Are we going to let the Insurance Companies “Total” our industry?

Joe Henry

Lately, industry “experts” are justifiably focused on the crescendo of long overdue overhaul of attracting young people to collision recruitment and training programs. However, I have not seen as much a feverish discussion TO SAVE the precious Techs we have as well.

In my opinion, to understand what is happening today, use a split screen. One side is for why young people have less interest in our trade than a free trip to Chernobyl. The other side of the screen is occupied by the forces driving existing talented experts who can handle the massive tasks required of todays’ collision work, packing up their boxes on a truck and on to other ways of being liberated and making a living. 

I am going to go full throat here …. because I can. Unlike many of you, my business (helping over 800 collision centers across the country fill technician positions), does not hinge on the main culprit of this dilemma: Insurance Carriers.  

Let me start this discussion by introducing you to “ALICE”. No, she is not the owner of the restaurant in the Vietnam protest song. Nor is she my girlfriend or my wife’s girlfriend. ALICE describes most of your crew on the floor: Asset Limited Income Constrained Employed. This new human resource and labor force nomenclature represents the growing number of individuals and families who are working but are unable to afford the basic necessities of housing, food, child care, health care, and transportation. In the case of a family of four, this would mean earning less than $60,000 annually.

Let me distill it a little further. Let’s say your team member on the production floor has a spouse or partner that makes $30k annually. And your person averages $14.42 an hour during a 40-hour workweek. Guess what? $14.42 Xs 40 hours Xs 52 weeks is $30k a year = ALICE …… 

Let me add caffeine; take that same employee without a working spouse, now they need to make $29.00 an hour to survive.

Gary Ledoux’s article of March 2019 quoted many owners saying they were trying to attract newbies with $9 to $12 an hour. So, let’s pretend we are young again. 

We have binged watched the Velocity/Motor Trend channel where the image of stench and stigma of a craftsman is gone. (Thank you, Velocity/Motor Trend!) We then see the immaculate shops in the UTI and Lincoln Tech commercials. (More stigma removed!)

So, to further our curiosity, we read the trade school’s online info that we would need a student loan of $30k+ to participate in one of these fine, higher-learning institution’s professional degree. Also, we read we will have to purchase $20k+ of tools. All this to perhaps indulge into what we hope is a profession that gives us satisfaction as well as pays all the bills and student loans. 

That leads us to our next step. We seek the know-all/see-all pal Google, where we put in “average salary of collision repair technician”. 

Result? “Collision repair technicians make an average $41,570 per year, or $19.99 per hour”

That means a single earner WITH some good skills and experience – ALICE! Never mind tool expense and student loan debt. 

Hell, if I were young, I would apply to COSCO or Amazon or Disney or Apple or Ben & Jerry’s or Walmart, make at least $14 an hour TO START and continue to binge watch All Girls Garage.

Further distilling: If our goal is to escape ALICE, we need to make $61k. That equates to $29.50 an hour. The gap that your DPRs are paying today to support that gross is not a bridge too far, it is a canyon, far and wide!

Conclusion? It’s time to lean in on Insurance Companies. They must be made aware that keeping their foot on your throat, cuts the air off into your gross whereby you are fishing for new employees (and losing good ones) to other industries. Massive efforts nationwide are being taken by railroads, utility companies, oil companies, trucking companies to fill their open positions coming up from baby boomers retiring. 

How much student loans and tools do these candidates need to apply for these opportunities? Nada! As a matter of fact, most of the above employers offer: sign-on bonus, retirement plans, opportunity to make $80k+within a few years.

In the near future if nothing gets changed with the choke collar DPRs have, this will be “Dog bites Man”. 

I advise your communities to network up as groups. Devise a business plan to submit to insurance companies whereby they ratchet up their rates, whereby they either:

Pay you more so you can afford to pay your invaluable craftsman above ALICE , OR co-op with community colleges/tech schools to form an apprentice program with you

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  5. OR BOTH!      

Start talking to other owners of shops today! Otherwise, if we all lack the courage to administer such a solution, this will add up to a “crash-out” almost as dramatic as Brexit. Quality Body men and painters will be a thing of the past like Beta vs VHS. 

Suzanne  Laine

This is an interesting and well-written piece.

Joe Henry

Thanks Suzanne. It is a bitter reality pill that no one wants to chew and swallow ….

Mark Rask

very interesting 

 

Jim Kalogerakos

Very on point and timely.   Its a real problem.  I've been reading about dealerships that are trying to attract/retain techs with Snap-on Tool gift card perks, 4 day work-weeks, plus, plus... Asbury Automotive Group have recognized problem and are investing heavily building locker rooms with leather chairs, XBOX, large screen TVs, etc. in order to attract/retain service personnel.  Full article here: http://www.nxtbook.com/nxtbooks/crain/fixedops_201904/index.php?startid=F24#/24

Joe Henry

Thanks Jim. And as an veteran Fixed Ops guy who also had a body shop before going to work for a fine dealer, X-box and leather ain't going to do it. These younger people are much smarter than most dealers give them credit for. 

Until the industry can show a young person a legitimate career path, school to retirement, this is going to be a crash even Stevie Wonder can see! 

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