Advice on Offering Competitive Job Benefits
You see it all the time: shop operators are consolidating their businesses, and gaining strength in numbers as a result.
Caliber Collision and ABRA merged in December 2018, for example, and other shops are being bought out by the top consolidators, a list that includes Caliber Collision, Gerber Collision & Glass, and Service King. Now, CARSTAR has announced it is making significant growth plans in 2019 and other smaller regional MSOs are combining.
While these shops are sweeping across the country and expanding, independent shops are still competing in the same markets.
So, questions remain: What happens to the benefits that larger consolidators can offer employees compared to independent collision repair facilities? And how can small collision repair businesses offer benefits like health care that will allow them to compete with consolidators for talent?
Sue Ritzman, human resources manager for Nagy’s Collision Centers, manages human resources for not just one shop, but 12 locations, and the individual personalities that go along with it. In her four years working at Nagy’s, she has seen employees choose Nagy’s because their other place of employment lacked certain employee benefits.
Ritzman believes that, moving forward, employees will search for companies that offer more benefits than small operations typically do. She shares her thoughts on how consolidation affects the employee benefits—mainly healthcare—that a company offers.
As told to Melissa Steinken
What does your job role entail for a collision repair shop with multiple locations?
The job encompasses everything from hiring, onboarding, performance reviews, employee-coaching and relationship building, legal and compliance, and benefits. Daily tasks include scanning for any employees and applicants, answering employee questions, keeping up with the latest changes in the industry and employment law. I keep necessary records, continually scan for better benefits for our employees and build work relationships.
Can larger companies offer more in terms of employee benefits?
More locations allows us to have more bargaining power with the number of employees that we have.
It really comes down to weighing what is available and the benefit it gives your employees. You have to take into account whether the employees will view the new benefits as a positive or negative change.
What trends are you experiencing in healthcare?
Our healthcare provider has expanded its network to us by integrating more providers for an expanded network.
Many individual owners cannot afford to offer and provide benefits to their employees. The larger the company, the more you are able to offer to your employees. For example, we offer benefits including healthcare insurance, dental insurance, vision insurance in which we pay the premium, a term life insurance we also pay for, a 401(k) plan that we match at different tiers, voluntary life and disability insurance, and we also provide employee discounts.
We provide shirts and sweatshirts for technicians, and coats, vests and shirts for the administration staff. We give our technicians a $200 pants allowance per year and a $100 safety gear allowance.
What advice would you give independent shops when it comes to offering competitive benefits?
Well, shops can join some groups out there that would help them get better rates on healthcare insurance. For example, there are some business groups a shop can join that can then consolidate the businesses so the shops can offer more to their employees and have greater bargaining power.
Also, one thing I do every year is negotiate with the broker and health insurance company on the rate we get. I keep going back to them until I get the rate I want. I ask questions like, “What are my options?” and sometimes I have to research some other health insurance options as a way to present the case that if they can’t offer me what I want, I’ll go with another provider.
What has been the result of this approach to negotiation?
No one wants to have to go out to bid and change health insurance companies. I’ve been at Nagy’s Collision Center for four years and the broker and healthcare provider we have now was here before I was.
We have had success and last year our provider came back with a 28 percent increase on the policy but I negotiated it down to 8 percent. Then, two years prior to that, we locked in at a two-year no increase agreement with a one-month payment holiday. Under 8 percent is under industry standards. Typically, industry standards for healthcare are at an 8 percent or 9 percent increase per year.
Have you had a high employee turnover rate or has it been lower because of the benefits you offer?
We do have some turnover but not an extremely high turnover rate. For management and administration, we have a low turnover rate but for technicians it is not extremely low. In fact, a lot of employees we do get is because they did not receive good enough benefits at their old job. We do a run down of all our benefits in a second interview with the potential hire and we offer them information on the specific plans we can give them.