Analyzing Raymond James' Tech Shortage Research
Steve Hansen is “a finance guy,” first and foremost.
But Hansen, an equity analyst with Raymond James, is nevertheless trying to help solve one of the biggest issues facing collision repairers: the technician shortage. He was instrumental in creating a recent survey, published by Raymond James on behalf of the Boyd Group, that included insight from 157 North American collision repairers. The survey examines key trends currently impacting the industry.
“The industry, as a whole, is really going to have to get its head wrapped around how they both attract new people to the industry and, ultimately, retain them,” Hansen says.
“That’s the intention [of the survey]—trying to understand how this progresses.”
Recent research from other organizations, such as the Collision Repair Education Foundation, sounds rather alarming, indicating, for example, that the industry needs 150,000 technicians in the next 10 years to meet demand. Hansen’s industry survey, however, offers at least a slight glimmer of hope for body shop operators, indicating that the technician shortage may be stabilizing somewhat.
Consider: In the second quarter of 2019, 35 percent of survey respondents—from throughout both the U.S. and Canada—said “technician availability today” is worse than one year prior; in the third quarter of 2018, that number was 10 percent higher, at 45 percent.
What’s more, 5 percent of the survey’s recent respondents actually said they felt the technician shortage was better than a year ago, representing a 3 percent increase in that category from late 2018.
Modest upticks, to be sure, but perhaps reason for optimism with regard to a sore subject within the industry.
FenderBender recently spoke with Hansen to find out more about the survey and what it says about the foreseeable outlook for collision repairers.
Why, and how, was this survey compiled?
The primary role I have is to effectively analyze and assess the prospects for publicly-traded companies—in this case, the Boyd Group. This survey is a way to collect some proprietary insight into the industry and try to understand some of the key trends and issues that might be shaping the sector either positively or negatively.
It’s my job, ultimately, to try and understand the prospects for Boyd going forward. To do that, there’s not really a lot of great data to give insight into the key issues that we tried to dig into. So, what we decided to do is collect our own set of data to try and understand how some of these issues are shaping the sector. The survey goes out once per quarter, to a broad list of shop owners that are predominantly independent shop operators. It’s 10–12 questions that ultimately provide [insight] about what keeps them up at night.
And we try to be transparent about this stuff. We’re not trying to keep it all to ourselves.
What, in your opinion, were the most eye-opening data points from this survey?
The way to think about this simplistically: Sixty percent of survey respondents said the issue was the same as last quarter. So, we’re not trying to sugarcoat a difficult issue. It’s still one of the most significant challenges facing the independent owner-operators.
But, if you look at it relative to the third quarter of 2018, it has improved modestly. Ten percent less respondents think the issue is worsening. It’s a small, upward trajectory. It’s still a very serious issue for the industry, but it is, perhaps, stabilizing.
You’ve studied these surveys for a while now; why do you think there was some encouraging feedback this quarter?
We ask, “What actions are you taking to address the [technician] shortage?” And we get a sense of what people are doing there. A lot of it has to do with different tactics that companies are taking. We talk to Boyd and some of the larger companies about this on a regular basis. A lot of the industry is now effectively being forced to spend more time and capital, frankly, on training and recruitment and development. Those initiatives have been in place now for the larger players for, effectively, a year now. I suspect the rest of the industry is responding in kind.
The “training and career planning” [approach] is demonstrably the most prominently used—roughly 55 percent of respondents are using that approach. Thirty-six percent of respondents are using better pay, 32 percent are using enhanced benefits. So, it’s mostly the training and the career opportunity path, trying to map those out for people is the most prominently used. That gives you a flavor for what strategy [respondents] are using to address the issue.