Where Will Your New Technicians Come From? - Workforce Needs
Construction Equipment Distribution magazine is published by the Associated Equipment Distributors, a nonprofit trade association founded in 1919, whose membership is primarily comprised of the leading equipment dealerships and rental companies in the U.S. and Canada. AED membership also includes equipment manufacturers and industry-service firms. CED magazine has been published continuously since 1920. Associated Equipment Distributors
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SECTION: Workforce Needs

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Where Will Your New Technicians Come From?

Written by Steve Johnson and Pam Gruebnau

Article Date: 10-01-2005
Copyright (C) 2005 Associated Equipment Distributors. All Rights Reserved.

If the shortage of qualified technicians isn't impacting your business now, it's just a matter of time.

These days, the shortage of qualified - or even entry-level - technicians that looms over the industry is the subject of much concern. Where are your new technicians going to come from next year, and the year beyond, as dealers, manufacturers and other employee-strapped industries continue to recruit from construction equipment distribution's labor pool.

While the need is great, and only going to get greater, those involved in industry recruiting have to overcome negative image issues, not only among students, but also among those who influence the career decisions of students. And, in an environment of cost-cutting, funding reductions and cost-benefit analysis, technical schools are facing declining enrollment.

Service Sales To Grow

In the spring of 2005, The AED Foundation surveyed AED member dealers and found they are expecting service sales to continue to increase. While 86 percent of dealers reported an increase in service sales in 2004, in 2005, 95 percent are forecasting an increase in service sales, and 60 percent are expecting that increase to be 6 percent or more.

For 2006, 97 percent of dealers are predicting growth in service sales and 47 percent say increases will be 6 percent or more. Not one dealer responding to the survey is expecting a decrease in service sales in 2005 or 2006.

Forecasting Shortages

So where will the technicians to do that added work come from? Dealers responding to the survey employ 7,451 technicians. Projected across the approximately 900 independent authorized full-service construction equipment dealers in the United States and Canada, the current technician population in the equipment distribution industry is approximately 42,173.

Dealers responding to the survey currently have 734 technician openings - an average of 7.3 per dealer. Again, projecting that information across the 900 independent authorized full-service construction equipment dealers, there are 4,481 unfilled technician openings in the industry today, a projection consistent with other sources of information documenting the shortage of industry technicians.

In 2005, dealers are reporting an increase in technician openings of 34 percent compared to 2004.

According to the survey, more than one-third of the technicians dealers are hiring are from other dealers. This represents a tremendous amount of "churn" in the technician labor force. The next three sources are "other industries" at 20 percent, "non-college technical schools" at 16 percent, and "other sources." These other sources are typically contractors.

Dealers are using a variety of methods to recruit technicians. The most popular are print advertising (81 percent), Internet advertising (61 percent), referrals (60 percent), and working with non-college technical schools (55 percent) or transitioning military (40 percent).

Labor Rate Comparisons

In 2005, the average retail rate in North America for shop labor is $75.19 - up 7.3 percent from 2004's average of $70.05; however, the maximum reported shop rate is up 17 percent - from $94 in 2004 to $110 in 2005. The average rate for an hour of field labor in North America is $81.43.

The Northeast Region has the highest average shop labor rate ($82.16) and the highest average field labor rate in the United States ($87.25). The maximum shop rate is $100; the maximum field rate is $118.

The Midwest Region has the second highest average rate for both shop labor ($78.52) and field labor ($84.91). The maximum shop rate is $90; maximum field rate is $95.

Dealers in the Western Region are getting $76.03 for shop labor and $82.76 for field labor. Their maximum rates are the same as in the Midwest Region.

In the Southeast Region, $71.85 is the average rate for shop labor and $76.85 is the average for field labor. Maximums are $90 and $95, respectively.

The South Central Region charges the least for shop labor ($66.90) and the least for field labor ($73.90), 15 percent less than in the Northeast Region. They also have the greatest variance between shop and field rates; field rates are 10.5 percent higher than shop rates.

For a copy of The AED Foundation's Workforce Needs Report, contact Steve Johnson at 630-574-0650 ext. 344 or email sjohnson@aednet.org.

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