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Wednesday, 10 April 2019 20:16

Are We Going To Let Insurance Companies ‘Total’ Our Industry?

Written by Joe Henry, ACT Auto Staffing

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Joe Henry, owner of ACT Auto Staffing and former body shop owner, sent us the below comments in response to Stacey Phillips’ “Solving the Tech Shortage” column, which invited additional input from the collision industry on the technician shortage. The column was published in the March 2019 edition of Autobody News

 

Lately, industry “experts” are justifiably focused on the crescendo of a 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, it is best to envision it through a split screen. One side is for why young people who 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 by 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-throttle 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 who makes $30,000 annually, and your person averages $14.42 an hour during a 40-hour workweek. Guess what? $14.42 X 40 hours X 52 weeks is $30,000 a year = ALICE ……



Let me add caffeine: Take that same employee without a working spouse. Now, they need to make $29 an hour to survive.

Gary Ledoux’s article, titled “Does the Collision Industry Have a Crisis of Opportunity?” published in the March 2019 edition of Autobody News, 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 binge-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 information stating that we would need a student loan of at least $30,000 to earn a professional degree from one of these fine higher-learning institutions. Also, we read we will have to purchase at least $20,000 worth of tools. All this to perhaps indulge in 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 step. We seek the know-all/see-all pal Google, where we search “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 $61,000. 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 and trucking companies to fill the open positions coming up from baby boomers retiring.



How much in 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 and the opportunity to make upwards of $80,000 within a few years.

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

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

a. Pay you more so you can afford to pay your invaluable craftsmen above ALICE
b. OR co-op with community colleges/tech schools to form an apprentice program with you
c. 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.

 

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