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Are Insurance Carriers Going to ‘Total’ Our Collision Centers?

Lately, industry “experts” are justifiably focused on the long-overdue overhaul of attracting young people to collision recruitment and training programs. However, I have not seen such a feverish discussion to save the precious techs we already have.

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Joe Henry is the owner for ACT Auto Truck Tire Collision Staffing

Lately, industry “experts” are justifiably focused on the long-overdue overhaul of attracting young people to collision recruitment and training programs. However, I have not seen such a feverish discussion to save the precious techs we already have.

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In my opinion, to understand what is happening today, use a split screen. On one side, you have the young people who have less interest in our trade than a free trip to Chernobyl. The other side of the screen is occupied by the existing talented experts, who are able to handle the massive tasks required of today’s collision work, packing up their boxes on a truck and moving on to other ways of making a living. 

Unlike many collision centers, my business does not hinge on the main culprit of this dilemma: insurance carriers. 

Let me start by introducing you to “ALICE.” No, she is not the owner of the restaurant in the Vietnam protest song. Nor is she my girlfriend or my wife’s girlfriend. ALICE describes most of your crew on the floor: Asset Limited Income Constrained Employed. This new human resource and labor force nomenclature represents the growing number of individuals and families who are working but are unable to afford the basic necessities of housing, food, child care, health care and transportation. In the case of a family of four, this would mean earning less than $60,000 annually.

Let me distill it a little further. Let’s say your team member on the production floor has a spouse or partner who makes $30,000 annually. And your person averages $14.42 an hour during a 40-hour workweek. Guess what? $14.42 X 40 hours X 52 weeks is $30,000 a year = ALICE. 

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Now, let me add caffeine. Take that same employee without a working spouse, now they need to make $29 an hour to survive.

Gary Ledoux’s article in the March 2019 edition of Autobody News quoted many owners saying they were trying to attract newbies with $9 to $12 an hour. So, let’s pretend we are young again. We have binge-watched the Velocity/Motor Trend channel where the image of stench and stigma of a craftsman is gone. (Thank you, Velocity/Motor Trend!) We then see the immaculate shops in the UTI and Lincoln Tech commercials. (More stigma removed!)

So, to further our curiosity, we read the trade school’s online info that we would need a student loan of $30,000 or more to participate in one of these fine, higher learning institutions’ professional degrees. Also, we read we will have to purchase more than $20,000 of tools. All this to perhaps indulge into what we hope is a profession that gives us satisfaction as well as pays all the bills and student loans.

Next, we seek the know-all/see-all pal Google, where we put in “average salary of collision repair technician.” Result? “Collision repair technicians make an average $41,570 per year, or $19.99 per hour.”

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That means a single earner with some good skills and experience — ALICE! Nevermind tool expense and student loan debt. Hell, if I were young, I would apply to COSCO or Amazon or Disney or Apple or Ben & Jerry’s or Walmart, make at least $14 an hour to start and continue to binge-watch “All Girls Garage.”

Further distilling: If our goal is to escape ALICE, we need to make $61,000. That equates to $29.50 an hour. The gap that your DPRs are paying today to support that gross is not a bridge too far, it is a canyon, far and wide.

Conclusion? It’s time to lean in on insurance companies. They must be made aware that keeping their foot on your throat cuts the air off into your gross whereby you are fishing for new employees (and losing good ones) to other industries. Massive efforts nationwide are being taken by railroads, utility companies, oil companies, trucking companies to fill their positions opening up from retiring baby boomers.

How much student loans and tools do these candidates need to apply for these opportunities? Nada! As a matter of fact, most of the above employers offer: sign-on bonus, retirement plans and the opportunity to make $80,000 within a few years.

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If nothing changes in the near future with the choke collar that DPRs have, this story will be “Dog Bites Man.”

I advise your communities to network up as groups. Devise a business plan to submit to insurance companies whereby they ratchet up their rates, so they: pay you more so you can afford to pay your invaluable craftsman above ALICE; co-op with community colleges/tech schools to form an apprentice program; or both.    

Start talking to other dealers today. Otherwise, if we all lack the courage to administer such a solution, this will add up to a “crash-out” almost as dramatic as Brexit. Quality body men and painters will be a thing of the past like Betamax vs. VHS. 

Click here to view more solutions from Joe Henry and ACT Auto Staffing.

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