If you’re a regular reader of this column, you might remember that, a few months ago, I wrote a list of 10 wishes for our industry. Well, this month, I’m not feeling quite as rosy, so, if you’ll bear with me, I’m going to go on a little bit of a rant about a couple of those wishes: one, to see the labor rates increase, and two, to see the industry get the respect it deserves.
There’s a reason those two are still “wishes” and not reality, and the reason for that falls squarely on the shoulders of you and me. That might sound provocative, but I hope that you’ll let this column serve as a mirror as I poke, prod and, hopefully, inspire you to be the genie that makes these two wishes come true for your company.
It goes without saying that raising the labor rate for our industry is long overdue. In fact, I’m reminded of something my mom used to tell me when I was a kid, “wish in one hand and crap in the other and see which one fills faster.” The lesson there? It’s not going to happen without us working at it. If we aren’t asking for a higher labor rate, it will never happen.
Now, if you know me well, you know our shop is not a DRP-driven shop, so you might think that is the reason I can ask for higher labor rates since I don’t have the DRP contracts tying my hands. That’s not the case, though—and it shouldn’t be for you, either. I can tell you I’ve been encouraged by some friends in the industry who have written letters to their DRP companies notifying them that posted rates are going up in their company. Some insurance companies have responded positively to those letters over the years. A DRP contract doesn’t limit your ability to make a request.
Asking questions is the most direct way to get results. Insurance companies are excellent at asking us for things they want. They ask us to accept their labor rate all the time! It’s time to speak up and do some of the asking ourselves. You’d be surprised at the answers you get when you keep asking. Refuse to stop until you get the answer you want; persistence almost always pays off.
You might have noticed that this year has provided the opportunity to discuss claims over the phone with people with whom we’ve never interacted. I’m not really sure why that’s the case, but it seems they’re instructed to just follow the party line of what they're “allowed” to pay for and what they’re told to deny. I have found that an extra few minutes on the phone with these agents can be very profitable. If we refuse to agree to a labor rate and explain why we are asking for a higher rate, we’ve found their response often moves from, “that’s as high as I’m authorized to pay” to, “I guess I can go to ‘X’ this one time.”
Another way to get paid more for the same job is to start billing in dollars. Any new operation we do here—like ADAS calibrations, for instance—we bill in dollars. Why? Because that is what the market is doing. If you send your vehicle to a dealer, they bill you in dollars. If you have a third party do the calibration, they bill you in dollars. Why should we be different and bill in time? I could write for days about why it’s a bad idea to bill in time, but just trust me on this one.
The reason I take that extra few minutes on the phone is that I have a high level of respect for our industry and, specifically, for the tasks our technicians perform every day. Have you ever stopped to think about everything a collision tech is capable of doing compared to other techs in the automotive industry? Here’s just a short list of the things a collision tech can change: oil and filter, brakes, starter, alternator, spark plugs, exhaust, etc. The same insurance companies we deal with pay much higher rates to companies who “only” perform one of those procedures. But our techs can weld quarter panels, blend three stage pearls, and so much more, all of which proves how highly and uniquely skilled they are. Those skills deserve our respect and the labor rate should show that respect.
Sadly, it’s clear that respect from others in the industry, such as insurers, won’t be given and will need to be earned. But we can’t earn that respect until we respect ourselves and our peers I’ll give you a visual to illustrate the importance. Imagine if you were selling a 1963 split window Corvette. You know that vehicle is unique—it was only made that one year—so you’d naturally be offended if someone offered you far lower than market value for that ’63 Vette, right? Why should our techs be any different? We should have the respect for our industry and the teams we’ve assembled. We need to start showing that respect by demanding a fair return for our services.
It’s time that higher labor rates and respect for our industry move from wishes to reality. It starts with me and you, and it should start today.