These are excerpts from the third report given on December 6, 2000 by the Human Resources Committee to
the full body of over 400 attendees at the Collision Industry Conference (CIC).
- The looming issue for the collision industry is not aftermarket parts, nor labor rate, nor
consolidation... it is human resources.
- The collision industry's number one challenge, as agreed upon by the members of this committee
is the overwhelming and increasing shortage of human resources.
What are we going to do about the tremendous shortage of technicians? How are we going to solve
the technician problem?
Shops have become either paralyzed or protective. On Human Resources in general, most shops have
little hope, few answers, and no idea what to do to about the shortage of technical help.
This committee's research among members, organizations, and publications in this industry allows
some thoughtful estimates:
- 90% of shops accept or participate in "Raiding" employees from other shops...employee theft
used to mean an employee taking supplies, today it means taking employees from somewhere else.
- 95% of shops advertise in local newspapers, but are not happy with the result
- 80% of shops complain that the vocational trade schools are not effective in meeting demand
- BUT only 5% or less of all shops participate effectively with trade schools
- 20% or less of vocational school students trained in auto body
actually enter the collision industry
- 100% of shops hire non-industry people - generally in the detail department and the office
- 99+% of shops have no specific plan to take an out of industry person, such as a detailer, to a
- Less than 1/4 of 1 percent of shops use a formal in-house
technician or Apprenticeship training program.
The CIC Human Resource committee was created in January of 2000 to review and report on 4 very specific issues which are:
- Recruiting employees;
- Retaining employees;
- Human resources best practices;
Point 1: Recruiting Employees
95% of shops view recruiting as:
- "A" or "B" tech related
- Determining how to leverage employed, experienced techs from elsewhere and;
- Necessary only when a position is vacated or expansion occurs
An emerging HR difference is that progressive shops are viewing
things differently. They are developing professional HR departments and are recruiting continuously.
Other recruiting issues:
- Less than 2% of shops have good recruiting methods
- Less than ½ of 1% of shops recruit continuously
The most common recruiting practices consist of:
- Calling a vendor (typically the paint supplier)
- Asking technicians if they know someone
- Running a newspaper advertisement
- Phoning vocational schools
Related to vocational schools, shops who go out of their way to work effectively with trade schools
get first shot at recruits. Imagine the response by the Vo-Tech instructor to the shop owner who never
having been in the trade school calls up and says, "Who is your best student?"
Non-Participating shops are NOT rewarded by vocational instructors with student referrals. Only 20%
of the students transition to the industry and instructors are very careful who they recommend their
Schools used to be considered the only "feeder" mechanism to the collision industry.
If schools cannot recruit, train and transition quickly enough from where will help come?
A quote from a person who came from outside the industry, but who currently works for a company with
several shops was read:
"The incestuousness of the collision industry is amazing. The insurance guys hire from the body
guys, the body guys know steal employees from each other and the insurance companies, and the paint
companies hire trainers from the body shops... all in all it's musical chairs. It's incestuous.
No one seems to be adding anything new to the HR shortage. It's like everybody expects a miracle.
They expect someone else to magically build employees, but the sad fact is no one is."
Some opportunities exist for employees, but the industry doesn't know how to seize them. Human resource
magazines report non-industry employees are open to work in the automotive field. Many people working in entry
level jobs such as counter jobs...fast food, theaters, video rental, basic lawn care and others, are open to
skilled trades. They are worried about finding a better, higher paying SECURE job-But they do not know how to
get into the automotive workplace, they have no host, and they lack basic tools which previously had to be
The technical nature of Frame, Body, and Paint makes it a SECURE high paying job. Compensation is not an
issue for a mid to high-end competent worker and is favorably compared to non-automotive technical trades.
For those that enjoy being around automobiles, but do not want to work on vehicles, appraising is also a
secure high paying job in shops.
Benefits have been a problem in recruiting employees at all levels. However, happily, the benefit gaps
between smaller automotive businesses and bigger companies are decreasing. More shops are becoming benefit
competitive. Where benefits are lacking applicants continue to search until benefit needs are met and if
they are not rapidly met in shops they continue the search outside the collision industry.
Management practices, productivity issues, pressure for cycle time improvements, currently pressure and
channel the shop managers efforts into recruitment of "A" techs through employee theft. "A" techs are sought
out rather than building new employees internally.
Perform or leave. Managers now are measure on time and space use. A techs make best use of space, but
supply is low, demand is high and pressures build.
This issue of cycle time and productivity impedes creation of new employees within the industry. It adds
fuel to the increasing appetite for the dwindling number of A techs and also fuels increasing pricing wars
for the most productive employees. Every time a technician leaves the industry we are not filling the lost
position. We decrease the supply of A techs and increase demand. Cycle time pressures and performance
demands increase the battle for A techs. A resulting issue may be increasing labor rate issues.
Point 2. Retaining Employees
They dynamics of supply and demand for A techs and the musical chairs approach is creating a new and unusual
approach by some employees who are the top challenge to retention. They place job stability and personal growth
secondary to windfall signing bonuses, and negotiated higher wages.
An example of this are the comments of one West Coast technician who bragged that they could gain an
extra $10,000 a year in signing bonuses... all provided up front. The tech did this simply by changing
employers three times in one year. The windfall was created by "bonusing", but then the technician added
that by changing shops they learned to negotiate for higher pay AND didn't have to do any comebacks as an
Human Resource specialists know that how people are introduced...their first day and then the first three
days have a direct impact on how long people stay with a company.
It is the equivalent to a "first impression". H.R. directors call it orientation. When people are
introduced well (as Apprentices/students) they tend to stay in the industry. Initial professionalism
leads to immediate good feelings and trust. Then if the employee continues to be treated well with training,
growth opportunity, benefits and the feeling of being needed they stay. Orientation is a key to retention.
Unfortunately the industry does not implement or orientate new recruits well. The orientation process is
poor. A good start in a shop tends to build a new employee who stays with the shop they grew up in. Retention
begins the day of orientation and then depends totally on the individual, care, feeding, protection and
opportunity of the shop.
Market demand for technicians is decreasing the retention stability.
Employees tend to stay where there are three key elements:
- Work - Does the shop have work enough to keep the technician busy?
- Good Management - Is the shop managed professionally?
- Equipment - Is the shop equipped to allow the technician to be productive?
Wild pay methods, bonuses and incentives related to pay are not the highest drivers for most of the
better technicians, but they are tempting. It is increasingly hard to retain when several phone recruitment
phone calls are received each week at home AND at work.
An interesting element of thinking that seems to be making its way around the United States, is that
technicians are developing a sense and aggravation that their personal livelihood is "negotiated" on every
job. The recounting of allocated hours and battle on every ticket reduces costs at their personal expense.
Obviously, we live in an industry with three party's issues defined on 90% on most of the dollar volume
going through shops. There is a fourth party who has a vested interest that we often forget about...the
technical employee. Pressures for cost reduction impact this contingency too. The sides are driving
production and cost, but technicians are taking it personally and feel they they are the squeeze point. If
this feeling increases it will be harder for shops to attracted new people to the industry.
Point 3. Human Resources Best Practices
People want to have a good place to go to with:
- Meaningful work
- Good compensation.
Best practices integrate with previously covered issues in Recruitment and Retention. Assuming that a
shop has a constant flow of work and the person perceives that they are fairly treated and that what they
do is meaningful.
Best Human Resource Practices include the following 12 points:
- Working closely with area vocational schools
- Reference checks on all employees
- Competitive pay for the area
- Professional orientation upon arrival
- Clear policy manual and job descriptions
- Competitive benefit package
- The shop has tools to do the job effectively
- Genuine emphasis on safety in the work place
- Genuine emphasis on environmental practices
- Good management
- In-house training/Ongoing training
- Apprenticing in-house
Using these twelve points on an ongoing basis, a shop can have a better chance at recruiting, retaining,
and increasing technician competency and stability.
Point 4. Training and Apprenticeships
Human Resource methods used today in the auto collision industry and the auto mechanical repair industry
are not well. As a matter of fact they are in a downward and accelerating spiral. Overall, even the best
in the industry do not perform well in any of the four elements this committee has reviewed.
That is the essential boil down of the committee. Things are not well.
In the last two years, I have personally restudied the best practices for
Mentoring and in-house Apprenticing in the automotive industry. I went to the market place and found little there. I have
personally developed a model, tried it ...and just like it has for thousands of years;
Mentoring and Apprenticing...done right... works.
At the highest levels of the top collision repair shops in America, the best and brightest understand
and are saying this:
"We have to figure out how to attract and train our own".
Progressive shops are now using all the above mentioned recruiting techniques, PLUS they are aggressively
introducing Apprenticing into their own shops.