What Labor Shortage? - aftermarket
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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What Labor Shortage?

Written By Ron Slee

Article Date: 04-01-2005
Copyright(C) 2008 Associated Equipment Distributors. All Rights Reserved.

The availability of mechanics seems to be slowing us down.

I am starting to get annoyed with the constant lament that we can't find mechanics. When will you start taking some responsibility and attack this problem head on? Time is passing us by and it'sstarting to get serious. In most of the dealerships I visit and talk with, I hear a constant refrain: The market is larger than we can handle. We're turning work away daily because we don't have enough mechanics. Our backlog is too large. We can't get to the customer in a timely manner and they go elsewhere.Imagine letting a machine sale get away because you couldn't find a machine?

The first order of business is to deal with the truth of managing the labor inventory. The inventory of mechanics is the only inventory in the dealership where you can't have any underutilized inventory.

Too much unapplied time elicits a "get rid of someone" response. I don't hear that about machines that haven't sold in over a year, or parts that haven't met company stocking parameters. Yet have an extra hour of labor lying around and you'll be told you have too many people.

Service managers have learned how to deal with this situation. They would rather use overtime than have the right number of mechanics because each of the mechanics on the payroll is a person and service managers don't like to let people go. Who does?

You need to break this cycle or you'll continue to lose customers. Research for AED's Product Support Opportunities Handbook found customers saying that 44 percent of them had chosen someone other than the OEM dealer for repairs and maintenance during a five-year period. The customers said price, responsiveness, convenience and quality were the reasons for their selection of a source for labor other than the OEM dealer.

You'll notice the number of technicians in the dealership impacts two of those reasons. So,how about doing something?

  • Hire helpers to work with your journeymen.
  • Work with technical schools.
  • Send young starting mechanics to college.
  • Pay more.
  • Establish incentives based on performance.
  • Have regular testing for the mechanics.
  • Provide more than 40 hours of training to the mechanics you employ. 
  • Accept more unapplied time to sustain responsiveness. 
  • Reduce overtime and increase safety
  • Review your labor backlog daily.
Your service department: differentiates you from the competition, it generates a lot of parts business, and it has the highest gross profit of the sales, rentals, parts and service departments.And let's get more serious. Check out the ages of your best mechanics. What about your field staff? How many are over 50? How about your best mechanics: How many are over 50? It's not about age discrimination; this is a physical job. How about using some of these talented people as trainers in the department?

I believe each dealership should be hiring at least an additional 10 percent of their current staff each quarter. There is clearly enough business out there to absorb that additional capacity. You might need to get serious about product support sales at the same time. Do you have as many product support salespeople as equipment salespeople?

The picture will not change until you address the workforce issues. You need more mechanics, you need to pay them better, and you need to continuously train them - in short you need them much more than you realize.

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Article Categories:  Workforce  »  Product Support