the industry is short about 37 000 train techs each year that technician shortage has been ongoing and is fairly pervasive it is notoriously tough to recruit people into the job of technician it is also tough for employers to retain them of course the first thing that comes to mind for anyone thinking about this and for the text themselves when you ask them is money the overall compensation level is low given their skill and there's not a large range in pay or as much growth there the average pay for an auto mechanic in 2021 was 47 990 people in the bottom 10th percentile made twenty nine thousand ten dollars and people in the top 90th percentile earned seventy five thousand one hundred dollars but she can earn more a technician that's a high performer in this business can make eighty to a hundred thousand dollars and that's pretty darn good money one of the challenges with technicians is in a lot of cases are the Personnel is paid based on the work itself right it's a flat rate type work that's paid for based on the job allocated to it so at times may not be as stable if there's not as much work coming in Flat Rate work also incentivizes technicians to work quickly or efficiently but it might not account for the amount of time they spend doing other tasks such as diagnosing problems the job often comes without benefits or other perks as well we often find that tax when we survey them have very little common benefits that are offered um you know even like individual health insurance not all technicians are offered at that 401ks even fewer are offered especially someone who maybe is Young and then has a family if they're not getting what they need benefits wise at work after a few years they're probably going to look elsewhere but techs also don't seem to feel confident they can make a lifelong career out of their job there's a real lack of career progression or understanding what the career path is our industry traditionally didn't have career path we're trying to create a career path so it's more professional the day-to-day job of a tech can be exhausting in the culture of shops and dealerships can seem harsh texts you know tend to work pretty long hours and often have odd schedules you know if someone's got to work the late shift or on the weekend they may work six days straight and you know it's manual labor it can definitely be grueling and a lot of texts tell us when we survey them and interview them that they don't feel that they're appreciated that they don't feel that you know there's a real work-life balance or any sort of social component the auto technician trade may be suffering some of the same reputational challenges seen with other trades at the end of the day when we're looking at the younger set of people they're not going into the trades or what we would call a trade the big piece of this is that the career of a technician we've found has become less and less desirable over the years you know it used to be that many people would grow up you know working on cars with their Dads had interest in it it was a respected career field kids would be you know potentially geared towards that feel field in high school and maybe even earlier and now more and more we see that there's not that same Trend and that most high schools really push you know everyone should go to a four-year University and there's a much smaller pipeline of people coming into the technician field the schools also that provide that service and education they've really reduced so someone that says hey look I want to have auto shop class A lot of the schools don't have it anymore the technician pay is very good but there's no place for them to get trained so what are the solutions how do dealers or shops struggling to find or retain Talent turn things around you want to recruit uh younger folks today a lot of them are going to want a more stable and known Pace structure one idea to handle the pay problem is to provide some kind of minimum guaranteed pay for new technicians who may not get many jobs at first or maybe spending a lot of their time on the diagnostic work or on their training knowing that they're going to make at least X is something that can be very important for them in those first few years if they aren't able to make what they need to make to you know pay back their education costs and pay for their tooling that they need to become a technician it's really hard for them to keep going in the career Massey has instituted pay and retention bonuses for technicians that helps to a point there's always someone that can pay more than we can pay but can they provide you the environment we can and that's where we want to win and so I worked very hard to make sure our work environment is better than anybody else's we provide benefits the f401 K we have medical so yes we have all of those things we want you to be healthy we want you to have fun and we want you to be able to make a good living He also recruits we as Ford dealers go out and go to the schools and try to attract those youngsters and say hey come to work for us we provide a great environment for some rules he casts a wide net we also as a store look at it a little different I look for people in other trades or other Industries you could be a waiter you could be anything if I know that you have work ethic and will come to work then I want to talk to you he takes seriously the need to provide a career path we're trying to create a career path so it's more professional you can map out your career path you can map out what your pay plan is going to be moving forward he has an in-house training program we have what's called Quick Lane to get you which is basically maintenance and light repair here to get you started there and get you trained and we'll get you trained up to move from Quick Lane into used cars from used cars into your specialty within Ford or Lincoln large dealership groups or service chains may have the size and scale to develop their own Recruitment and training resources independent shop owners like Massey may not have the resources to take on recruiting or retention challenges as much as they would like we would like to see you know ways for the OES to help even small dealers who don't maybe have the same resources as those large dealer groups be able to take some of those ideas and some of those practices and implement it on a smaller scale so that this problem can be addressed overall and not just for those larger dealer groups Ford recognizes that if we don't have technicians we can't service the vehicles therefore the brand image and the brand expectation drops they've done things they provided scholarships they're doing things within the school to attract more into the trades these severe shortages have turned staff recruiting into a seller's market candidates for jobs are able to aggressively negotiate pay in benefits in the case of service advisors they can hop from one job to a better paying some of the seniors are coming out on a signing bonus like they're a NFL player we're seeing that but industry insiders say now is an exceptionally interesting time to be in auto service with increasing electrification of vehicles too there's so much more going on in this space than there used to be for a long time Vehicles didn't change much right now with the rise of EVs and hybrids there's a lot more going on and a lot more things that technicians can do and learn and be trained on and it's really a whole different career now that does bring uncertainty with it one of the frequently touted benefits of EVS is that they don't require as much maintenance as internal combustion Vehicles there are no oil changes for example with an internal combustion engine you got greasy and there was a lot of oil and a lot of grease and that's what made an internal combustion engine go well we're seeing that dramatically decrease with the Bev so the amount of oil and things was gone because you don't have any oil in the car so we we're seeing that change the dealers are certainly having to account for the fact that their service departments are probably going to look different I don't know about five years from now but 10 years from now let's say 30 percent of vehicles sold or EVS they'll require less work or different types of work reshaping the perception of the auto technician could be as simple as highlighting the tremendous technological changes underway an auto mechanic really is an auto technician that is an auto computer person that's the way this industry is going foreign [Music]

Channel: CNBC

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Id: -GGVfrc6eNQ

Length: 13min 21sec (801 seconds)

Published: Sat Jul 09 2022