Good help is hard to find. Many shops make it harder because they fail to understand the value top talent brings to their business. My brother, who was a diesel technician and now manages the shop he works in can tell you what it’s like to get help. It’s damn near impossible. COVID-19 has many people staying put if they are fortunate enough to have a job, and let’s face it, leaving someplace you are familiar with to go work somewhere you are not is a big risk.
So what can you do to attract good techs to your shop?
We spend a great deal of our time on recruiting, engagement, and retention. Compensation is the other critical piece that plays a vital role in keeping your talent home, and attracting new candidates in the door. Let’s start with pay.
A mechanic’s pay structure can vary. It may be hourly or commission. According to the Bureau of Labor Statistics, the median annual pay for a mechanic was $39,550 in May 2017. The lowest 10 percent were compensated less than $22,610 annually while the highest received over $65,430.
Where does your shop fall on this scale?
3 Tips for Evaluating Technician Compensation
1. If you are not in the top percentile of salaries you will have a difficult time attracting technicians.
You have heard the phrase you get what you pay for. The better the talent, the higher the investment. Business owners tend to play the game of seeing how low they can pay someone and how much work they can get out of them. It’s common practice. Ultimately, this creates a barrier when hiring is involved.
A few years ago I was working with a shop owner, and he absolutely refused to pay more than the bare minimum for his techs. Needless to say, this became a short engagement since he failed to understand why he couldn’t get anyone capable of doing the work to apply. His mindset was paying more only costs him more and didn’t lead to improved performance. He was stuck in the low percentile.
His shop was in a small, rural town, and he saw what other businesses were paying and assumed he could get away with the same. Pulling technicians away from metro areas is already difficult enough. Doing so for less money than they could make elsewhere priced him out of the market.
There are many tools available that can help you see where you should be compensation-wise. Sites like salary.com, glassdoor.com, and WrenchWay can give you some guidance. A few quick searches help you establish a baseline for the salary information that is out there. I always warn business owners to do more research as the salary ranges can be skewed higher. It may also be helpful to talk with the recruiters. They can give you some feedback on where salaries are at. No business owner ever wants to pay more than they have to. However, if you want a successful compensation plan you need to know what your competitors are paying.
2. It’s not about the money.
You might be asking yourself, why I would tell you a good compensation plan isn’t all about the money after I just explained the money matters? Salaries are a good gauge of what a shop owner is willing to invest. If you are uncomfortable paying more than the minimum you definitely won’t understand Tip #2.
The main reason why techs leave, or stay, in a company has little to do with their salary. This is true not only in the automotive and diesel industries, but in every other market as well. Employees value fit over finance. How their views align with work culture and how management treats staff are a greater motivator than salary alone.
Most people never consider culture part of a compensation plan. This is why it is important to consider how the work environment affects the team. This is an intangible benefit that can make the biggest difference if you are able to describe what your work environment is like. What type of people are a good fit for working for you? Are there specific behaviors you see in your existing staff that would attract like-minded candidates? Knowing your environment is important. Living it is something else. Be sure what you are looking for is what you can promise.
3. Compensation plans are like engine timing.
There is nothing better than the sound of a machine that is running perfectly. Your techs spend much of their time guaranteeing that for your customers. A successful compensation plan is all about adjusting the timing of several components to make sure it attracts and retains the best talent. Beyond pay and culture there’s everything else. If you rely to heavily on one you may lose out because of another.
As an employer, you should educate yourself on all the other benefits that can go into a total compensation package. Not everything may be in your plan. Maybe there are items you can’t afford. Here is the part where the ‘timing’ comes in. Knowing what is available, what others are offering, and how you are different matters. So else what could be included?
- Benefits — This may include health insurance, disability (both short and long-term), retirement plus a match, and health and wellness reimbursements just to name a few.
- Performance Management — What if an employee meets specific goals? Performance rewards can create a win-win for the business as well as the technician when done properly.
- Training and Education — How do you endorse further skill development? Do you set aside money for continuing education and certifications? Investing in your people is a great way to keep them. So many owners worry about training their staff for someone else they never take the time to factor in the ROI for their own company. Who knows, you just might keep the good people around if you invest in them.
- Recognition — When was the last time someone heard about a job well done? Most employees only hear when things go wrong. This says a lot about culture and the type of people you attract. Recognition is a valuable, and inexpensive, benefit too few companies embrace.
- Work-Life Opportunities — Vacations are standard. Making sure people actually take them isn’t always the case. Are you able to offer other perks? Would flex-time be possible? Paid time off? The happier your team is the easier it will be to keep them.
- Share the Growth — Other creative ways to keep your staff is to give them skin in the game. Ownership has its privileges. Equity can be a great reward that keeps people motivated. Now they are working for themselves as well. There are many ways to build an equity plan. Not so sure about giving up ownership? You can also implement a profit sharing program that will allow employees to gain extra income when the company does well.
- Employer-Paid Taxes — Ok, this isn’t your typical benefit that employees get excited over. Still, it is important to let your staff know the full benefit that is paid by you. Social Security, Medicare, unemployment insurance, and worker’s compensation are all hidden investments they never see.
Review Compensation Packages Regularly with Technicians
When was the last time you sat down with one of your employees and went over their full benefits package? Your team is quick to remember what they are paid as a wage and often forget all the other things that go into their compensation.
I encourage clients to meet with each member of their team annually to go over their benefits so the employee can see what they receive, ask any questions, and know what to expect for compensation going into the next twelve months. This helps create awareness for total comp plus helps them understand what they might miss out on as far as other benefits if they were to leave. Remember, pay isn’t everything unless it is the only thing they know.
About Dan Paulson
Dan Paulson is a coach, speaker, and consultant that helps businesses achieve greater growth and profitability in any economy. His Go Far, Go Fast! Method helps business owners overcome their challenges to produce high performing, sustainable companies while improving workplace culture, communication, and quality of life. Dan can be reached at danpaulsonletsgo.com, or by calling 608-467-0223.