The American automotive industry has a big problem. A bigger than big problem. One that is significantly impacting dealership operations, customer retention and profitability. And if not resolved, the heartburn will only grow. Though dealers are aware of it, most struggle to address it.
It’s the shortage of automotive technicians and the dilemma dealers face in fixing it.
Long a major pain point, it’s escalating into an outright obstacle to future success. Like never before, dealers are straining to find and retain technicians to properly care for their customers and simultaneously generate profit. It seems most dealers are continuing to look into their rearview mirror to past solutions that have become mostly ineffective.
There’s a national shortage of nearly 800,000 technicians, and it’s expected to grow to 900,000 by 2026. In some markets, more than 30 percent of dealership service bays go unused because of the worker shortage. Interest in technician careers has declined steadily for 25 years. Incoming automotive techs from postsecondary programs declined nearly 12 percent last year alone. Meanwhile, technicians are aging out just as the service industry is expected to grow significantly in size and importance to dealerships.
I experienced this critical need firsthand during my years of working in the auto dealership business.
We need a succession plan to leverage available technician intellect and create a transfer of knowledge, passing the baton to the next generation so we can retain this wisdom within our organizations. We must also introduce the automotive industry to a new wave of young talent.
Dealerships’ personnel expenses have escalated as they keep increasing their technician compensation rates and offering bonuses to attract new employees. Yet, first-year turnover rates for technicians continue to climb. For dealerships, technician staffing is the new battleground.
Many dealers and automotive groups are attempting to “grow their own” — implementing their own technician training and development programs. This can be a very worthwhile approach, though it presents challenges — namely, a significant investment of time, finances and staff to develop and implement such an in-house training model. Then, once the model is in place, the task of recruiting future technicians remains.
Indeed, on-the-job training and development — apprenticeships — are an answer. I would argue they are the answer. Yet running an on-site apprentice program while also running a dealership is like running two businesses at once.
In many markets, the shortage has expanded well beyond the point where individual dealers can cobble together in-house apprenticeships. A more holistic approach is needed, and a growing number of dealers are discovering a solution by hiring independently operated auto tech apprenticeship providers that focus solely on addressing the shortage of auto technicians. It’s a turnkey approach that includes managing apprentice recruitment, conducting candidate interviews and orientation, providing soft skills training and managing compensation — as well as providing hands-on education and training for each apprentice. And, importantly, each apprentice is matched with a nearby dealer for full-time employment.
Research shows that employees who participate in apprenticeship programs are more likely to remain with the company after completing the program.
Fixed operations are the foundation for long-term dealer success, so resolving the technician crisis should be a priority. It will take forward-thinking dealers, industry organizations and automotive professionals to unite and to create promising, reliable pathways for future technicians.
This collective approach will make us stronger and way more capable of taking on the elephant in the service center.