Technicians are the Key to Dealerships’ Future

Service departments account for and absorb most of a dealership’s losses in sales and fixed expenses. That is not going away anytime soon. With new car front-end grosses declining, most dealerships will increasingly rely on service business to, well, stay in business.

 

The problem isn’t a lack of service business, but a shortage of qualified technicians to perform it. Also, according to a recent article in Automotive News, the race to acquire technicians may just be outweighed by the race to retain the ones dealerships already have.

 

With warranty and recall repairs on the rise, the sheer volume of service business has skyrocketed. However, according to that same Automotive News article, many technicians (especially those paid on a flat-rate pay plan) are dissatisfied and do not expect to remain in this career for more than a few years. In fact, in a recent survey of more than 35,000 service technicians, 52 percent stated that they wouldn’t recommend their career to anyone else, which is an increase from last year.

 

Other than the flat-rate pay plan, one of the critical points of contention is the divide between dealer management and technicians. Dealer leadership tends to want incentive-based pay plans which, ultimately, lead to staff paying their own salaries. From a business perspective, this is understandable. However, these type of pay plans can be dangerous as, by making a technician work faster to get paid more, work can be of lower quality.

 

Furthermore, in addition to the regular service department workload, millions of recalls need to be fixed. There are still a little under 17 million vehicles that have not had their defective Takata airbags replaced. And, as reported in the State of Recalls Report for 2018, recalls aren't going away anytime soon. Last year recalls increased over 2017 levels, which was a record year. The sad facts are that those same technicians who feel overworked and underpaid are staring at a long line of recalled vehicles in the service drive.

 

With more than 50 percent of technicians surveyed reporting that they do not like their jobs and do not plan to stay at them longer than a few years, the future of recall repairs and compliance is at risk. I understand that dealership profitability is vital. However, I can guarantee you that, if those experienced technicians leave while new, inexperienced technicians (supposedly) take their place, dealerships will find that the decade of lucrative service revenue will swiftly dwindle, leaving millions of vehicle owners at risk.

 

Perhaps it's time to reevaluate compensation plans for technicians to not only shore up the staff dealers already have but to attract future technicians that dealerships will need to ensure profitability.

 

 

 

 

 

 

Views: 12

Comment

You need to be a member of DealerELITE.net to add comments!

Join DealerELITE.net

Latest Activity

Simon Hopes posted a blog post

Top Five Tips for auto Intranet Setup

Setting up an intranet can be a daunting process for any business. After all, no matter how…See More
2 hours ago
Terrel Watkins posted a blog post
16 hours ago
Joel posted a blog post

Why are Fridays Good?

For some, this is Good Friday. For others, it is TGI Friday (I don't mean the restaurant).What's…See More
yesterday
Sally Whitesell posted a blog post
yesterday
Dave Anderson posted a blog post

Leading with Level One Accountability

There are four levels of accountability in any organization, and within the departments of that…See More
Friday
Scot Eisenfelder posted a blog post
Friday
Jim Flint posted a blog post
Friday
Cynthia Madison posted a blog post

Important considerations before buying your first car

Pollution became a matter of great importance in the past few years, considering the impact it has…See More
Friday
Bill Wittenmyer posted a video

Freebie Friday: How to Combat Flat Vehicle Sales

Bill Wittenmyer explains why dealerships shouldn't be afraid of slowing vehicles sales and the actions they can take to remedy that in this episode of Freebi...
Friday
Andy Church posted a video

Profit By Action Quick Tip: Prospecting

Sales people are not order takers. It is your responsibility to understand that your sales process starts with PROSPECTING, not the meet and greet. This Prof...
Friday
Yogesh Sashi posted blog posts
Friday
Jeff Cowan posted a blog post

Write Service Podcast: Episode 64- Holidays, Events, and Excuses

This week, Jeff covers three points about this maximizing this upcoming season of holidays and…See More
Thursday
Jeff Giere posted blog posts
Thursday
Brett Sutherlin posted a video
Thursday
Stella Lemon posted a blog post

Bike Information with Bike Owner Details

Check bike information and registration details with Owner Details, RTO, Insurance, Make model,…See More
Thursday
John Sternal posted a blog post

Swapalease.com Announces Its Top Vehicles for The Summer

Users Voted on What They Believe are the Top Vehicles for the Summer Months Based on…See More
Wednesday
Damian Boudreaux posted a blog post
Wednesday
Michia Rohrssen posted a blog post
Wednesday
Timmy D. James posted a blog post
Wednesday
Erik S. Nachbahr posted a video

Protect Your Dealership from Phishing

In this video blog, Erik Nachbahr shares why it is important to protect your dealership from phishing attacks.
Wednesday

Get Newsletter

© 2019   Created by DealerELITE.   Powered by

Badges  |  Report an Issue  |  Terms of Service