In the months since the pandemic caused a worldwide shutdown, our industry has seen many changes that are causing challenges in the industry. Higher wages, costs, low applicant pools and more have plagued us since 2020.
These are things that we just simply cannot control, but we must find a way to work around this new normal. I will talk about some of these rising issues and give a few tips on how to combat back to increase your bottom line and operations.
Inventory and Supply Chain
We have all been affected by this since 2021 at least. Lack of materials and labor have caused shortages of our required materials to do oil changes. Oil filters, air filters and even oil have been affected.
This does not stick with just our industry, but the auto parts stores and retail sector as well which causes even fewer options for your supply. What I have done is work with my supply chain to source other options for what I need. Your distributor does not carry just a single brand. You can have options such as Mobil 1, Purolator, and more.
For oil issues, ask your supplier about an in-house option that is available in case your name brand is not. The idea is to get what you need to service your customers, because if you are doing these things, your competitor is.
Staffing Issues
The root of many of these supply issues hinges on an issue that is currently your biggest issue: staffing.
Let us be real. Your shortages are not for a lack of availability of steel or aluminum, oil running out of the refineries and the drilling stations. The shortages are due to not having the bodies to produce these materials. When the world shut down, many lost their jobs across the country.
One action that was taken was to give a stimulus to help keep the people on their feet. There were other orders that were laid out such as rent freezes, credit card payment pushes, and more. Well, one thing that happened when the world started to open back up was a thought process of what someone “expected” to be paid. Your $9-to-$12 employee is no more since they now made more on unemployment than when they were working.
The standard ask now from many is $15. This was what they made sitting at home, so why come back for less. Many of you do not want to pay a team of entry level technicians that high, plus that bump you will have to give to ASMs and Managers, as well. This is the predicament that the industry is in. Just think, would you have thought that you would see a “Now Hiring $14 an hour” sign up at places like Hardee’s, Burger King, or Dollar General?
There is not much that you can do other than keep a pipeline of hiring coming in and put together some benefits to keep them in your house. Once you stop looking, the dealership or the competitor will offer you crew more money to jump ship and you will have nothing to replace.
The Future
What will our shops look like in a year? Are we going to have to raise prices to counter the cost increases that you are experiencing, which risks lower customer counts if you price yourself out of the market?
Will we be forced to look for lesser quality products due to availability, hence giving the customer an inferior service that what they have expected in the past. Will you have to look for breathing bodies just to clock in and play on their phones while increasing your service times? Hey, these are worse case scenarios.
The hope is that we start to take steps forward and increase the supply chain, working with multiple options to keep your customers satisfied. We can use multiple options to find good people, such as newspapers, indeed, Facebook, and even this very magazine.
And finally, investigate as minimal price increases as you need to balance your expenditures, not gouge your customer, and use the labor rates as an excuse. Think strategically and you will find yourself in this latter part of the paragraph but if you do not, you will find yourself in the top half. Which one do you want to be?
