By the time that you read this article, we will be well into the long, hot and busy summer days in our industry. The country is opening back up and people are traveling now in higher volumes than we will have seen in a few years.
As the demand for maintenance increases due to the lifting of restrictions, many of us are going to be in dire need of a workforce that is just not coming back to work. High staff turnover rates are nothing new for the preventative maintenance industry, but they have worsened in recent months. The struggle to find, train, and keep reliable staff is more difficult than ever, resulting in higher recruitment costs and putting extra strain on already struggling businesses.
To get qualified applicants in our industry now, we will have to bite the bullet.
New Landscapes
Let us begin with the most obvious issue that we will deal with from this point forward. You will have to contend with the government’s decision to give out free money.
We can all say that during that time period, with many out of work, it did boost the economy slightly. We still had restaurants and theaters closed, but you saw an uptick to your bottom line each time a draw came out.
However, this has created a death spiral to small businesses and the retail industry. With this extra boost to unemployment, people changed their spending habits and now the applicant expects you to have to accommodate them with this style of pay. How many times have you heard that they make more on unemployment? The only way to get someone in the building now is to pay them double digits in hourly pay rates.
Pay Scales
On to your next issue that stems from the increase in pay for new hires, your current staffing. Without even discussing this future $15 minimum wage increase in a few years, if a new hire must make $11an hour in January, how much does your former $12 an hour, experienced technician need to make to compensate for their experience? What about that $14 assistant or your salaried $50,000-a-year manager?
Your labor costs are going to skyrocket in the next 12 months, with no real increase to your customer base and seemingly lower bay times, as you are unable to secure the proper staffing.
The Bottom Line
And so we get to the uncomfortable conversation that will solve all these issues on your bottom line. You are going to have to raise prices. Now, before you argue that we already charge enough or this will run our customers off, realize that this is what happens with inflation.
As your supply costs rise, you seemingly must raise prices to compensate. As your labor costs rise, you will do the same. You will not be alone. McDonald’s, Amazon, Walmart and many more are going to be doing the same. That $8 Big Mac meal will now be $9 and so on and so forth across all industries. You are going to have to do this, because otherwise you will have no staff.
How much you increase your base cost is up to you, but it should be reflective of your own costs. If you are increasing to $12 an hour on average, determine your cars serviced per hour and even it out. That may sound too simple, but that truly is the easiest way to minimize the brain power needed to bring about the cost change to your business.
The Bright Side
It's not all doom and gloom for the future. We have had moments in history just as this one, where we have staffing gaps or cost increases. It is the nature of the beast. Good, experienced employees are going to want to get paid what they feel they are worth. If you are not the one willing to pay to retain them, then someone out there is going to be willing to pay them to stop their own staffing gap. If we understand the changing landscape and its costs to our profitability, you can make changes now to sustain the hit overall. This is the world that we live in now in hiring and recruiting and knowing what you are facing is just half the battle.
