Shop Operations: Employee Retention

Jan. 1, 2020
The most recent survey by the I-CAR Education Foundation found that the percentage of shops offering traditional (and often very expensive) benefits has continued to increase. Almost 90 percent offer paid vacations (up from less than 70 percent a dec

My last column included some ideas I’ve picked up over the years for successfully recruiting new employees to the shop. That seemed like an obvious lead-in to another issue many shops struggle with – keeping those employees once you’ve hired them.

The most recent survey by the I-CAR Education Foundation found that the percentage of shops offering traditional (and often very expensive) benefits has continued to increase. Almost 90 percent offer paid vacations (up from less than 70 percent a decade ago), and 70 percent offer health insurance. Almost 50 percent offer some sort of retirement package, double the percentage that offered this benefit in the mid-1990s.

Shops not offering these benefits may find it increasingly difficulty to keep the industry’s top talent. But in talking with other shop owners, we often agree that as expensive as these benefits are, they’re often taken for granted by employees. They may assume they can get such benefits at any shop – and as the Foundation’s survey shows, that’s increasingly true.

That’s why it can be the other types of benefits a shop offers – often at very little cost – that can keep an employee from looking for opportunities elsewhere. Here are some generally low-cost employee benefits that we’ve either offered at our shop or have heard about other shops using to help retain good employees.

What follows are six ideas that should help you with employee retention:

  1. If your shop currently annually offers long-term employees more than two weeks of vacation consider reducing that vacation time by a week and, instead, pay for an actual vacation for the employee and his family. A trip to Disneyland, Las Vegas or a ski area or beach resort may cost you less than a week’s vacation pay – and ensures that the employee actually gets away to relax for that time. This also reduces the amount of time you’re without that employee at the shop. One thing to consider if you offer a paid trip to your employees is that this type of rewardmay be taxable compensation. Check with your accountant about the tax issues with this type of benefit. But don’t let that potential hiccup dissuade you. This type of benefit can help make an employee’s whole family look forward to him or her completing another year with your shop.
  2. We use a corporate credit card that offers points that can be used toward travel on any airline. This free air travel can help reduce the cost of providing the type of vacation mentioned above, or of flying an employee for training that may only be offered outside our area.
  3. My husband and I enjoy season tickets to a local theater group’s productions. I found out that was something one of my long-time employees and his wife also enjoyed. So for a number of years we provided them with season tickets and sometimes took them to dinner prior to the plays. Tickets for athletic events (college or professional) also might be a benefit the sports fans in your shop will enjoy. Also consider purchasing discounted movie tickets through a theater chain to give to employees or to make available at the discounted rate.
  4. There may be some overtime issues with this in your state, but I’ve heard some shops have employees work nine-hour days in order to have every other Friday off. In order to keep things moving, half of the employees are off on one Friday, while the other half is off the following Friday. Having half a crew on Fridays might create some challenges, but the three-day weekends are popular enough that employees will pitch in to cover the bases. And chances are they will be more efficient during the week if they know they’ll be short-staffed on Fridays.
  5. There’s really no reason not to offer employees some sort of assistance with retirement, even if it’s no more than asking your personal financial advisor to offer some lunch-time mini-seminars or free consultations with your employees. And while fees for a traditional 401(k) plan may be a little steep for smaller businesses, a SEP (Simplified Employee Pension) or SIMPLE (Savings Incentive Match Plans for Employees) are relatively easy and inexpensive to set up and maintain. They may even help you reduce your own taxes and save more for your own retirement.
  6. You can’t always pay employees more, but you can help them get more for their money. Work with merchants in your area to provide employees with discounted products and services. Look into business or group membership rates at nearby health clubs, warehouse shopping clubs, or golf courses and sports clubs. Finding a credit union your employees can join may help them get loans, no-fee checking and savings accounts, and direct deposit of payroll checks – and won’t cost you a dime.

Keep in mind as you think about benefits what it is your particular employees will be interested in, and try to tailor the little extras you offer around those interests. It’s certainly not necessary to be the shop that offers the most benefits – just the benefits that mean the most to employees.

About the Author

Camille Eber

Camille Eber has been the second-generation owner of Fix Auto Portland East in Portland, Ore. since 1989. The company, founded in 1946, has earned the I-CAR Gold Class Professionals designation every year since 1991, and won the “Business Integrity Award” presented by the Better Business Bureau of Oregon and Western Washington in 1997.

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