It remains to be seen exactly what effect the retiring of the Baby Boomers will have on the American labor force in the coming years. But this population shift will influence all industries, including the aftermarket, which has been having a difficult time recruiting and retaining quality employees.
In addition to a possible labor shortage, our industry’s failure to promote itself to job seekers and a lack of training could leave the aftermarket with some important shoes to fill.
According to the Automotive Aftermarket Industry Association’s 2005/2006 Aftermarket Factbook, the number of people employed in the aftermarket declined in 2004 for the fourth consecutive year. “Approximately 4.54 million people had jobs in the aftermarket in 2004, a decrease of 0.4 percent (roughly 19,100 jobs) from 2003,” it states.
Each aftermarket sector saw a change in the total number of employees. Increases in overall employment were seen at automotive parts and accessories stores (5,700 more people) and tire dealers (4,600 more people). The largest declines in employment took place at motor vehicle parts manufacturers (19,300 fewer jobs) and gasoline stations (4,900 fewer people), according to the report.
Business consultant Jack Lannom talks about retaining your best employees in his new book, “People First.” A labor shortage will create an unprecedented need for organizations to attract and retain their high-performing and loyal employees, he says.
Lannom attests that employees are looking for employers who appreciate their contributions to the company, and employers must focus more on their workers than their bottom line.
“(Employers should) learn the people retention skills — how to honor, value and respect them,” he says. “It’s really going back to the basics that it’s people who truly are the drivers for the performance of your organization.”
As younger generations start to enter the job market, the aftermarket must do all it can to fight for its share of qualified candidates.
Leaders of the pack
Changing demographics have led to one major concern for the industry: A leadership gap in the aftermarket will likely occur in the next 10 to 15 years as managers and other executive-level employees reach retirement age.
“When I was first starting out in the business, and that was more than 20 years ago, there were lots of mentors to look up to,” says Kathleen Schmatz, president and CEO of AAIA. “There seemed to be a vertical path. And today, with all the consolidation and technology, and the need for lifelong learning, it’s a little more difficult.”
The big question, she asks, is “Who comes next?
“Everyone in the aftermarket who believes in the health of this industry and future growth needs to do some leadership training to build our next leaders,” she continues.
Joyce Gioia, president of The Herman Group, management consultants who focus on employee retention for all industries, explains that our industry hasn’t groomed new employees to move into leadership roles, and today’s leaders need to “bite the bullet” and invest in training. “Otherwise, I wouldn’t have a high expectation of them being in business five to 10 years from now,” she says.
In fact, according to a survey by the Herman Trend Alert, recruiters note that it has been much more difficult to find people who have the background, skills and experience to perform as high achievers. According to the report, “The lack of inspirational, role-playing, mentoring senior talent will influence the supply of the generation of future leaders who will follow them.”
Now hiring (again)
For many jobbers, “help wanted” seems to have become their motto as they continue their search for quality employees. Of the 15 jobbers we spoke to for this article, six reported that they were currently looking for employees, although more said they would “recruit and train” if they had the time. Of those in the hiring mode, several say they are having a hard time finding qualified applicants.
Bob Joshlin, president of Speedway Auto Parts, a five-location hard parts jobber in Indianapolis, says most jobber stores are always looking for that good employee, especially the quality counterperson. Because of today’s vehicle technology, counterpeople require more skills than before.
“When we’re looking for someone on our counter, we don’t need them to look through a book; we need someone who can think out problems,” explains Joshlin. “As long as (counterpeople) had a decent memory and wanted to work hard, they turned out pretty successful. Today, we need that IT student just as much as the science industry, the insurance industry, the medical field does. We’re all competing for the same student today.”
Bill McClure, owner of Cedartown Auto Supply, whose business is 60 percent wholesale, says he’s currently not looking for employees, although he could use the help. “I don’t have the time to train a new employee, and I’ve found that we can handle the volume that we’re doing with the people we have. If I were [hiring], I could envision tremendous difficulty finding someone willing to spend the necessary time in an entry-level position and rate of pay that would be capable of learning the business.”
He adds there is a certain amount of frustration on behalf of some parts professionals these days. “Too many of them are placed in front of a computer terminal after a few weeks of ‘on the job’ training and given the title of counter pro,” he states, emphasizing that too many stores lack middle management. “The district manager is usually not specifically educated for these positions and, as a result, might have less-than-desirable people skills. From what I’ve seen, the middle management usually spends less than a couple of hours a month actually inside the store. How can these ‘executives’ get a feel for what’s going on if they don’t step down into the trenches every now and then?”
Other jobbers, however, have found that their business is appealing to job seekers. Dick Hedahl, president and CEO of Hedahls Parts Plus, says he’s not having a hard time finding applicants.
“There are times when it’s difficult, but it’s not the real trauma that I hear some people talk about,” he states. “We have good benefits, good working conditions, our pay is reasonable. I think that helps us in our recruiting.”
Hedahls has about 190 employees in the company’s 22 locations in North Dakota, South Dakota, Minnesota and Montana.
Hedahl notes that jobbers need to make sure their pay scales are in line. “You can’t be the highest paid place because you’d go broke. But you can’t be the cheapest, either.”
According to the Aftermarket Factbook, average hourly wages for most aftermarket sectors increased between 2003 and 2004. Parts and accessories stores saw a 3-percent increase and motor vehicles and parts wholesalers increased wages 2.2 percent. Car dealers were the only segment in which the hourly wage decreased, by 1 percent.
Salary breakdowns
- Motor vehicle parts manufacturers had 688,500 jobs in 2004, a decrease of 2.7 percent. Production workers made up 558,600 of those and earned average hourly wages of $20.40.
- Motor vehicle and parts wholesalers had 340,000 jobs in 2004, a loss of .6 percent. In 2004, the average hourly wage was $16.08, a 2.2-percent increase.
- Automotive parts and accessories stores had 327,400 jobs in 2004, an increase of 1.8 percent. Hourly wages averaged $11.93, a 3-percent increase.
- Tire dealers had 162,600 jobs in 2004, an increase of 2.9 percent. Hourly wages averaged $12.94.
- Automotive repair and maintenance had 891,300 jobs in 2004, a decrease of .3 percent from 2003. Workers had an average hourly wage of $13.68, an increase of 1.3 percent.
Source: AAIA Aftermarket Factbook
Who will buy the parts?
Technicians continue to be the most in-demand employees in the aftermarket. Rodney Pierini, president and CEO of the California/Nevada Automotive Whole-salers Association, says finding employees is a challenge for his members.
“(We’ve) consistently had the need for qualified techs,” says Pierini, who’s been affiliated with the industry for nine years. “There’s always been an intense need on that segment of the industry. On the parts side, it’s not been as significant, but certainly it’s there.”
Currently, the U.S. employs 818,211 automotive service technicians and mechanics, 198,328 auto body technicians and 21,766 auto glass installers, according to the U.S. Dept. of Labor.
An industry white paper developed by the Automotive Service Association (ASA) states that, on a state-by-state level, it is estimated that the U.S. will need 31,630 auto mechanics and service technicians each year. The five states with the largest number of positions open annually are: California (3,700 positions); New York (1,570); Georgia (1,300); Ohio (1,190); and Illinois (1,170), according to State Occupational Projections, 2002-2012 (www.projectionscentral.com).
Steve Weinberg, director of human resources and training for OCH International, Inc., recruits, hires and trains for the company’s corporate-owned centers. Its 58 service centers offer oil changes and other vehicle maintenance.
“Oil Can Henry’s stands for superior products and superior customer service,” he says. “When we talk about delivering outstanding customer service, we make a point to measure ourselves against the best customer service organizations in the world, as opposed to simply comparing ourselves to other automotive service companies.
“The hard part is finding and recruiting qualified technicians and then training in our exacting operating system,” he adds.
Because there are no waiting rooms at Oil Can Henry’s, technicians must be effective communicators.
“When I first started recruiting in the industry, I looked for people with mechanical and automotive background and knowledge,” explains Weinberg. “In a few months, I realized that that wasn’t the most important thing to look for. I can train someone in automotive services and procedures. It’s more difficult to teach communications skills. So everything now is focused on finding candidates with superior customer service skills.”
Weinberg notes that multi-generational auto service professionals were common years ago. “It wasn’t uncommon 20 years ago for someone to say, ‘Well my dad was a mechanic, my grandfather was a mechanic,’ and so on. But our society is changing. Younger people have more options and they want to work on computers, not cars. That means we have to work harder and be more innovative to attract candidates who meet our standards.”
Schmatz agrees. “I think there is great concern about who the next technicians will be,” she explains. “All of us in the industry depend on that level to make or break everything. The guy who throws away the box — and three-fourths of the time that’s the tech — is the guy who really commands our future.”
McClure of Cedartown Auto Supply adds, “We will need customers. I see many of the qualified technicians finding a home with the dealerships. If the only ones working on these vehicles are at dealerships, we’re definitely going to have a problem. I do think that there will always be oil changes, tires and brakes. But that alone won’t keep a jobber alive.”
Word-of-mouth advertising
So what can we do to keep the aftermarket alive? Promoting the industry is our biggest challenge, many say.
“I think we need to look in the mirror and figure out what we’re doing as an industry,” admits Paul Foley, president of the Automotive Aftermarket Suppliers Association (AASA). He outlines three steps we need to take to increase interest in the aftermarket: First, promote the industry as a high-tech, important industry not only to the media, but also to high schools. “We lose good qualified candidates that don’t think of the automotive industry when they’re thinking about a career,” he says.
Second, the industry needs more scholarships to attract students. And third, we need to attract a different type of person today because the automobile has gotten so much more complicated. “You need diagnostic equipment to find out what’s wrong with the car, and then computer equipment, once you know what is wrong, to solve the problem,” he states. “What you’re talking about is a much higher level of person today than the technicians or counterperson of 20 years ago. The industry needs to address this issue and make sure we’re attracting the people who would be qualified to perform these jobs.”
It’s important to point out that the aftermarket has competitive wages and job security — in all avenues of the distribution network, as well as on the manufacturing side, says Foley. “All segments are in need of candidates. And by not going out and proactively telling people how good this industry is, we’re missing the opportunity and losing good people to other industries.”
Joshlin of Speedway Auto Parts has served on school board advisory committees in Indianapolis to increase interest in aftermarket professions, because he feels the lack of employees is an “awareness issue.” He says when he was in high school, automotive trade schools solicited the students who were more mechanical.
“There is a shortage of automotive techs as well as parts people, but if you have more people interested in the field and trying to apply themselves in the field, you’ll have a better pick of the candidates,” he says.
And this effort must be industrywide, believes Peter Clune III, vice president and general manager of Universal Underwrit-ers Automotive Specialty Market, Western Division. “I think the automotive aftermarket is a very splintered segment, and you have a lot of people working on this issue independently. There needs to be a coalition or group to get together and reverse the stigma. It continues to come up in our meetings that this is a major problem that keeps (aftermarket businesses) from growing. Some people don’t expand their locations just because they don’t have enough employees.”
Universal Underwriters is trying to build awareness of this need at the Aftermarket Industry Conference on Nov. 3 in Las Vegas, during Automotive Aftermarket Industry Week.
Training playing its role
At Northwood University, the aftermarket program has had an average of 50 new students for the past three years. Between the Michigan, Texas and Florida branches, there are about 200 students, says Jim John, chair of the aftermarket management department.
“We’ve had a steady influx of students into the program the past three years, but we can never be big enough,” he claims, adding that Northwood is constructing an aftermarket building with the hopes of having as many as 300 students in the program.
“There’s a steady demand through our offices for graduates,” he continues. “We get calls on a regular, ongoing basis,” noting that Northwood places their graduates almost immediately.
The positions Northwood filled years ago were manufacturer-oriented, such as manufacturing reps, John says, adding that today the jobs are all over the board and include companies from auto parts wholesalers to parts retailers and performance-oriented shops.
John points out he doesn’t think our pay scales are any different from other comparable industries, saying that through the hiring process, he gets an idea of starting salaries, which he estimates are between $40,000 and $50,000 for management positions. “That’s not a bad opportunity for a 22-year-old. And they’re being placed in an industry where if they work hard, they can move up quickly.”
The aftermarket must evolve and realize their employees just want to be trained well and paid well to advance in this industry.
John says Northwood’s open houses are very effective because students and parents can ask questions about the aftermarket.
“We are the invisible industry. They know about the Pontiac dealerships and the Chrysler dealers, but not the aftermarket,” he informs us. “The aftermarket can help itself greatly if it would go to the high schools, the vocation schools, and present themselves and talk about their business and the opportunities available. We in the aftermarket are our own worst enemy. We’re waiting for someone to walk in the door, and it isn’t going to happen.”
About the Author
