There is a significant shortage of technicians across the US, and according to one source, the shortfall may grow to 642,000 individuals by 20241. This could put considerable strain on new and used car dealerships, particularly as the industry struggles to get younger people interested in this type of career.
There are many reasons for this lack of interest, and understanding how it came about in the first place can help you identify potential solutions. What can dealerships do right now and as they plan for the future?
What Is Causing the Technician Shortage?
Poor Career Perception
Young people may not believe this type of career is attractive, often due to age-old perceptions. Some think the workshop is a dirty place where they have to perform awkward tasks under challenging conditions. They may not realize that today's vehicle is far superior in technological terms to some of its predecessors, which means a modern-day technician needs various IT-related skills. The industry and the education system may have failed to paint an attractive picture for potential students.
Unbalanced Education System
The education system tends to encourage students to go for four-year university courses, suggesting it can provide access to more opportunities. This may be why 71% of college students attend four-year programs versus only 29% who attend a typical two-year technician program2—even though a four-year degree can cost $127,000 while a 2-year trade school may cost $33,000.
Student Dropouts
Where individuals opt for postsecondary technical education, they may not always stay the course. One statistic shows that the number of people completing such a course has fallen 34% since 2012. In addition, the reduction between 2020 and 2021 was the largest single drop in one recorded year, at 11.8%5.
Inadequate Salaries
Potential employees may not consider a technician career lucrative, adding to the mechanics shortage. The average mechanic salary across the United States is just over $25 per hour, and 59% of those surveyed believed their salaries are insufficient for the cost of living in their area3. Employers may not offer a clear career development program or understand the goals and values of each individual employee.
Aging Out
Then there’s the “aging out” process. Many baby boomers are now retiring, and one survey shows that the average retirement age in 2022 was 614. The boomer generation was more familiar with hands-on or blue-collar work, and younger generations may not be as interested in joining the auto repair sector, contributing to the shortfall.
What Does This Shortage Mean for Dealerships?
Dealerships face a growing problem. According to NADA, 76,000 mechanic positions become available each year, but only 39,000 workers are coming out of training programs or technical colleges6.
Used car dealerships may face even larger issues due to the technician shortage for a variety of reasons. Older vehicles may require more extensive or frequent maintenance and repairs than new cars, which means the dealership will often have to employ a larger team of skilled technicians. The business will typically sell a range of makes, models, and years, each with its own mechanical complexities. Due to this diversity, the company will need technicians with a broad knowledge base and skill set, which can make it far more difficult to find qualified personnel.
The problem can worsen due to the current high demand for vehicles, which may cause a faster stock turnover. This will require more vehicle inspections in a shorter amount of time, as well as the need for potential repairs. Further, some new-car dealerships have direct support from their related OEMs, which may give them more resources and training possibilities for their technicians.
For example, BMW operates a program at its national training center that offers free tuition. About 90% of the instruction covers electronic systems to keep pace with modern trends7.
Tips for Attracting New Technicians
Since automotive technician recruitment is complex in this market, dealerships need to fully understand the nature of the problem and take active steps to correct it.
Give Adequate Compensation
It’s important to understand the essential nature of these workers and ensure they get adequate compensation for their efforts. Note the survey where 59% believed their compensation was insufficient to cover the cost of living. Make sure you offer competitive wages for your area and consider benefits. These could include health insurance, paid vacation holidays, or even a gym membership.
Reach Out Through Current Employees
Talk to your current technicians and see if they know others who might fit your organization well. If possible, offer them a recruitment bonus if they go to bat for your dealership and find qualified new hires.
Over-Deliver to Help Spread the Word
Go all out to become a good employer for those already on the payroll. As you keep your current employees happy by over-delivering, they’ll spread the word in the general community.
Look for Specific Skills
You may also need to look at experience specific to your shop and the types of vehicles you service. Focus on finding those workers in the marketplace with these particular skills rather than relying on the education system alone to fuel the pipeline.
Run a Training Program
Finally, provide an ongoing training program, which could be particularly attractive to new hires. In-house training will help those employees keep up with technological changes and be happier once they join the team.
How to Retain Auto Technicians
Remember that it is far cheaper to keep a current staff member than to rehire and retrain new ones, so you should also focus on automotive technician retention. One report suggests that the average company can lose between 1% and 2.5% of their total revenue as they get a new employee up to speed8.
When you look at your compensation and benefits packages for new hires, ensure that you also extend these benefits to all your current techs. Continue to invest in their development by paying for ongoing education and running an internal training program.
Take the time to sit down with each technician periodically and chat about their long-term career goals. Are they happy with their current position and potential? Try to develop a plan to help them get closer to their goal.
Some dealerships will offer an employee loyalty program to reward these individuals for their dedication and hard work. For example, you could give a worker an additional incentive or gift on their employment anniversary.
Remember, employee engagement is critical. After all, a nationwide survey suggests that a disengaged employee will be 18% less productive, with 37% higher absenteeism, eating into your bottom line9.
Dealing With the Technician Shortage
In many respects, the auto technician shortage represents a perfect storm of problems, some of which may be outside an individual dealership’s control. However, most dealer principals can make additional efforts to recruit and retain good mechanics by providing a good compensation package and a path to career development.
And once you've implemented a plan to tackle the technician shortage, turn your attention to vehicle acquisition. Work with the experts at ACV Auctions, the leading online car auction for dealers. We'll help you source vehicles nationwide, so you never miss out on the inventory you need. Register with ACV today to get started.
Sources:
1. TechForce Releases 2020 Technician Supply and Demand Report. Retrieved on 7 September 2023 from: https://techforce.org/techforce-releases-2020-technician-supply-demand-report/
2. The Technician Shortage – Why It Exists and What Needs to Change. Retrieved on 7 September 2023 from: https://wrenchway.com/blog/technician-shortage-why-it-exists-what-needs-to-change/
3. Automotive Technicians Salaries and Common Benefits. Retrieved on 7 September 2023 from: https://www.indeed.com/career/automotive-technician/salaries#common-benefits
4. More in US Retiring or Planning to Retire Later. Retrieved on 7 September 2023 from: https://news.gallup.com/poll/394943/retiring-planning-retire-later.aspx
5. Technicians Supply and Demand. Retrieved on 7 September 2023 from: https://2763245.fs1.hubspotusercontent-na1.net/hubfs/2763245/TF-TechSupplyandDemand_Final-Web.pdf
6. Auto Shops Struggling to Find Train Mechanics amid National Shortage: “It’s Getting Really Scary.” Retrieved on 7 September 2023 from: https://www.foxbusiness.com/features/auto-shops-struggling-find-trained-mechanics-amid-national-shortage-really-getting-scary
7. Shortage of Auto Technicians Has Dealerships Taking Action. Retrieved on 7 September 2023 from: https://techforce.org/shortage-auto-technicians-dealerships/
8. How to Retain Technicians in Your Shop. Retrieved on 7 September 2023 from: https://wrenchway.com/blog/how-to-retain-technicians/
9. How Much Are You Disengaged Employees Costing You? Retrieved on the 7 September 2023 from: https://www.forbes.com/sites/karlynborysenko/2019/05/02/how-much-are-your-disengaged-employees-costing-you/
