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On nearly all of my dealer calls lately, the need for qualified employees becomes the forefront of the discussion. What was originally an issue of finding technicians has now expanded to include parts department personnel and secretaries/bookkeepers.

To combat the labor shortage, dealers are proactively implementing several creative tactics to improve employee retention. A few of the trends that I notice include more flexibility in employee scheduling, trimming down hours worked per week, and proactively increasing wages.

A few dealers have mentioned trimming their workday hours from 7:00am-5:00pm to 7:30am-5:00pm or from 7:30am-5:00pm to 8:00am-5:00pm. A few more dealers have decided to close on Saturdays from mid-December to mid-March. A couple of dealers are also planning to close on Saturdays this summer.

Working on Saturday is also the hottest topic on the recruitment front. One dealer mentioned that among their previous five interviews with prospective employees, working on Saturday was an obstacle for hiring each of them. Another noticed that when working on some Saturdays was brought up in the interview process, applicants mentally checked out of the interview.

Last fall, one dealer thought they had a parts person hired, but two Iowa Hawkeye home football games on Saturdays ruined the potential hire. I have also heard from many store managers lately that working on Saturdays and the number of hours worked are becoming downsides to their positions. Many of these are younger managers replacing store managers who have recently retired.

Many dealers are also taking the time to evaluate the economics of being open on Saturdays during the off-season. Many say that they don’t sell enough parts to justify being open, and their technician efficiency is also poor on Saturday.

Could technicians produce as many billable hours in a 5-day work week if they knew they didn’t have to work on Saturdays? It is something to consider. Assume you currently work Monday-Friday, 7:30am-5:00pm and Saturday 7:30am-12:00pm. That is a 47 hour-work week x 65% billing efficiency = 30.6 billable hours/week. Can we get those same billable hours in a 42.5-hour week with 72% billing efficiency and still get away with paying techs the same weekly amount?

Customer expectations is always something to consider when you have the “closed on Saturdays” conversation. After discussing it, most dealers I talk to realize that only a handful of customers will complain.

Probably one of the biggest reasons dealers don’t close on Saturdays is because their competition is open. I remember one dealer principal saying, “I don’t mind being closed on Saturdays, I just don’t want to be the first one and I don’t want to be the only one.” Now that the trend has begun, I anticipate that most dealerships will close on some Saturdays throughout the year within the next few years. Some dealers are having this discussion already with other businesses in their town, as they know everyone is facing the same workforce issue too.

Dealers are becoming more flexible when their employees request time off. One dealer said they are letting one of their parts employees coach high school sports in the afternoons. This person works until 3:00pm on days they are coaching. They say as long as they have one parts person working later in the day, everything runs smoothly.

Others have mentioned that they are working with employees who want to leave at noon on Fridays to go camping in the summer months. Another said they plan to implement a pilot program where techs work four 10-hour days.

I firmly believe that in the long run, the dealers that provide employees more flexibility but still provide good customer service will be the winners.

The last trend I’ve noticed lately is dealers proactively increasing wages. Numerous dealers say they have increased wages once already this year. Some say they’ve raised wages two or three times over the past year! With these increases, dealers are also realizing that they are falling behind on necessary increases to their customer labor rate. Many are saying that—according to the industry multiplier—they need their customer labor rate to be near $140/hour. One dealer just raised to $170/hour. Dealers are also having serious discussions with customers about the need to raise the hourly rate in order to be able to retain knowledgeable technicians.

It will take time for the labor shortage to correct itself, if ever. Dealers that are proactive in addressing the issue will retain current employees and be successful in hiring new employees. Those that don’t adjust to the current environment will have a long uphill battle ahead of themselves.