Are You in a Death Spiral?

April 26, 2023
It’s time to solidify your position with the customer base.

Recently, I had to send vehicles into a body shop due to wind and tree damage. This was not one of those small, local places, but a large franchise of body shops that each of you likely have in your city. It’s one of those big enough that they have a Geico satellite office built into it.

Taking a look around while I was waiting for the estimate of repairs from the insurance adjuster, I didn’t notice much movement in the shop area. Just inside the office with my adjuster, I noticed the general manager and struck up a conversation regarding employees and hiring. They are short-staffed by seven to 10 skilled employees to keep up with demand, as they were scheduled out all the way to July with the current staff level.

When we got to talking, it came up how he cannot get this new generation of workers interested in the jobs. They don’t want to apprentice or get dirty. They just want to get paid for what they already know. And this is a prime example of what we are dealing with in our businesses each and every day.

Many of us are old-school operators—let’s admit that. We don’t just give away raises or opportunities. We have been taught that we must work hard and earn our shots. However, somewhere along the line, someone stopped instilling this into our children. Whether it be society or changing of eras, we told our kids that they can do whatever they want, make as much as they want and be anywhere they want just because they could. This has left our industry in a labor death spiral.

What is that exactly? It’s used in reference to a rapidly worsening situation, typically one that ends in disaster, which many of you would say you are in when it comes to finding employees to operate our locations, skilled ones to manage them or certified ones to work in our advanced positions. You are looking for good employees but are having to pay a premium cost for subpar ones. This raises your daily costs in labor and you then lower how many are on the clock to combat that, much like most people would do in order to balance the accounting. Now you are faced with having to process your customers with slower bay times or worn-out employees. This causes two things. You start to lose customer counts to your faster competition, or you end up losing employees who were not interested in working that hard to begin with. The spiral continues.

But how can you escape this and come out better on the other end?

First, and it will be the hardest to accept, is that you are going to likely have to bite the bullet and staff the locations properly. This may hurt before it gets better. But to maintain your customer counts and build them, you will need labor. Secondly, build your own in-house training program for those expensive skilled employees that that you are always seeking. Now, this is where you can balance the labor scales and potentially pull in some of those next gen employees. They are looking for a job where they can grow and make more money. They leave when they don’t see a way to advance. If you can give them the purpose that they are looking to find, you could see your never-ending search end on that side of the business. Unless, that is, you are happy overpaying those skilled guys until they find someone else that will pay them a buck more.

Just as I finished my conversation with the body shop general manager and was turning to leave, in walked a younger guy wearing a competitor’s uniform. I decided to stick around and pretend like I was checking my emails on the phone. The kid was looking to talk to the manager about a job. They meet, shake hands and the kid proceeds to tell him he’s looking for a job. The manager asks if he has time for an interview. The kids says that he is on lunch break and just wanted to know how much they were hiring for if he was to come there. These are the same conversations that your employees are having right now if they don’t see a direction forward. It’s time to invest in your people and reverse the spiral. 

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