Nine Ways to Become More Tech-Friendly - Product Support
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Nine Ways to Become More Tech-Friendly

Edited excertps from the final report of research conducted by David Pier, Access GE Leader, GE Capital Corporation - America(s), for The AED Foundation

Article Date: 02-01-2009
Copyright(C) 2009 Associated Equipment Distributors. All Rights Reserved.

Research indicates that innovation and communication are needed to improve your service department as well as the long-term recruitment and retention of technicians.

North American heavy equipment dealerships currently need to fill about 2,400 vacant technician jobs, according to 2008 research performed by the AED Foundation. And while this figure is lower than the Foundation’s previous Workforce Needs Study data (4,200 in 2007; 4,900 in 2006; and 4,500 in 2005) due in part to the economic recession, the long-term shortage of highly trained and qualified heavy equipment technicians calls for continued vigilance in the industry to identify effective methods for repopulating dealer service departments with skilled technicians.

New research suggests that dealers vary in their approaches to engage, attract, develop and retain qualified technicians, which could result in a misalignment between technician supply and demand at the local level. As product margins continue to compress, the value generated by the service department becomes more critical to the success of the dealership.

In October of 2007, David Pier with GE Capital’s Access GE program contacted The AED Foundation to offer resources that would help identify and address industry problems. Access GE is a unique program GE offers its customers to help them learn how to solve problems by adapting various tools, process improvement methodologies and best practices GE uses to manage and grow its own business.

The result was a research project that would narrow down issues that may have an impact on attracting, developing and retaining qualified technicians in the heavy equipment industry.

Pier’s role in the research was to gather quantitative and qualitative data through interviews, surveys and general observations. The research was conducted in the capacity of a third party observer and not as an interested party or expert in the heavy equipment industry. Pier conducted his research on site from five separate dealerships, each located in a different state, representing and servicing various brands and models of equipment. Interviews were conducted with the dealer principal, service manager and three to five technicians at each dealership. In total, five dealer principals, 10 service managers and 17 service technicians were interviewed for this research.

The findings presented in this article are based on the data collected and observations made by Pier, an employee of the General Electric Company, but do not necessarily reflect GE’s position or views on the topic of this research.

This focus-group-style research was designed to capture the voices of the technicians, service manager and dealer principal regarding the challenges associated with the shortage of qualified technicians. It is intended to provide directional high-level causes and recommended actions to the industry regarding the technician shortage. It is not intended to be a statistically representative analysis of AED’s member base or a ‘one-size-fits-all’ approach.

Summary of Observations
There is no silver bullet or single action that will address the issue of the shortage of qualified technicians in the heavy equipment industry. Following is a summary of David Pier’s third-party observations along with some recommendations for consideration. The recommendations are mainly ideas to address issues and not intended to be the only actions or an exhaustive list of ideas.

1. The image of a career as a heavy equipment technician. According to the interviewed technicians the image of this career is not very positive and could be a barrier to entry for potential technician candidates. The perceived image is a job of hard and dirty work turning wrenches for a living.

Recommendation: Improve the industry and career image. Efforts to enhance the image should focus on the following:

  • Retaining talent within the community
  • Competitive wages compared to other industries
  • Technology advancements in HE equipment and skills needed to service the equipment
  • Advancement opportunities beyond the mechanical nature of the technician role – not a dead-end career
  • Convey message that this is a field with good employability into the foreseeable future providing for a secure and safe future
The AED Foundation already has communications on many of these points and can sharpen the message to target community leaders and influencers.

2. The influencers have power. Technicians identified groups of people who influenced their decision to become a technician and who could, in their opinion, impact future potential technician’s decisions. Influencers included family and friends who exposed them to heavy equipment at a young age and may have introduced them to heavy equipment employers. Local heavy equipment employers visiting schools made a positive impression. Schools without vocational programs that have teachers and counselors who steer students to computer-based skills instead of vocational skills were also identified as potential influencers by the technicians.

Family influencers, who want a better life for their children, may also steer children into careers with a focus other than heavy equipment.

Recommendation: Consider local efforts to target influencers in the community. Build relationships with high schools, technical schools and colleges that service the community and consider supporting and/or sponsoring local technical training programs. Leverage the product and employer name brand within the community and schools, and work to build a strong reputation for a positive dealership work environment to attract new talent and defend against competitive attempts at recruiting your existing talent.

3. Proactive vs. reactive recruiting approach. The proactive dealership creates a pipeline and hires talent that enables the service department to meet its expected performance goals. A reactive approach delegates all hiring of technicians to service management and may fill open positions with talent that is available in the job market at the time. In certain dealerships this may be the right approach if the equipment is smaller and requires less training time. However, dealerships with heavier and more sophisticated equipment may require technicians with formal technical training to be able to service equipment.

Recommendation: Explore the differences between proactive and reactive recruiting approaches and understand what it means to your dealerships and strategy for recruiting the talent you need to achieve the performance you expect. If a proactive approach is required, consider targeting feeder schools and supporting and sponsoring activities that promote your employer brand. Create the network contacts in the schools and community to develop your talent pipeline. Consider clearly communicating your recruiting goals and objectives to the service manager and put measurements in place to maintain accountability for reaching your goals.

4. Communication between front office and service bays. Each dealer principal was asked if he fosters a sales or a service culture, or tries to balance each. None of the principals’ perceptions matched the feedback of the technicians. Many dealer principals felt the culture was primarily a sales culture and they should do more to drive an equal service culture. In these dealerships, technicians felt the front office appreciated the service department and felt that sales makes the first sale but all additional sales are made by service.

Dealer principals don’t seem to give themselves enough credit on how they are perceived. However, in at least one dealership the principal felt he had fostered a balanced culture but some technicians felt the opposite. A few felt they were viewed as an “evil necessity” in the dealership. Dealers may need to bridge the communication gap between the front office and the shop technicians.

Recommendation: Communicate to ensure that service employees know the role they play in the dealership and how important they are to the company’s success. This, for the most part, only costs time and can focus on company updates including performance and any new company goals and initiatives. Give the service department both the time and the opportunity to bring up issues and ideas to improve their performance. There is no set formula for a communications approach, but bad or no communication can create a negative work environment.

5. Tools. Technician-owned tools are a significant issue for new technicians and are, in most cases, required to get their first technician job. The tool reimbursement programs currently in place are viewed as hard to use and not really helpful if the technician has little or no money to buy tools to begin with.
Nearly every technician and service manager identified this as an issue. It’s not known how many would-be technicians see this as an insurmountable obstacle and never pursue a technician career.

Recommendation: Address the high cost of tools. The best program observed was at one dealership that pays one-third of the tool costs, with limits. Industry stakeholders have an opportunity to pool their ideas in a workout format, offering their resources to lessen this significant barrier.

6. Outlining a technician career path. More than three-quarters (77 percent) of interviewed technicians want to advance to lead technician and service manager but don’t know what they need to do or how long it takes to get there. Technicians see career paths into sales, parts management or instruction as viable, and some principals agree. There is an opportunity for dealerships to develop structured potential career paths toward which technicians can work.

Recommendation: Part of the image improvement for the technician career should focus on outlining a sample career path for technicians. An example would be to stair-step cumulative skills combined with time to identify clear levels technicians need to achieve in order to be eligible for increased responsibility, raises and eventual promotion. A skill matrix to delineate skills may be a way to distinguish technician levels and provide skill-based pay models for compensation. This kind of structure demonstrates organization, gives technicians a path to follow, and enables managers to compensate technicians using an objective tool that uniformly evaluates skill levels.

7. Value of the service manager’s activities. There is no question that service managers are engaged in a variety of activities that support the service department. Data collected puts the value-added activity (activity that adds service revenue) of the service manager in the 30 to 35 percent range. Service managers estimate they spend as much as 50 percent of their day providing technical advice over the phone to equipment owners or operators who may or may not end up as customers. Others spend a significant amount of time (not measured) administering their warranty programs. Some do both. The value service managers bring to the department includes managing department financials and profitability, recruiting and hiring the right talent, meeting customer expectations through good customer service and providing leadership and development to the technician team.

Recommendation: Examine the service manager’s process and perform a value assessment on the process steps. Change the process to enable service managers to focus on value-added activities as defined by the customer and principal. Principals should provide service managers with the technical training needed to manage the department and the leadership training needed to lead
the team.

There may be other ways to meet the demand for telephone advice and maybe charge for it. Consider having temporarily disabled technicians work the phone or offer retired technicians a part-time job to provide this service. There are many good ideas out there. The bottom line: These activities may need to be performed by someone, but the service manager is probably not the right person to perform them.
Some dealer principals feel managers should spend more time with customers selling services. Shifting non-value activities and measuring value-added activities might bring expectations and performance closer in line.

8. Service manager development. A good work environment and good management are top reasons why technicians say they stay at a dealership, even when faced with a competitive offer.
All interviewed service managers recognized that the skill set they developed as technicians are different than the skill set needed to be effective managers. Manager skills require knowledge of financials and softer leadership skills. According to technicians, service managers are central to creating and maintaining a good working environment within the service department. And while most technicians felt it’s important for the service manager to have technical experience, all felt it important for the service manager to have good people skills.

No manager complained, but all acknowledged that they could have benefited from management and leadership training prior to or upon taking their service manager role.

Recommendation: Provide potential and new managers training in management and leadership skills. Management skill training should include new technical skills regarding metrics, reporting, and financial management. Leadership training should include skills the new manager will need to lead a team of individuals who were once there peers, such as hiring the right talent, building and leading effective teams and managing conflict. This is a significant investment of time and money. Pick the right manager, give them the right training, and expect the right results.

9. Manager compensation. Most service managers felt their compensation could be improved. Those who felt this way believed they could make more money as a technician, and some felt they would be better off going back to being a technician. There are intangible benefits that keep them from taking that backwards step: They enjoy the freedom of their schedule, customer interaction, trips to meetings and training, teaching people and the authority that comes with the position.

Recommendation: Assign your HR support area the task of benchmarking competitive market rates for the job functions defined for a service manager, and then manage the pay gap if there is one. Outline clear performance objectives to the service manager and enable him to meet them. Setting forth expectations for the service manager may include an analysis of his current activities and ensuring that his future activities meet expectations for dealership success. Understand what motivates your managers and acknowledge performance that meets or exceeds expectations with incentives that motivate them.

Many of Pier’s observations helped identify several potential actions that industry stakeholders can take to address the technician shortage issue. Ultimately, he concluded that it is up to the interested parties to take action.

One service manager commented after his interview something to this effect, writes Pier: “My concern is that I have participated in these types of interviews before and nothing changes. Change is up to the individual dealership, and I see that as a big challenge.”

All of the analysis available cannot cause the dealership or the industry to change. The only real change that will be felt by prospective technicians, current technicians, shop foremen and service managers will be a result of tangible change implemented at the dealership.

For more information about this research, please call Steve Johnson, executive director of The AED Foundation, at 630-468-5134.

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