Budgeting for Training
The best shops understand the importance of training; they want to make their technicians, painters, front office staff, managers and leadership better.
But when it comes to planning out a training schedule, there’s one fact John Shoemaker states with confidence:
“I don’t think I’ve encountered a single a shop out there that budgets correctly for training,” he says.
Shoemaker, director of Bowditch Collision Center in Newport News, Va., is certain because he’s worked with his fair share of shops. As the former president of JSE Consulting, he worked with hundreds of shops in not only developing training schedules, but also budgeting for training one, two, or even more years in advance.
“If you’re not expensing throughout the year, suddenly you’ll have lots of training scheduled in a five-week pay month, and that’ll kill you,” he says. “If you budget and have it planned out at the beginning of the year, you’re ready.”
Shoemaker would approve of DeLee Powell’s $4 million-a-year Mansfield, Ohio, shop, Baker’s Collision Repair Specialists, which not only plans out a training schedule for the entire year, but also dedicates a sizable portion of its annual budget to training classes.
“It’s such a return on investment,” she says. “From a business owner’s point of view, you’re decreasing the liability of your shop when people are properly trained in doing good, safe repairs. It saves you money in the long run.”
Both owners have developed a tried-and-true system that spreads training costs out over time and allows for finding cost-effective ways of paying for that training.
Determine a Percentage
Both Powell and Shoemaker suggest 1 percent of the annual budget be set aside for training. Decide what percentage works for your shop, and then make it a goal to fill that percentage with a training schedule.
“Many owners probably think that percentage is way too high,” he says. “But I think you can do it with 1 percent. Next year, if you grow like you want to grow, that 1 percent will be a bigger number. You’re going to have more employees, more sales, and can justify the increased spending.”
Shoemaker suggests taking whatever percentage you decide on and dividing it by 12 to get a more succinct snapshot of how much money is available for training each month. That way, if more or less money is used for training in a given month, you can re-evaluate how much you have in reserve for the following months.
Determine a Required Training Schedule
In order for his employees to retain their I-CAR Platinum and Gold statuses, Shoemaker has to carefully plan out which courses are a necessity in any given period—which means planning as much as five years ahead of time.
Shoemaker says to list all of your employees in a spreadsheet that will be used to track the required amount of time between recertifications and how much each renewal will cost.
“I email I-CAR instructors about which courses I’m going to need, and then they find a way to fit them in,” he says. “If shops create training schedules and know what their people are going to need, and they get to know their I-CAR instructors, it works out beautifully.”
With that schedule dictating what training is absolutely necessary that year, Shoemaker says to then look into other crucial certifications through OEMs and distributors your shop works with.
Keep It Flexible
Like Shoemaker, Powell tracks employees’ required training in a spreadsheet, but also suggests not planning out every single class for the training budget, just in case another employee wants to jump in on a class.
“Recently we had people go through a Ford F-150 class,” she says. “Two techs were scheduled to take that for their I-CAR gold renewal. But we ended up with seven employees in the class after five people volunteered—nearly quadrupling the amount.”
She encourages her employees to volunteer for classes they think will help them do their jobs better. Powell boasts about her staff ’s commitment to training and their certifications on social media, encouraging them to participate even more.
“The cost is hard to swallow, but I know I’ve allocated for it,” she says. “And I know, deep down, we’re going to get one more job because of that. A few extra jobs would make up for it.”
By not completely mapping out the entire year, Powell says you then leave a small portion of your budget for new training opportunities that could arise, such as working with a local technical school or community college.
Seek Discounted Training
As Powell has added departments to her shop over time—mechanical techniciansand glass installers—Baker’s budget for training has increased alongside the shop’s annual revenue. And with those additions has come a unique method of squeezing more training into her 1 percent portion of the budget: not paying for training at all.
Baker’s has received an influx of training from NAPA since establishing its mechanical department. Powell says NAPA finds value in working with one of the only collision departments in the area with a mechanical division.
“On the supplier side, they see more value in having people trained and understanding the process. In turn that creates more sales for them,” she says. “For a while, we were doing monthly training with NAPA that they weren’t even charging us for.”
Powell says seeking out these sorts of partnerships and advertising what is unique about your shop could bring in some discounted (and sometimes free) training.
“They realize our culture involves wanting to understand and continuously improve, so the NAPA trainer will come in the evening, spend a couple hours before a class and help us get the most out of our diagnostics,” she says.
Host In-House Training
Shoemaker advises squeezing the most training out of your budgeted amount by hosting training at your shop. Advertise your facility to surrounding organizations—especially if you have a large conference room or a spacious shop floor.
Because Shoemaker has established such a consistent training schedule with I-CAR, the organization has grown to know his facility’s capabilities and will now approach him to host training classes, allowing his guys to sit in on the classes for free while earning the shop I-CAR credits.
“We are able to bring in all these other guys from other shops, which I-CAR appreciates,” he says. “It also eliminates the costs for lodging and travel. I don’t have to pull three guys out of my body shop all at once. They stay right here.”
Shoemaker also suggests taking advantage of partnerships with vendors and distributors. Offer to cover the travel costs for distributors to fly out and host training classes, which eliminates the need to remove several people from the shop at once and pay for multiple air fares.
Reevalute Each Year
At the beginning of each year, Powell suggests sitting down and evaluating how much money was spent on training the previous year and deciding which classes were worth more than others.
“If we didn’t see the value in some classes, if they weren’t making the shop better, then maybe we can cut them, or find an alternative,” she says.
Powell says re-allocating within the training portion of the budget frees you to redistribute unused portions of that budget to other parts of the overall budget. This year, Powell decided to up her training and equipment purchases and, in turn, decided her radio and television advertising budget wasn’t providing as much value.
“In 2002, we spent our largest amount on training because so many I-CAR recertifications came up at once,” she says. “But it still only constituted 1 percent of the budget. We sat down, we looked over what we needed, and we adjusted other parts of the budget to make it work.”