The automotive repair industry beats national averages.
I recently received the preliminary results for our 2006 industry survey and the results are very promising for our industry. The full results will be in the September issue of BRAKE & FRONT END, but I am going to share with you the results that receive the most attention.
I get more requests for salary survey reults than any other survey information. I do not like to publish it because in the wrong hands it could be used as a weapon against employee and employer alike. It is a double-edged, extremely blunt sword.
I have nightmares about a technician going into his boss’s office with BRAKE & FRONT END in hand to demand a raise. Also, I have a nightmare about a shop owner giving his employees a cut in pay because he saw the Salary Survey. The dream usually ends in technicians and shop owners beating me senseless in my office.
Here at the offices of BRAKE & FRONT END, we have our own set of problems when it comes to how much people make. We have a policy that says you are not allowed to discuss how much you make or the amount of any raise. If you disclose the information it is grounds for dismissal. Some people see it as an evil conspiracy to keep people down, but it is a policy that helps to keep people from making unfair comparisons.
But, for some reason the topic of “who makes how much” comes up in office small talk a lot. Call it curiosity or jealousy, the information is often inaccurate and misleading and it leads to disgruntled and hurt egos. The damage caused by this false information goes both ways and does little to advance a person’s pay. They forget by looking at just paycheck stubs that there are other benefits like health insurance, paid time off and bonuses that matter more that pre-tax dollars.
Salary information is one of the most difficult forms of information to compile. It is not because it is a social taboo to ask people how much they make, but it is due to the regional economic aspects of our large country.
The best salary survey that you can perform is to go looking for a job in your area. According to our survey, 65 percent of shops are looking a technician, so the opportunity to find a new employer is endless.
We asked shop owners if they offer healthcare coverage to their employees. 85 percent said that they offer a type of healthcare coverage. This is on par with the government figures on health insurance for the country as a whole. But, when you look at the number of small businesses outside of the automotive repair sector, shops beat those numbers by at least 15 percent in most cases. Dental coverage can be a big perk. 29 percent of the shops surveyed offer dental insurance. This number is again in line with the government’s number of 30 percent. Smile if you offer your employees dental coverage.
34 percent of shops surveyed offer some form life insurance. These policies also cover a loss of a limb. The national average is around 39 percent. Let’s hope people do not have to use this benefit. Training is a big issue in our industry. It is a critical component to keeping the automotive repair industry solvent. 64 percent of shops surveyed offer paid training. The other 36 percent need to realize that paid training helps retain and attract employees. Also, an investment in an employee will result in an immediate return on your investment.
Working on cars can be messy. Looking professional while doing it is a big issue. 85 percent of the shops surveyed offer work clothes and laundry services.
Only 70 percent of shops allow employees to work on their own vehicles after-hours. This means that 30 percent of technicians do not have this benefit. Some of my best memories as a technician were made staying after-hours to work on my own or a co-worker’s vehicle. It was an unwritten rule that you could not use the shop to “moonlight” on non-customer vehicles (you had to go home to do that). We typically used the time to relax, drink a beer and decompress from a hard day while we worked on our own vehicles. It is a great benefit that helps to keep moral up and build teams. But, I also understand the other side of the argument if a member of the management has to stay late to baby-sit and lock up.
How Do You Get Paid?
With the overall American employee/employer relationship changing drastically with people being hired as temps, consultants and independent contractors, we were curious to see if shops were using the same strategies to improve their bottom line. Only 5 percent of the shops surveyed have their technicians hired as independent contractors.
How you get paid is just as important as how much money you make. Many technicians leave dealerships for independent shops to get out of the flat rate system that is dominated by near impossible warranty times.
Only 23 percent of shops pay on the flat rate system. A surprising 25 percent pay their techs a salary. The majority of shops (52 percent) pay by the hour. Only 22 percent of shops have technicians that make a commission off parts installed.
Getting paid while an employee is either sick or on vacation is another great benefit. 88 percent of shops offer paid vacations, while only 55 percent of shops offer paid sick leave. Other forms of compensation vary from shop to shop. 29 percent offer a pension plan. 28 percent offer a bonus plan. 17 percent offer a form of profit sharing. 14 percent offer a tool allowance.
This time we asked what is the pay range between a shop’s entry level and their most experienced technicians. The national average for entry level technicians was $25,530. We did not qualify if an entry-level technician by the level of training or certification. This is not this bad when compared to some entry-level careers for people with four-year degrees. But, it is also a small amount when you consider that an entry-level technician has to pay for their own tools.
We then asked what shop owners pay per year to their most experienced technician. We calculated an average of $43,941. We received responses that ranged all the way from $90,000 down to $32,000. The number should not be used to negotiate a pay raise or cut. Please do not use these numbers to set starting wages.
Overall, this survey paints a very positive picture for the auto repair industry. It shows to the outside world that working in the automotive repair shop is a great career choice that lets people work for small businesses and still have pay and benefits that are on par or better than many larger non-automotive companies.
The survey showed that the automotive repair industry is expanding and growing. In figures that will be released in the September issue of BRAKE & FRONT END, it is evident that undercar shops are offering more services.
Shops are investing in their inventories and capital equipment. Also, more shops are investing in their technology infrastructure by buying computers, software and faster internet connections. The survey also pointed towards growth and other opportunities for people in the automotive repair industry. 60 percent of shops indicated that they have a designated service writer, sales person or general front counter help.
Thank you to all the shops that took the time to fill out the survey.