New study offers blueprint for dealership fixed ops staffing success

The shortage of talented auto service technicians is acute and growing. The turnover of service advisers at new-vehicle dealerships has come to resemble a revolving door. Workers younger than baby boomers aren't especially interested in dealership jobs, including those in the service department, parts desk and body shop.

Even as franchised dealerships must rely on service revenue for an ever-greater share of their profits, such dreary workplace realities may seem permanent facts of life for dealers and fixed ops managers. A new report, though, offers cause for hope — but only if dealerships are prepared to change the way they treat their employees.

Cox Automotive's 2019 Dealership Staffing Study notes that nearly one-third of the members of Generation Z and younger millennials — roughly, people from ages 22 to 28 — who were surveyed for the report express interest in working for a dealership. That rate is 10 percentage points higher than it is among older millennials and members of Generation X (ages 29 to 54). And these younger employees are at least as attracted to technician jobs as they are to sales and administrative positions, the study says.

The study also concludes that the alarming annual turnover rate among service advisers — nearly one out of two, according to the National Automobile Dealers Association's most recent Dealership Workforce Study — may be moderating, at least for now. These findings are good news.

Now the bad news: The Cox study warns that half or more of service advisers and other service employees are likely to feel disengaged from their jobs.

That lack of enthusiasm is an obstacle to worker retention, especially at a time of low overall unemployment. The loss of good, experienced workers can depress satisfaction among a dealership's service customers, and thus fixed ops profitability.

"Talent and technology are key to the future of the service department," Tracy Fred, general manager of Cox Automotive's Xtime brand, told me. "Dealers need to figure out how to lean into this profit center."

The study recommends five "tactics" — in effect, changes in institutional culture — that can help dealerships hire and keep the employees they want:

1. Embrace a more flexible culture.

2. Reconsider your pay and benefits plan.

3. Offer career planning and professional development opportunities.

4. Offer the latest tools and technology.

5. Prioritize workplace diversity.

How could these tactics particularly apply to service employees?

For service technicians, a better work/life balance could include greater flexibility in their schedules — more free weekends and nights, fewer hours overall, more vacation time. To achieve these goals, Fred notes that some dealerships have adopted four-day workweeks and other unconventional scheduling tools.

On pay, the Cox study finds that current and potential dealership employees disdain commission-based compensation. Complaints among service advisers that too much of their income depends on commission sales are chronic, and a big factor in their turnover rate. Fred suggests that greater efforts to show, rather than tell, service customers what they need through objective data and inspection reports could ease the pressure on advisers to "upsell."

Similarly, technicians routinely cite flat-rate pay plans — essentially piecework — as a major source of dissatisfaction and turnover. Although flat-rate remains the most prevalent form of tech pay, more dealerships have introduced hybrid plans that also include income guarantees.

One of the greatest areas of frustration expressed by many younger techs and service advisers is the lack of a clear career path at their dealerships, reflected in scant training opportunities and sporadic (at best) feedback from their managers about job performance, goals and options.

Workers who feel their bosses don't care about them and their aspirations for advancement aren't likely to stick around, or to be especially productive on the job. By contrast, Fred says, good development plans help dealerships maintain their talent pipelines.

A separate study last year by the consulting firm Carlisle & Co. found rampant job dissatisfaction among the 35,000 dealership technicians the company surveyed in the United States and Canada. Among their biggest gripes: poor access to special tools, workshop technology and diagnostic equipment.

As service departments must prepare in coming years to maintain and repair large numbers of electronic and autonomous vehicles, that perceived lack isn't reassuring.

Finally, diversity. Last year's NADA work force study found that barely 1 percent of dealership service technicians were women. Whatever the reason, that blatant imbalance doesn't suggest an industry that's interested in looking like its customer base or overcoming the technician shortage. Similarly, just one of five service advisers is female, although Fred notes: "Women make great service advisers."

The Cox report correctly observes that a dealership's greatest advantage is not the economy, however robust, or interest rates, however low, or consumer credit availability, however easy. Rather, its biggest asset is an engaged work force.

The study offers dealers and fixed ops leaders a road map not only to staffing success, but also to broader profitability. Will they read — and follow — it?