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Joe Henry

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6 more reasons why we MUST move Techs to $40 to $50 an hour soon

If you have followed my published articles in the past about retaining Techs (based on being a former dealership Fixed Ops Manager and my 17 years of recruiting with over 3,000 dealer clients) you know I advocate that decent Techs today are as skilled as college educated Engineers.

When I preach that dealers must start raising their door rates to support $40 to $50 an hour flat-rate in order to keep Techs in the game, I have been called “A Visionary” to “A Wacko”, and everything in between. So go ahead and think anything you want, I am immune to criticism.

My point here is: As if you don’t already have enough assaults daily on your Tech’s mental health, here are a few more cyber attack-like events that have happened just in the past 30 days

1 Rebels without a cause – Unemployment just went down to 4.6% (U.S. Labor Department). This essentially means that no one who wants to work is unemployed. People who are collecting unemployment under these conditions have no cause to apply to your jobs. Trying to recruit from this area is as dry as this year’s California deserts.

2 Tokin’ Resistance – Medical and Recreational Marijuana referendums were more popular than any candidate on the ballot. 25 states now allow either medical or recreational. A great job with good pay better be worth a Tech to “Just Say No” to this temptation.  

3 Those Fracking Oil companies – OPEC decided to recently slow production and crude is now ascending like a homesick Angel. Already, domestic oil companies are gearing back up looking to swallow up Techs to put in their oil fields.

4 Train Gang – Recently I read an H.R. report that the railroads are on a nationwide search offering after only two years on the job: 100k + SALARY (no roller-coaster pay weeks depending on hours turned), Union style job security, plentiful benefits and a retirement plan. 

5 Outbreak of Trumpian Optimism - The new administration proposes (at last count) at least $275 BILLION in infrastructure programs. EACH billion will create around 13,000 jobs mostly for non-college educated males.

6 “What do you mean I can’t play games on my phone at work?” - A recent study by University of Chicago’s Erik Hurst and colleagues stated that nearly one-fifth of males between 21 and 30 who have not completed college aren’t working today and aren’t in school (an increase of 125% since 2000). Yet many of these young men are satisfied with their situation because it frees up time to play video games.

Bottom line, it is insane not to retain! The information above is NOT from fake news sources so I highly recommend you do more M.B.W.A. (Management By Walking Around) and really talk to your Techs. Let them know YOUR dealership appreciates them and is looking to have them into the $40 to $50 an hour range.

Jason Unrau

Hey Joe, great post.

I'm sure dealer principals and fixed ops managers choked just a little at your tech pay rate suggestion. It made my eyebrows go up for a moment too, but you're bang on. Techs, especially fully-trained and certified techs, are in short supply. If you can't keep them, you're up the proverbial creek. 

In the dealerships I've been a part of, I can count no less than a dozen techs poached by the railroad alone in less than 10 years. There are employers throwing around huge wads of cash to good people, so if you don't treat them right and pay them well, they're gone. 


Joe Henry

Jason, my dealers that have been with us for years understand, and are following our advise. However when dealers who hear this message that don't know us, and go to 20 Groups and share this information, the other dealers laugh them out of the room.

Sometimes 20 Groups are a poison pill.

In the near future, GM dealers will be the biggest believers! I just read an article that the average age of a GM Tech is 50. What do you think happens when Techs turn 62 choose “A”- can start Social Security. Or “B” - oh I enjoy being beat up by warranty times, can't do P.M. because some hot blond reporter of our local station perceived our dealership for selling fluid changes on fluids for life, losing my service advisor because of his DUI who could sell, I love sitting from 8:00 am until 8:45am for my first ticket and car, and can’t tell you how many times I walk into the parts department behind 5 other Techs”

99% of Techs can’t wait for age 62 … if their bodies or health last that long.

John Brennan

This article is very interesting.It suggest a 40% GPM on parts which is directly relayed to the customer and not over keystone pricing standards.It also suggests a GPM on labor of 70% minimum.Shop labor rates are a set fixed rate and do not vary or are they relayed to the customer.An example,a shop rate is $160 and a tech is paid $20 the margin is 700% over cost and 82.5% GPM.How is this not wage fixing and an absolutely absurd cost mark up to the customer?I was taught first day of automotive school about these pricing standards and started at age 19 for 50% of the shop rate.I have a list of skilled trades from 30 cities and none are marked up over 100% of cost and the median is in the 40-60% above cost.A pet groomer will get 50% or more.I don't see the trade as viable any longer and it is certainly not worth the investments for someone new to come in.Warranty times are sometimes 25% of customer pay time and completely at their discretion after the work is performed rather than being stated clearly and agreed to before.It has completely gone into another realm and violates my being!

John Brennan
John Brennan

They substitute "lower level"or lower pay techs with master tech signage posted everywhere but offer the customer no discount for them.They have doubled shop rates since and this article was written in June of 2008 in the middle of the Great Recession and 10% unemployment speaking of technician shortfalls and cutting their pay in half again.Omg!

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