These are excerpts from the third report given on December 6, 2000 by the Human Resources Committee to the full body of over 400 attendees at the Collision Industry Conference (CIC).

• The looming issue for the collision industry is not aftermarket parts, nor labor rate, nor consolidation... it is human resources.
• The collision industry's number one challenge, as agreed upon by the members of this committee is the overwhelming and increasing shortage of human resources.

What are we going to do about the tremendous shortage of technicians? How are we going to solve the technician problem?

Shops have become either paralyzed or protective. On Human Resources in general, most shops have little hope, few answers, and no idea what to do to about the shortage of technical help.

This committee's research among members, organizations, and publications in this industry allows some thoughtful estimates:

• 90% of shops accept or participate in "Raiding" employees from other shops...employee theft used to mean an employee taking supplies, today it means taking employees from somewhere else.

• 95% of shops advertise in local newspapers, but are not happy with the result

• 80% of shops complain that the vocational trade schools are not effective in meeting demand

• BUT only 5% or less of all shops participate effectively with trade schools

• 20% or less of vocational school students trained in auto body actually enter the collision industry

• 100% of shops  hire non-industry people - generally in the detail department and the office

• 99+% of shops have no specific plan to take an out of industry person, such as a detailer, to a technical position.

• Less than 1/4 of 1 percent of shops use a formal in-house technician or Apprenticeship training program.

The CIC Human Resource committee was created in January of 2000 to review and report on 4 very specific issues which are:

1. Recruiting employees;
2. Retaining employees;
3. Human resources best practices;
4. Training/Apprenticeships.

Point 1: Recruiting Employees

95% of shops view recruiting as:

• "A" or "B" tech related
• Determining how to leverage employed, experienced techs from elsewhere and;
• Necessary only when a position is vacated or expansion occurs

An emerging HR difference is that progressive shops are viewing things differently. They are developing professional HR departments and are recruiting continuously. Other recruiting issues:

• Less than 2% of shops have good recruiting methods
• Less than ½ of 1% of shops recruit continuously

The most common recruiting practices consist of:

• Calling a vendor (typically the paint supplier)
• Asking technicians if they know someone
• Running a newspaper advertisement
• Phoning vocational schools

Related to vocational schools, shops who go out of their way to work effectively with trade schools get first shot at recruits. Imagine the response by the Vo-Tech instructor to the shop owner who never having been in the trade school calls up and says, "Who is your best student?"

Non-Participating shops are NOT rewarded by vocational instructors with student referrals. Only 20% of the students transition to the industry and instructors are very careful who they recommend their students consider.

Schools used to be considered the only "feeder" mechanism to the collision industry.

If schools cannot recruit, train and transition quickly enough from where will help come?

Some opportunities exist for employees, but the industry doesn't know how to seize them. Human resource magazines report non-industry employees are open to work in the automotive field. Many people working in entry level jobs such as counter jobs...fast food, theaters, video rental, basic lawn care and others, are open to skilled trades. They are worried about finding a better, higher paying SECURE job-But they do not know how to get into the automotive workplace, they have no host, and they lack basic tools which previously had to be "earned".

The technical nature of Frame, Body, and Paint makes it a SECURE high paying job. Compensation is not an issue for a mid to high-end competent worker and is favorably compared to non-automotive technical trades.

For those that enjoy being around automobiles, but do not want to work on vehicles, appraising is also a secure high paying job in shops.

Benefits have been a problem in recruiting employees at all levels. However, happily, the benefit gaps between smaller automotive businesses and bigger companies are decreasing. More shops are becoming benefit competitive. Where benefits are lacking applicants continue to search until benefit needs are met and if they are not rapidly met in shops they continue the search outside the collision industry.

Management practices, productivity issues, pressure for cycle time improvements, currently pressure and channel the shop managers efforts into recruitment of "A" techs through employee theft. "A" techs are sought out rather than building new employees internally.

Perform or leave. Managers now are measure on time and space use. A techs make best use of space, but supply is low, demand is high and pressures build.

This issue of cycle time and productivity impedes creation of new employees within the industry. It adds fuel to the increasing appetite for the dwindling number of A techs and also fuels increasing pricing wars for the most productive employees. Every time a technician leaves the industry we are not filling the lost position. We decrease the supply of A techs and increase demand. Cycle time pressures and performance demands increase the battle for A techs. A resulting issue may be increasing labor rate issues.

Point 2. Retaining Employees

They dynamics of supply and demand for A techs and the musical chairs approach is creating a new and unusual approach by some employees who are the top challenge to retention. They place job stability and personal growth secondary to windfall signing bonuses, and negotiated higher wages.

An example of this are the comments of one West Coast technician who bragged that they could gain an extra $10,000 a year in signing bonuses... all provided up front. The tech did this simply by changing employers three times in one year. The windfall was created by "bonusing", but then the technician added that by changing shops they learned to negotiate for higher pay AND didn't have to do any comebacks as an additional benefit.

Human Resource specialists know that how people are introduced...their first day and then the first three days have a direct impact on how long people stay with a company.

It is the equivalent to a "first impression". H.R. directors call it orientation. When people are introduced well (as Apprentices/students) they tend to stay in the industry. Initial professionalism leads to immediate good feelings and trust. Then if the employee continues to be treated well with training, growth opportunity, benefits and the feeling of being needed they stay. Orientation is a key to retention.

Unfortunately the industry does not implement or orientate new recruits well. The orientation process is poor. A good start in a shop tends to build a new employee who stays with the shop they grew up in. Retention begins the day of orientation and then depends totally on the individual, care, feeding, protection and opportunity of the shop.

Market demand for technicians is decreasing the retention stability.

Employees tend to stay where there are three key elements:

1. Work - Does the shop have work enough to keep the technician busy?
2. Good Management - Is the shop managed professionally?
3. Equipment - Is the shop equipped to allow the technician to be productive?

Wild pay methods, bonuses and incentives related to pay are not the highest drivers for most of the better technicians, but they are tempting. It is increasingly hard to retain when several phone recruitment phone calls are received each week at home AND at work.

An interesting element of thinking that seems to be making its way around the United States, is that technicians are developing a sense and aggravation that their personal livelihood is "negotiated" on every job. The recounting of allocated hours and battle on every ticket reduces costs at their personal expense.

Obviously, we live in an industry with three party's issues defined on 90% on most of the dollar volume going through shops. There is a fourth party who has a vested interest that we often forget about...the technical employee. Pressures for cost reduction impact this contingency too. The sides are driving production and cost, but technicians are taking it personally and feel they they are the squeeze point. If this feeling increases it will be harder for shops to attracted new people to the industry.

Point 3. Human Resources Best Practices

People want to have a good place to go to with:

• Meaningful work
• Security
• Good compensation.

Best practices integrate with previously covered issues in Recruitment and Retention. Assuming that a shop has a constant flow of work and the person perceives that they are fairly treated and that what they do is meaningful.

Best Human Resource Practices include the following 12 points:

1. Working closely with area vocational schools
2. Reference checks on all employees
3. Competitive pay for the area
4. Professional orientation upon arrival
5. Clear policy manual and job descriptions
6. Competitive benefit package
7. The shop has tools to do the job effectively
8. Genuine emphasis on safety in the work place
9. Genuine emphasis on environmental practices
10. Good management
11. In-house training/Ongoing training
12. Apprenticing in-house

Using these twelve points on an ongoing basis, a shop can have a better chance at recruiting, retaining, and increasing technician competency and stability.

Point 4. Training and Apprenticeships

Human Resource methods used today in the auto collision industry and the auto mechanical repair industry are not well. As a matter of fact they are in a downward and accelerating spiral. Overall, even the best in the industry do not perform well in any of the four elements this committee has reviewed.

That is the essential boil down of the committee. Things are not well.

In the last two years, I have personally restudied the best practices for Mentoring and in-house Apprenticing in the automotive industry. I went to the market place and found little there. I have personally developed a model, tried it ...and just like it has for thousands of years; Mentoring and Apprenticing...done right... works.

At the highest levels of the top collision repair shops in America, the best and brightest understand and are saying this:

Progressive shops are now using all the above mentioned recruiting techniques, PLUS they are aggressively introducing Apprenticing into their own shops.