Mobile Toggle

Posts Tagged ‘HD Repair Forum’

Road to Green: HD Vehicle Technology Will Change Labor Measurement

Posted by

The progression of heavy duty vehicle technology will make a dramatic difference in measuring a typical HD service shop business. The HD aftermarket will have to relearn this portion of the business all over again. You will find that a typical HD shop owner is going to require 6 to 8 days of management training per year moving forward. This labor measurement is one of the changes that will have to be relearned as the old way of setting and measuring labor rates will leave too much money on the table.

As commodity margins decline and HD vehicle software grows, everyone must understand where their management attention must be directed.

A redefined labor measurement will take place within the next year to maximum 2 year period.

A “maintenance labor” category will be just that, pure maintenance work based on the manufacturers recommended service intervals and repairs of worn out or broken parts.

Diagnostic labor will be the analyzation of a situation or interpretation of information. (What is the problem, what caused it and what is the solution?)

Inspection labor will be all completed paid inspections.

Re-Flash will be strictly updating the vehicle from the OEM website.

Calibration labor will be a new category as the lining up of sensors after a repair has taken place will become an additional specialty skill within the HD shop. Software platforms will have to be understood.

The key information that will need to be understood is “what will the mix of each labor category be within the shop?” This brings back the importance of key efficiency measurement for each category as specific training will have to be required and making sure the shop has the right skill set within the team to ensure professional execution of the services on behalf of the HD client. The efficiency measurement of each category will also help establish the billed hours per R/O.

Measuring the “effective” rate will be critical in the labor mix measurement. How much labor should we be getting from each labor category to justify the staffing level?

All that being said another big change coming to the industry will be the setting of labor rates for each category. Labor rate multiples will change from what they are now based around the technicians hourly wage to working with the individual shops actual cost per billed hour.

Better “job quoting” skills will have to be embraced because the knowledge for “how” a job must be done and “what kind of labor” is involved to complete the job to total client satisfaction must be learned.

As you can see, personnel development and business measurement will become more intertwined than ever before. All of these things combined will affect the net profit of the business.

Our heavy duty industry is changing so rapidly and dramatically and the reason for this is due to vehicle technology and technician competency that will be required to fix and maintain a vehicle properly.

I see this as just the beginning of so many changes coming to the heavy duty aftermarket sector within the next 1 to 2 years maximum. What will happen to the HD shops that don’t have a learning culture in their business or won’t want to re-learn and move in the direction they must? Time will not be on their side. It is this kind of change that will dramatically separate the heavy duty shops in a given marketplace.

As the business owner you want to be committed to keep “ahead of the wave” and seek out the business knowledge you will need to keep the business moving forward. Hold on for the ride over the next 2 years, it will be a great one for the heavy duty shops that get it.

Bob Greenwood

Road to Green: Do You Have a Problem with Too Much Staff Turnover?

Posted by

Everyone acknowledges the shortage of competent technicians, and staff in general, in this heavy duty industry, but it becomes really scary when a HD service shop can’t keep the staff it does find. When a shop can’t keep good people, it not only affects the shop’s general attitude, it affects the profitability too.

Constant personnel “replacement” is not personnel “management”.

Too much personnel replacement is not good for business. It creates a situation where too much time by the shop owner is used in a perceived negative process, rather than spending time working on the positive processes of the business that builds a client base, and profitability. If the business is not moving forward, then the fact is, it is stagnant, or moving backwards.

Consider the following:

  • In many cases, it is not the staff that is the problem; it is “shop management” that is the problem.
  • If an employee would leave a shop for a $4 or $6 per hour raise, then the employee does not “see” a future with the current shop that would allow him/her to earn in excess of the amount offered, to enjoy a career. The employee sees the current situation as a job. The owner does not seem to believe in, or have the skill to, create positive employee business relationships.
  • Due to a shortage of competent people, it must be recognized that dealing with staff members today must change substantially compared to the 1990’s mentality.
  • It must be recognized that you can buy a man’s time; you can buy his physical presence at a given place; you can even buy a measured number of his skilled muscular motions per hour. But, you cannot buy enthusiasm today; you cannot buy initiative today; you cannot buy loyalty today; you cannot buy devotion to the business today. You must EARN these.
  • Heavy duty shop employers today must learn to be supportive, and willing to take responsibility, of its employee’s long-term “well-being”. The employer, in essence, is stating, “You are not easily replaced, therefore, I am interested in you, and your future, and how working with, and being part of this company can meet, or exceed, your personal goals. Let’s talk.”
  • In the past, you would hear people saying “wouldn’t it be great to work for company X or company Y?” You don’t hear that anymore because in an age known for “slash and burn”, “downsizing”, and “lean and mean management”, which has created a psychological atmosphere within the marketplace, where the prevailing perception among employees is that there are not too many companies out there that VALUE their people.
  • As much effort must be made to nurturing your employees as you do servicing your heavy duty clients. This is a role management must be willing to “get their head around”, because if it doesn’t, what are the long-term financial consequences to the business?
  • An employee-centered management philosophy makes sound business sense. Any corporation, in our industry, that wants to succeed today, has to care passionately about its business and compassionately about its people because businesses that fail to understand, and act on this, will probably fail.
  • The only sustainable competitive advantage in business today is its people. The competition can copy your technology and latest feature, but they can’t copy the skills, knowledge, judgement, and creativity of your committed workforce. People ARE the edge today.
  • There is a new “social contract” being made today where companies are asking employees to change, to be innovative, and creative. Employees, in return, are then stating, “well in that case let me try and do it, rather than watching over my shoulder trying to clone me like you, because I am not you. Yes, I will make mistakes, because no one, including you, is perfect, but I will learn through my mistakes and become a much better employee, and person, for it. When you display, and support, confidence in me, in the long run, I will not let you down. Also, for my concerted effort and dedication to the task requested, it is only fair that I am properly compensated.”

All these are key points, and there is no doubt there are heavy duty service shops who will either agree with them, or argue it is still the employees fault anyway because “they just don’t want to work.” At this point, with statements like that, one must make an assessment as to whether this shop owner is willing to change the way he/she thinks. People are willing to work when they have something positive to be motivated about that creates the desire to work. A good starting point for management is to have a respect for the employee as an individual, and a respect for the skills that they have worked so hard to achieve. The next hint is to display pride in your “team”, and each member, openly in front of the client. If you arer not proud of your team and each member in your shop, it doesn’t say much for management’s ability; after all, who hired them, who trained them, and who pays them?

Today everyone must be willing to understand that personnel management is not a “one time meeting”, but rather a nurturing process that requires on-going discussion and understanding of points of view from both sides over a longer period of time. The over-all benefits to the business, and its bottom line, are enormous. This is truly the expression of “entrepreneurship” where the

management of the shop is leading the business, and the “employees” have a strong desire to follow.

As this sample problem has shown, if the owner is not prepared to change, then one must accept that the shop will not grow, and will actually experience serious financial difficulties, if not already there. Entrepreneurs must devote their time to the progression of their business, because they realize that their shop will be one of the few that will be here in five years, coupled with a “team” standing alongside with them. Everyone has each other’s back !!!

Take the time to learn about your employees. Express, and show, your concern for their future, and I believe you will be amazed at the positive response you will get from the better technicians/staff in the marketplace.

Taking the steps to strengthen your relationship with your employees is good business sense. Strengthen it by having open discussions about the industry, the business, and every individual’s role within the business. It does take time. It does take several meetings. It does take commitment, but the long-term rewards are great. The choice is yours.

Effective personnel management takes creative thinking. Consider that anyone who has ever taken a shower has had an idea. However, it’s only the person who gets out of the shower, dries off, and does something about it that succeeds.

If you’d like help, I’m here; it’s my specialty. Reach out and e-mail me: greenwood@aaec.ca

Bob Greenwood