From the Desk of Mike Anderson: Use Tech to Kick ‘Timesuckers’ Out of Your Collision Repair Shop
Written by Mike Anderson, Autobody News
Published June 29, 2021
I was writing an email to one of my collision repair clients recently, and used Google to try to find a different term for “waste of time.”
One of the results that popped up was “timesucker,” defined as “an activity to which one devotes a lot of time that might be better or more productively spent doing other things.” Spending time on something that doesn’t create value for you.
There’s actually a noun for that. Timesucker. Who'da thunk?
That got me thinking about some of the things in the collision repair industry that are timesuckers, taking up a lot of time for auto body shops.
I was emailing the client because I’d been looking at some changes I’ve found in what the average collision repair business is spending on “SGA wages.” SGA stands for sales and general administration. Those are all the folks in your business who aren’t actually working on cars.
Their wages are sometimes referred to as “non-productive employees,” not because they aren’t doing important work, but to separate it from the wages of technicians and those actually producing repairs.
I knew from working with my 20 groups and private clients that several years ago, an average collision repair facility’s SGA wages were hovering around 10% of total gross sales, on average. From what I’m seeing now, that average has increased to between 13% and 14%.
For example, a shop with $3 million in annual sales had been spending $300,000 in administrative wages, not including benefits; today, that number is closer to $390,000. That is a huge increase.
I will admit the sample size I’m using to extract this data isn’t large. But regardless of the actual numbers, it’s no secret administrative costs in the collision repair industry have risen.
You’re probably as aware of the reasons for that as I am. Some of it could be because insurance companies have shifted more and more of their administrative tasks over to shops, both DRP and non-DRP. Another reason: It requires more administrative time just to research OEM repair procedures. And there are more administrative tasks involved in delivering an exceptional customer service experience. And increases in labor rates generally haven’t kept up, so SGA wages continue to rise as a percentage of gross sales.
So what should a shop owner do? Try to reduce SGA staff? It’s very difficult to try to get employees to do more with less. It just leads to stress and burnout for everybody.
So what you really need to figure out is where the timesuckers are in your shop. What are things that require time that could be better spent on things that add more value? What is your team doing manually now that could be automated, that could be made easier using technology?
A good place to start---I challenge the auto body shops I work with to take a new look at their management system. According to our “Who Pays for What?” surveys, more than 90% of shops are using a management system. But when was the last time you contacted the supplier of your management system and said, “Can I get some update training on this? Can you help me discover how to automate more of the things we do?”
For example: Maybe you’re still calling customers to remind them of their appointment the next day. Could your system automatically send those customers a text message reminder about it rather than your staff having to call?
Maybe you’re calling potential customers who don’t schedule a repair right after an estimate. Is there a way to automate a text or email follow-up instead?
When I work with a collision repair business on SGA wages, I like to start with a big easel pad or white board and ask them to write down everything they do manually so we can start figuring out if there on things on that list their management system will do for them. Ask your system provider: Are there ways I can use your software to do this task? That’s being proactive instead of reactive.
Think about your parts processes, for example. Does your management system automatically show you the status of all parts, or do you have to chase this down?
If you have a designated parts person, there’s a chance he or she is spending up to half of their administrative time inputting parts invoices into the system. Does the system allow you to import a parts invoice from a vendor so you don’t have to enter it yourself? Bingo, you just knocked off 15 to 20 timesucker hours a week.
How about rental car updates? Are you doing this manually, or can your management system update the Enterprise Entegral system automatically, for example?
It all comes down to working smarter, not harder. In almost every collision repair business, there are timesuckers that could be eliminated using technology.