As the wave of second quarter reports ring out from various automotive retailers, several commonalities have emerged. Sales are up. Profits are up. Conditions are ideal, and many are poised for further expansion. However, there was one key limiting factor that has come up in at least two of the groups’ conference calls: finding well-qualified technicians. According to Michael Kearney, Asbury Automotive Group’s executive vice president and chief operating officer, finding skilled labor can be the hardest part of expansion.
“In terms of roadblocks, obviously the biggest single roadblock, if you have all the facilities in place, would be the number of technicians,” Kearney said. “That’s the true throttle valve — how much work you can actually put through a shop.”
The days of simple engine servicing are long gone — aside from jobs like oil changes and topping off fluid levels, you can’t just pull anyone off the street, hand them a mechanic’s manual for a specific model and expect them to navigate the complexities of today’s engineering feats.
Kearny, whose company saw a 9-percent year-over-year increase in technician hiring, said finding skilled labor is “something you have to proactively go out and pursue.”
“The short answer is there is a substantial amount of skill level with the technicians that work on these cars today,” Kearney said. “As you know, they’re very sophisticated; they’re quite complicated.”
Even the country’s largest automotive retailer is having trouble finding the talent they need to fix today’s issues. Mike Jackson, AutoNation’s chairman and chief executive officer, said during his group's call that it has proven difficult to hire qualified technicians.
“Yes, it’s an issue,” Jackson said. “It’s a great-paying job. If you take the top 20 percent, average pay is above $75,000; the top 10 percent is six figures. These are very well-paying jobs for skilled individuals, but we are competing with other industries for this technical skill.
“There’s a real demand in multiple industries for individuals with technical skills that we’re willing to pay very well for, but it’s not like when we say we need to hire more technicians we’ve got a line standing at the door with applications and we just bring them in. That’s a critical path for us on growing the customer care business.”
Mike Maroone, AutoNation’s director, president and chief operating officer, says his company has been focusing on the search for skilled labor from the very start.
“This is not just a Q2 initiative,” Maroone said. “We’ve been ramping our technician population up, and we have a goal of 400. We’re over halfway through that goal, but we also have expanded our quick service capabilities tremendously. Those techs aren’t quite as efficient as your shop techs. We continue to push the envelope, and we think there’s more opportunity there so that’s a key initiative in the company.”
AutoNation, who, according to Jackson, has a utilization rate in the high 90s in regard to their technicians, was not expecting the service load that they have received this year due to the unusually high number of recalls.
“If we had more technical capability we would be growing faster right now,” Jackson said. “It was not folded into the plan a record year of who knows what the final number will be, 40-45 million recalls or whatever it is. So, in that sense, it gives you an indicator that how on the margin we are here and just that surge in demand we are at this point substituting recall work for normal customer care work. Because we don’t have the technicians.”
While the demand for skilled labor increases, Asbury has implemented a program to bring lesser-trained individuals in-house to teach them the skills they are looking for in a technician.
“We have a very aggressive program internally for hiring and maintaining and now training our own techs,” Kearney said. “It’s a brand new program. We’ve just started it, but we feel very comfortable about that. We want to make sure that when that growth is presented to us that we, who are very opportunistic, can take advantage of it and we don’t want some outside influence be a hurdle for us.
“We started a program in one of our markets, taking a facility and bringing in young men and women and training them at a certain level. We have a little, small facility that we put together and we’re working on training them. We have control of those individuals," he concluded.