Thank you. If you are the leader, press star now. You will now be placed into conference. Your conference is being recorded. Your conference is being recorded. Good morning, everybody. My name is Bill Mays, and I am very pleased to welcome you to the webinar today on Heavy Technicians Wanted. We've put mechanics in the title, but I like to use technicians because today they're a lot more technical than they ever would. We're in the past, and that's how I like to refer to them going forward. But how to motivate, attract, find, how are we going to fill this manpower need that we've got in the technical area? So welcome. I'm pleased to be representing AED and the AED Foundation, who are bringing this to you. And we'll be available in their archive later. So if you want to go back and review this recording, you can do this. Like I say, my name's Bill Mays. I'm with Machinery Advisors Consortium. That's a group of independent consultants that work with people in the arena of agriculture and construction equipment management. We work with OEMs, and we work with individual dealers and distributors. So what I want to do today is talk to you about how do we find and attract and retain technicians. Because obviously, that's an issue. Everybody has a problem with that because, frankly, for many years, our education system has not pushed technical education. And we're not going to worry about what the history is. We're going to worry about what are we going to do going forward. We're going to play in the sandbox that we're in and see if we can improve it a little bit. So as we do that, I want to start out with a little story about Abraham Lincoln. And Abraham Lincoln had a lot of quotes. If you go online and try to look up some of his quotes, there's a whole lot of things there. Before I get into it too far, though, I want to mention that if you do want to contact me during this presentation, there's a chat box. We're not going to be live where you can talk to me verbally. But chat box, if you see your chat symbol down there, go ahead and type a message in. I will see the message. And if it's something that I need to address for the group, I'll just do it verbally. If it's something that we need to address individually, we'll either do that in typing, or we'll do that later. So see that chat box? We're not going to be talking, so you don't have to worry about muting your phones or anything like that. And that's the only thing you need to do for this webinar. This webinar is going to take no more than one hour. And if there's no message, no chat that we need to do, it definitely will be no more than one hour. So back to Abraham Lincoln. Abraham Lincoln, like I say, had a lot of quotes. If you ever want to read about an interesting method of management, go read some books on Abraham Lincoln. And you will learn a lot that is very applicable today, especially with emotional intelligence and some things like that. And as I get into this program, you're going to see that that's going to be more important. So the story about Abraham Lincoln is that he was in a contest earlier in his life, because as you know, he was the rail splitter. And he was competing against someone in splitting rails with an ax by hand. And so the idea was in x number of minutes, they were going to see how many rails they could split. So when the bell sounded, his adversary started wailing away at these logs and started creating rails. And Abraham Lincoln sort of sat there with his file or his rock, whatever, his whetstone. And he started or continued sharpening his saw. And he continued sharpening it while this other person was creating a pile of rails. And people started getting worried and saying, hey, what are you going to be doing here? Because you're getting so far behind, this person is really creating a lot of rails. And Abraham Lincoln just continued to sharpen the ax, sharpen the ax, sharpen the ax. And so when he finally got to about 2 thirds of the way through, he finally started splitting rails. And with his sharp ax, he was able to split extremely rapidly compared to what the other person was doing. As that other person's ax started to dull, and as that other person tired out because they were using a dull ax, Abraham Lincoln not only quickly caught up with him, but overtook him. And in the end, won by a fairly significant margin. And so Abraham Lincoln said, give me six hours to chop down a tree or split rails, and I'll spend the first four sharpening my ax. And that's the idea. What we've got to do is we've got to think about how we're going to go about a problem, solving a problem, as opposed to just diving in and doing it. So with that in mind, let's establish where we are right now. Right now, there's a lack of technicians in our industry. We're having to compete for the technicians that are there. There's not a lot of people being attracted into the industry. But this lack of technicians means lost business for you guys. And a 2015 study from AED and the National Bureau of Labor Statistics has said that the equipment distribution industry loses about $2.4 billion a year as a result of your inability to find and retain technically skilled workers. And the way they did this, you can look at the graphic at the bottom. They took the number of jobs available and compared that to the number of employees that existed and then made that be the total number and then divided that into the number of jobs available. And they got this rate. And so when they turned that into dollars, it said it was $2.4 billion that they are losing, that you guys are losing. You know that. You know that you have a problem. But it's interesting to see how large that problem really is. It's something that we can't continue to just let go by and not specifically address. So that's back to my Abe Lincoln. What are we going to do? How are we going to think about that? And what are our plans? If you look at this, the studies, and you look at the technicians by industry, going to the construction and heavy equipment, and then truck and diesel, farm equipment, outdoor power, and then automotive, you can see the employment in 2015. And I've got the 2017 study just came out. I'll be able to update these. But it shows that this is continuing to be the case. You can see there are hundreds of thousands of jobs. But we're expected to grow, in our industry, construction heavy equipment 5%, truck and diesel 12%. So the average wages per hour then, too, just looking at this as a wage issue. And it's not just a wage issue, by the way. But what are the wages? $24.08 was the average wage per hour in the industry in 2015. And the top 75% quartile was $28.50. The next slide, I'll go into what that is. But looking at this, 24 and 28, I know some of you are going, wow, I wish I could only pay that much. That would be great. So you can look at this slide. And this is taking that information. The average is there where the top of the bell curve is. But as you see, that bell curve isn't even on both sides. So as you come down the right side, the quartile numbers, the Q1, Q2, Q3, where it's 25% in each of the quartiles, that's based on the actual number of respondents that are in each of those quartiles, not based on the wage. So you can see that there are fewer people above the average than there are below the average. And if you get down in that Q4, which is the right side of Q3 onto the end, that tail gets fairly flat. So that does mean there are some of you out there that are paying significantly more than the average, but not very many of you. By and large, the average wage is being paid by more than half of you, or right at the average wage. So do we have a wage problem? Probably. We probably have a bit of a wage problem in that we've got to compare it to what the available wages are. But at the other hand, when we start talking about lifetime earnings, we don't have a wage problem necessarily because you start looking at what's your starting wage in our industry compared to starting wages in other industries and your ability to increase it. We stack up very well in lifetime earnings. So we have not done a good job of selling ourselves and selling our industry to the young people that we want to attract into this industry. So how many technicians do you need? If you're going to go out and say, well, I just need technicians, well, not all of you have told me. I do a lot of this training, and not all of you have told me that you need technicians. You've told me they're hard to find. But when I look at how many of you are out there actually looking for them, I'd say it's less than half of you right now. Every one of you will say, yeah, I'm looking for technicians. But when I say, what are you doing? Well, we've got the job posted. That's not really looking for technicians. That is saying, if a technician falls out of the sky, I will hire them. So how do we know how many technicians we need? There are a number of ways to do it. But for this presentation, I don't want to spend the whole hour just talking about how many you need, because I think we identified that, by and large, we need them. And the people that are on this call recognize that. So the first way and the only way I'm going to really talk about today is, what is my service revenue? What do I want to grow it to? What is it now? What do I want it to be? Because obviously, what am I selling? I'm selling time. And so if I'm selling time, and I've got to hire technicians to do that, the first thing I want you to do is look at it and say, do I need to add technicians to sell more time? Or do I have an issue with my service productivity? So the issue is, raise my service productivity or add technicians. And part of that then can get into, obviously, my physical plant. Maybe I'm limited in the space that I've got, the number of bays that I've got, the ability, my yard size, where I'm located in the town. A lot of us are in areas that are industrialized, and we can't, we're landlocked. We can't really add to it. So we've got some challenges in manipulating our space so that we can put more work to it. And there's a lot of things we can do there to make sure that we can handle more work besides just add technicians. So do we have leaks in the boat? We've got to look at that first before we really jump into how many technicians do we need. Let me give you this little graph here. And this is something that shows the difference in your wage multiple and your recovery rate. Your wage multiple is the difference between your charge-out rate and your labor rate, your wage rate, what you're paying versus what you're charging out to customers. And then that is combined with your revenue recovery, which is how many hours did I buy from my technicians in the form of salary? And then how many hours am I actually selling that go on to work orders? That's my recovery rate. As you can see here, I've got a sample that says five technicians and my recovery, my wage multiple, and my hours. I've got another slide here. So you can see my revenue is my five technicians times my charge-out rate times the number of hours that I actually sold, 1,768. Obviously, there's 2,080 hours in a year. That is 52 weeks at 40 hours a week, not counting for vacations, not counting for overtime, but just basically 2,080. If you can sell 85% of those, you sell 1,768. And if your rate is 105, you're going to create sales of $928,200. Your cost of sales, if you remember your finance and your income statement, you have sales minus cost of sales is your gross margin. And my cost of sales is my cost of my technician salaries, because that's what I'm selling. So you take the cost of those five technicians. And if you're paying them $30 an hour, and this would be without benefits, because benefits are considered an expense. So this $30 is the wage rate. And you multiply that times the hours that you actually buy from them every year, which is the $2,000. You get a cost of $312,000. So you take the difference, $928,000 minus $312,000 gives me a gross margin or gross profit of $616,200. Divide that back into the $928,000, and it gives me a gross margin percentage of 66%. My gross margin benchmark that I like to talk about is 65% to 70%. I think dealers should be, in this industry, producing a gross margin between 65% and 70%. My wage multiplier is part of this equation. And that is, what kind of multiple do I put on my wage rate? In this case, the $30 goes to $105. That's a 3 and 1 half times wage multiple. If I take that to four times, obviously, I'm going to get more earnings, more revenue, because I'm going to have a higher. If I raise it, if I produce a higher wage multiple by raising my rate, then I'm going to get more sales. On the revenue recovery, once it gets on a work order, how good am I at billing it out and not writing it off? Now, in this case, I'm not going to get into the details here. I am probably taking this 15%, and that goes into my benefit hours, which would be my vacations, my sick leave, my other off-site training, things like that. Off-site training, things like that, where the person's not available. That will consume about 15% of my hours. So right there gets this to all the hours that I can sell. But you can see how the two will interact with one another, then to create this gross margin. So do I need to add technicians, or do I need to fix another problem in my service department before I worry about it? Probably both. But going back, my service contribution, that is what percent of my sales at the dealership come from the service department? It should be about 10% of my total dealership sales. When you take the whole goods sales, the parts sales, the service sales, and the rental sales, service sales should contribute about 10%. If they don't, then you've got an opportunity. So you can see I've got the opportunity box checked. What's my billing efficiency? That is that revenue recovery. Now, if I take the benefit hours out, which is that first 15%, and I start with that 1,768 hours as my base hours that I can sell, I should produce, I should get 95% to 100% of those. Really, I should be able to get 100% of those invoiced. So if I'm not at 95%, I've got a problem. I've got a billing problem to fix, not an opportunity. You see, not all problems are opportunities the way I'm looking at it. An opportunity is something I can do to actually take advantage of a situation. A problem that I need to fix is literally that. It's something that I need to address in my system. So my billing efficiency is down. Why am I losing hours? Why am I writing off hours? Where are those hours going? Number three is my retail sales percentage, below 70%. What this says is my service sales should be 70% at retail, going to retail customers. More or less, 20% should be going to internal sales, and 10% going to warranty sales. So if I'm not getting 70% or more to retail customers, then I've got an opportunity, a marketing opportunity. I need to go out and find out where these are or what I can do to get more customer business. Is my shop application rate at least 85%? This is when I'm looking at the hours that I'm putting on work orders. How many hours do you all have monthly work orders or expense work orders? These are work orders where the person didn't have anything to do and so you just said go work on maintaining the trucks, the vehicles, the plant, whatever, and so you created a monthly work order and you put them on there. An applied hour is an hour that went on a retail work order, which is either customer, internal or warranty work. If you're not getting 85% on retail work, then you've got an issue there and for whatever reason you're not getting enough customer business. Going back to it, has your shop repaired or inspected 80% of the new machines sold in the last 10 years? If not, that's an opportunity. Am I back on? Someone send me a message if you can hear me. I'm going to send you one. Okay. Continuing. I got a message that I lost sound. Have we inspected 80% of our machines in the last 10 years? Most of you have not. Most of you have no idea where they are for the last 10 years. This is something that we need to do. We need to know that. We need to get a list of those and that's your CRM. It's not this webinar, but it's something that needs to be done. How many ticks could you lose in the next three years due to retirement or turnover? You should plan on losing 10 to 15% at a minimum. What are you doing to replace those? Even if you think you don't need one right now, you do because people find other careers, people move, people change, people whatever. How am I going to change this then? I'm looking at my first thing, the application, and that is my hours assigned to work orders that are revenue work orders versus my hours paid. If it's below 85%, that's my job as a service manager. I need to find more work. If I look at the efficiency side, that's my hours billed compared to my hours assigned, which is those assigned to work orders that are revenue work orders. Those should all be getting to an invoice and if they're not, I've got an efficiency side, what's happening there, why am I writing off the hours? I don't need to spend any more time on that, but you need to review this because most of you, if you've got 10 technicians, I will tell you when I'm looking at this and I'm looking at 85% efficiency, you've got one and a half technicians on your payroll that you're paying right now that are, if I put it for no better way of saying it, they're dead weight. You're paying one and a half technicians right now that you're getting no benefit from and you need to get more work in or get your shop in order as far as efficiency. You look like you're busy right now, but the bottom line is if you do an analysis, you've probably got one and a half to two technicians out of every 10 that are actual, you just got your efficiency addressed. How many do I add? I'm not going to go into it in detail here, but I'll show you there's different ways to do it. A, B, C, and D here, I say service contribution, the number of techs is the number of percent of your total people, your machine population, or your number of new sales. These are four different ways to do it. I think you just need to look at what am I wanting to do in sales to see where am I needing to go and that incremental is what I need to be looking at. You look at that, what I want to do is say how many of those, what do I want my sales to be? What are my sales now and what do I want them to be? Because the difference is I'm either going to have to find those hours that I'm going to be selling because you can take the hours and turn them back into dollars. Let's look at it here and say on this spreadsheet right now at 9%, I'm doing a million eight in service labor, but my target is to grow that 9% to 12.5% of $20 million which is my total dealership. I'm going to grow that $2.5 million to $2.5 million, that gives me a $700,000 gap in service sales revenue. Well, that $700,000, you divide that by $185,000 per technician, says I need 3.8 more technicians right now if I'm going to hit that sales goal that I have either been given or have given myself. So where that's coming from is 2,000 hours a year, 768 hours if you're doing 85% times $100 an hour is $176,000 a year. So as your billing rate goes above $100 an hour and you stay at the 85%, you're obviously going to raise that to $185,000 or $200,000 of sales per year per tech. So it's very easy to say I need 1, 2, 3, or 4 more techs. You all need to do that just to identify your issue. Where are you now? Where do you want to be? Divide that by $185,000 and then add 1 or 2 depending on your size of shop to say how many am I going to have to make up that leave me. And that's going to give you your number of techs that you need to be putting on board to meet your goals. And so that would be this essentially now the numbers that you have now, how many you've got to lose, how many you've got to go for some other reason, how many you've got to change position, multiple times the probability, and then how many I'm going to have to hire just to stay even. You need to do that just so you understand what your size of your issue is. Now let's look at wage rates. This goes back a couple of years to my Cost of Doing Business study and the Bureau of Labor Statistics, but you can see that these wage rates do vary as you go across the country in various areas. This is all available to you from the Bureau of Labor Statistics, but you're going to be looking at this. You see the top areas go to about $80,000 in this study. But you can see those dark blue areas, while they're heavier in the eastern seaboard, we've also got them in other areas, particularly where we've got mining or petroleum or other things like that. Now I'm telling you what you already know, but occasionally you need to look at this and see what are the wage rates, the prevailing wage rates that I've got to compete with. If you can't match that wage rate, what can you do? What can you do? And to some degree, as we look at our charge-out rate and our wage rate, we need to be able to maybe justify paying a little bit more and managing our gross margin, which is why I showed you that, because you need to evaluate your wage rates to make sure you're at least competitive enough to be able to compete in your market against the other equipment distributors. You can't always go against the contractors head-on-head, and you can't go against the other contractors, particularly the petroleum guys, because they will pay outlandish sums to get people. But, as I'm going to talk about in a little bit, there's things that you can offer that they can't. Better working conditions, less volatility, less likelihood of being laid off in a downturn. Everyone who's been around very long knows that these minerals, commodity markets, have boom and bust, and that's a real issue. So if they want a lifetime profession that can not only go through being a technician, but as they get too old or their body wears out, they may want to move into management, move into other areas, this is a great career path that you should be selling as you talk to potential candidates. So let's talk about some of those ways that you attract technicians as we're trying to attract them. Not only from the new market, the millennials, and the millennials, by the way, are not the newest generation. We've now got the Gen Zers that are coming in, they're 18 years old now, and so we're going to see them starting to enter the wage force right now. They're going to be the newest kids, I'll call them kids just because of the age they are, but the young men and women that are in the wage force, and when I say young men and women, understand that going forward, you're going to be looking at the capability of the individual, and sex is not an issue. You need to be looking at their brain and their ability and their desire to learn, their desire to grow, and a desire to work, because that is what's going to drive the technician of the future. We've already seen the change from what I say, the mechanic, I mean, someone in a meeting this week used the term monkey wrench, and that's going way back when. Way back when, we don't use those tools anymore. We use computers. We use our brain. We know as much now as technicians as the engineers did in years past. We've got to know that. So as we get into the career path, think about how you're going to attract these people. One thing you've got to have is you need to have a formal process for advancement. As these new people come into the marketplace, and I'm talking millennials now, right now the millennials are between 18 and 35, 36 years old. So the millennials, some of you listening now are millennials. The millennials are now the managers. They are the up-and-coming managers that are taking over the service departments from the baby boomers and the tweeners. So you all are the new workforce and the current new management force. So you've got to use what you know about your own generation to grow the attractiveness of this industry for these people, for these future techs. Have a formal process. Talk about advancement when you're trying to attract the candidates that you want to attract. Have a compensation structure and have defined levels, and I'm going to go into this in a little bit. Have a range within each level so that you can say, here's how you advance in pay, because one thing that these people are going to want to know is, how much can I make and how fast can I get there? They always want to ask for a raise, and we don't do raises based on time. We do raises based on what you can do and what you can make for me. So show what it takes. I just lost sound for a second. I'm coming back. Show what it takes to move from one level to another. And the advancement is based on the ability, not on the time and the job. So let's talk about the training program. Have a formal training program. Make sure that it's specific to each technician. We'll talk about what you need to put in your training program, but include outside seminars. Include your own training. Include a mentor. Include things that you're going to do to train these people to move to the next level, because I'm not talking a lot about going to the industrial tech schools. You're all doing that right now. If you're not, you should be, working with them to attract their best and brightest, and the way you do that, obviously, is you become an advisor at one or two of those tech schools, the tech colleges, private or public. I like the public ones real well, because, well, I just like the kind of candidates that I'm getting out of them, but there are some very good private ones, too, that you need to talk about. And you can do things like providing them with components to look at, to build, to rebuild, things that we scrap for warranty, work with the OE to not scrap the parts, but give them to a technical college, work with them on the agenda, work with them, tell them what we need to know, not just the formal stuff, but wouldn't it be nice if you had people that came out of those schools knowing how to remove a rusty bolt, knowing how to take some of the tips and tricks that you know, how to install and remove a bearing without destroying it, how to get O-rings seated without creating leaks or cutting your O-rings. Those are things they don't even bother to teach, but are going to create a real time saver in the actual world. So work with them. But at the end, you've still got to have a training program of your own. So when they come to the dealership, you can then finish them. They come to you as just the first, not just finished, but develop them. It's a shared responsibility, and you need to have some time for completion of that, and you're going to have to walk them through it. So what if they're going to make it part of their own responsibility? You need to explain to them that they're not trained, and you're going to offer them training opportunities, whether it be outside time to go to a training school that you're going to make available to them, or whether it be inside seminars, or whether it be self-study online. You've got to have a plan for that so they understand that they've got a responsibility on their own time to work after hours to develop themselves, that this is something that they should be doing. But then you can provide them resources like operator's manuals and technical manuals. The technical manuals are great because everybody's technical manual has a general section at the beginning that talks about the machine, how it's designed, how it's put together, what kind of systems it has in it. The operator's manuals are wonderful, again, for how to use the machine, the controls, what's there. Our technicians need to know these general things about the machines just to be able to start them, put them through their paces, be able to do diagnostics on them. Without being great technicians, there's a lot of general information that they need to know. As you get into starting them in your rental department, they're going to be doing low-task, low-information kind of things, low-skill kind of tasks, but they still need to know things about the machine. This is how they can get this on their own. Parts manuals are a great source. They need to learn how to read those, need to know how to look up parts, need to learn how to identify serial number breaks, need to learn how to see how systems are put together. The explosions, the blow-up documents in parts manuals are great learning tools. Read your tech bulletins, show them the tech library. This talks about changes in the machines and why the changes were made. Warranty bulletins, the same way. Why were things done? Why did we change things? Products improvement programs, which is how are things done after it goes out of warranty? Did the manufacturer have to change something and why? Online courses. AED offers online courses. Go into the foundation. Use their online technical courses. Other associations or other schools offer online courses, and you can make those available to your technicians as part of their development, and as they do that, make sure they look at the different training areas, the technical areas. You might want to specialize them as they come along in certain areas first so that you get people that have skill in all of the areas, meaning you've got a group or two that have engine and transmission, another group that are hydraulic and electrical, and at the end of the day, you're going to have everybody trained on everything, but that can't happen all at once. So you need to go through these individual areas and make sure that you've got someone coming up to speed on all of these areas that I'm putting up now, the engines, the transmissions, hydraulics, electrical, machine components, location and ID, where are the components, customer service skills, gosh, do we need more of that, especially in our field technicians, so that we know what to say and what not to say. Operational features and characteristics. How to identify parts failures. What happened here? What can we do to make sure that it doesn't happen again? And that's just to get the warranty claim through. this, this is a basic outline for you to use for developing your own training program. You need to put them on a probation, a probationary period. The probationary period usually is three months or 60 working days, depending on, you know, three months and 60 working days. This is a period that typically you can discharge a person without going into a lot of cause. This just says they did not perform as presented. It's a chance for you to say, are they really who they say they are? Because people come in, especially people that are not just out of school, people that are coming from another area or another dealership, claiming to have lots of ability, lots of experience, and you don't really know what you're hiring. You can do a better job of interviewing, but at the end of the day, some people interview extremely well, but aren't really good when you put a tool in their hands. So you want to give these people a chance to work alongside an experienced tech and work in each of those 12 areas so that you can give them some ability to learn it, but you can also assess their talent in each of those 12 areas during this probationary period. You want to make sure that you're conducting weekly progress evaluations. You want to put them with a mentor, and the mentor is not the manager. So if you're the manager, you don't want to be their mentor. The mentor is someone that can help them get along in the dealership or the distributorship with things that just generally how to get along, who does what, how to work here, how to, questions that they don't want to ask you. They don't want to look dumb in front of the boss, so this gives them a safe place to go. This also gives them someone that can call out and point out things to them and say, hey, this is something that you need to watch, this is something that you need to be aware of. They need to have a mentor that's not going to be giving them a formal review. So it's someone that is a safe person to go and coach them. You need to let them help out the other techs. Give them simple tasks to start with, especially in the rental department, setting up, checking in, checking out, doing maintenance, performing simple work. And then what you need to do is make sure that you have a pay structure along with your career path. This is a simple pay structure that we use to start the conversation when we're working with dealers on their pay plans. The first thing you want to do is establish different technician levels, starting here at the bottom with a trainee, and then a C-level tech, a B-level tech, and an A-level or master technician. You'll have a defined pay scale, in this case, starting at $15 an hour, then going to $70 to $20, $22 to $26, $28 to $32, although there can be overlap in the pay scales, so that person can move up and have some ability to get into the next range of pay if they are showing talent, but they really haven't done what it takes to get all the skill set. So that gets to be a little bit of the art of giving pay raises as opposed to the science. This where the skill set then comes in, the one at the bottom level, that's your basic knowledge of the systems. Can you read your technical diagrams, and do you know how to use your tools, and can you disassemble and reassemble, basically, but your diagnostics are low. Then as you get into this, you'll have a level 2, a level 3 and 4, a level 5 and above skill set. And so as you define the skill sets, this is done by testing, this is done by defining the courses that they need to go to to get these qualified for the skill set. And so the level 2 skills are defined, and so you have to not only go to the course, be able to pass the test. And so you can go to the course and pass the test for a level 2 technician, and that becomes a level 2 skill, that's what you need to be a level C technician. As you get up to the 3 and 4 level skill sets, you can be a B technician, and once you can pass all the tests for a level 5, you can become an A level tech, but you don't necessarily get the wage. When you get the wage, not only can you pass the test, but you can show on the shop floor or in the truck that you can perform this at a level that you can bill those hours out. That's my productivity. That says at the trainee level, I also have to be able to bill out 75% of my hours that I'm paid. If I can't bill out 75%, I can't move up. At 80%, I can be a C level tech. Once I can bill out 85% of my hours and be able to do the level 1, 2, 3, and 4 skill sets, I can get the B level pay. And once I can get 95% of my hours billed and be able to do all the skill sets in all of the levels, then I can qualify to be at that pay scale. That's how you define a plan for the individuals so they see it's not how long you've been here, it's what can I do, what do I know, and then how productive am I? Can I actually produce this? And that gives them a plan. So you'll typically not give them the raise midterm, you'll give them the raises as they progress and then you'll evaluate them on an annual basis. But then at that annual basis, then you can define what they can earn and you can give them a fairly significant pay raise if they qualify at that level and it pays for itself because you're also billing out those hours. And so it doesn't matter just getting a 25 or 50 cent an hour raise and we limited that, you can give a larger raise if a person justifies it by generating income. And you don't need an incentive plan to do this. One of the ways that people do this is they'll pay an incentive plan. This one's not relying on an incentive plan. Then when you get into this, you can have an internal development plan that sets objective milestones for advancement for your individuals. So when you sit down with them and have their annual review, you can define what it's going to take to get them to the next level and then create that plan. What tests are they going to take, what courses are they going to go to, what are they going to do on their own, and then what are they doing as far as their bill out rate right now so they can see what they need to do and they can earn their way to it. It's visible. It's not just theoretical and subjective. They can earn it and they can learn what it takes. What that does is it also establishes criteria for you to use externally when you're talking about hiring criteria and you're wanting to match your pay to performance. So when someone comes in and says, what am I going to get paid here, I need X dollars. They say, well, here's how we pay and here's how you can justify that salary or that compensation. So now we have them on board. What we've got to do is we've got to make sure that we keep them on board and that is we've got to make sure we have the ability to coach them. So what is coaching? What coaching is is a nonthreatening manner of allowing a person to grow, to see what they're doing right and to see what they need to improve on. Notice I said see what they need to improve on, not what they're doing wrong. Because as we start pointing out what you're doing wrong and why did you do it this way and not that way and why didn't you do what I told you, all you're going to do is run people off, especially millennials, but everybody. Nobody wants to be told what you're doing wrong. Nobody wants to be told what they're doing right. But everybody needs to know if they're not doing it right that they need to do it in a certain way. So this is coaching. It allows people to grow individually in both the responsibility and in their contribution. What it does is it's based on an analysis of performance discrepancies, not just attitude, but how are they performing back to those chargeout rates, the billout rates. What you can do then is you can separate their problems, their performance problems from dealership problems to individual problems. So is it something that was caused by the dealership, lack of tools, lack of time, lack of instructions, lack of space, lack of workflow, interruptions, something that we should be controlling as a manager or is it based on something they don't do well, either lack of knowledge or lack of desire? Those are their problems and they need to address those. And coaching's for all of your employees. It's not just for the ones that need help. You need to do it with all the employees because the good employees, the ones that are really knocking out of the park, need to know what they need to do to even do better, but they also need to know it. They need to know that they're knocking out of the park and they need to know, they need to have that positive reinforcement. So it's something that you need to do. I know we've all said, I told you that you're doing a good job last year in your review. Why do you need to hear it again every day? Do I need to pat you on the back? And the answer is, yeah, you do. Yeah, you do. That's the world we live in, but it's the world we've lived in for a long time. We just had employees in the baby boomer generation that were taught not to expect it, but they still responded to it and they still will respond to it. So you bear the responsibility for the success or failure of all of your employees. And that means the ones that are having problems and maybe have an attitude problem, you need to work with them to identify that and what is in the way. Give them an opportunity to grow past that attitude problem. At the end of the day, you need to get rid of a cancer. If someone does have an attitude problem and they're not going to get on board, they need to be let go. But at the same time, there are people that just don't know or just need to have a wake-up call. And you have the responsibility to give them that wake-up call in a positive means and say, listen, you know, the customer, the real customer here is the one that we concentrate on. And if there's problems people have given you inside the organization or something else that's causing you not to be able to do the job the way you want to do it and the way you need to do it, let me know and I will see if I can't handle that for you. Otherwise, you need to do that and get on board. So you need to do that. If it's lack of proper equipment or financial resources, it's your job to address that. And it needs to be a two-way conversation. It needs to have you need to have an open mind. They need to have an open mind saying we are here to talk to each other about the job and the performance and the expectations that we have of each other and let's operate openly and honestly and let's do it this way. That is the essence of coaching. And you only want to deal with them with performance discrepancies that relate to them. If they have issues, you need to identify those, but don't hold those against them. So once we've talked about that and we've coached them, how are we going to retain them? Well, back to coaching skills. Coaching skills include listening, questioning, clarifying, and reflecting. These are several things that we have to do that address our ability to communicate and coach our people to make sure that they are getting the maximum help that they can get. Are we listening to them? When we are talking to them, are we giving them an opportunity to speak? And when they're speaking, are we watching their mouth move or are we truly listening and have a very thick skin so that if they're saying something, we don't just automatically jump in and say, hey, that's not the issue here or say, well, that's irrelevant. It may be relevant, and if they're bringing it up, it needs to be addressed. So listen with an open mind. Question. Before you jump in and offer a solution, ask questions. I teach this when I'm selling. When a customer brings up an objection, they're asking for more information. So before you jump on the objection and give your solution, make sure you really understand the objection. It works the same when you're coaching people. What are the questions? Ask questions. Find out what the real issue is so that you then address the real issue, not what the first symptom is. Clarify. That is a questioning technique where you want to get to the bottom of things. Make sure you address the real issue, clarify the situation, and then clarify what you're expecting to and what you're offering them as tools and opportunities. And then reflect. Reflect after the fact. Ask them to reflect on their performance, their behavior. Ask them to think about that and then come back to you later. You reflect on your ability to be a good coach, to be a good mentor. You reflect on your plan and have you given them the opportunity to succeed that you should be giving them. Those are four coaching skills that I want you to write down on your notes right now and make sure that you are doing those. You wear many hats. You have to be a leader. You have to be a teacher. You have to be a decision maker, a motivator, a guide, a mentor, a trainer. Let me go back. I want you to see that list again. And what you've got to do is make sure that you're wearing the appropriate hat at the appropriate time. And when you turn around, there's someone else standing behind you or your boss is there or someone else. You've got to make sure that you can pull one hat off and put the other hat on. Change your approach as you're dealing with people. This could be a three-day seminar. In fact, it is a three-day seminar. And how do you read people? How do you change your ability to address different people in different matters to make sure that you get the desires, the behavior and performance that you need and that you want? Principles of coaching. There's some things that you can't violate. You have to reinforce if you're going to be a good coach. You have to do it in confidentiality. What you tell them is between you and them as a coach. Now, if it is a formal write-up for some kind of behavior issue or something else that goes in their plan, that's a different situation. I'm talking coaching. This is where you're having one-on-one conversations that are designed to help them. It's non-threatening helping situations. So it has to be done in confidentiality. And they can't hear from someone else something that they talked to you about or that you will lose that trust. That builds trust. And you've got to have trust back and forth so that you can actually work with them. It's got to be non-judgmental and non-critical. You've got to have a belief in their capacity to learn, develop, and change. If you don't believe that, then you're not truly coaching them. Like I say, at the end of the day, if they don't perform, you owe it to the rest of the people in your organization and to yourself and to your boss to let them go. But you've got to believe that they want to change and give them opportunity first. You've got to recognize their strengths, and you've got to build and maintain their self-confidence and their self-esteem. That means pointing out things they do right, rewarding them with praise more than anything else, pass on the bag in private and in public when they do things right. You want to challenge them. You want to challenge them to get out of their comfort zone, do more, be more willing to take on the new task, and then reward them. Don't criticize them if they take on a new task and don't do it the way they need to do it. Coach them. Believe that there are always solutions to issues, always solutions, and then break down the big challenges into manageable steps. If you have something that's important to do, make sure you break it down into manageable steps. So, leading versus managing. When you get into that, this is, again, the concept. You need to both be a leader and a manager. Leadership, let me go through this. I've got these slides kind of jumbled up on this one. I just want to walk through it a little bit. Leadership is doing the right things. It's planning. I'm going to jump through where I can get both of them. It's planning. It's workflow. It's seeing how we do things here. It's making sure the processes are done right. It's that time that you don't have to do things but need to do them. It's that 30% of the time that Stephen Covey says you should be spending time making it better for everybody. Managing is doing things right. That is helping people do things efficiently, making sure they've got the right tools, making sure they've got the right training, making sure that you give it to the right person, making sure you show them how to do it. So, you've got to be both a leader and a manager. And as you look into some of the training courses, you will learn, you'll see this diagram more and more as you do that. But just as a quick example, in fact, it's in a PDF in the handout section. As we get into the webinar, it was just pointed out to me, there'll be a handout section, this is in there. An example of this is deciding what needs to be done. As a leadership activity and you're planning your workflow, leading is developing the vision, where do I want to go? What do I want this business to be? What am I going to need to do to get it there? A management activity is planning and budgeting, who am I going to hire? How am I going to...what's it going to cost? Think about developing my capacity, which is what we're doing right now. Leading is aligning my people, making sure my people know what they're supposed to do, making sure I've got people that are skilled in the different areas I need. Managing is organizing the work and in staffing, making sure that I have specific people to do specific ideas or specific tasks. How about just getting the work done? Leading is motivating people, inspiring people, being a leader, showing the ability to get out and participate, not just sit back and be a boss and say, you need to do this, but getting involved, rolling up your sleeve and leading by doing. Managing is controlling and problem-solving. You still need to do that. This is something they're saying, okay, what happened here? What went wrong? Do I have the right money? So there's both, but that's how you identify, am I leading or am I managing? And I'm willing to take the risk. Leading is something that you need to think about because it doesn't just happen. We get caught in managing because every day we have problems that pop up. We are managing problems. We are managing people. We are managing activities. What we've got to do is we've got to get people skilled and start giving them the opportunity to grow in those areas and maybe take a process and change something that's causing us problems and let them do that as we help them learn to do that and give them the responsibility. That takes a risk for us to do that. So are we willing to take that risk? Finally, do I want to work here? I'm attracting people. So as you can see, one of the things I'm trying to get you to think about is, how do I attract people to want to work here? Do I want to work for me? If they're going to talk to people and everybody tends to know each other in this industry, what kind of reputation do I have as a boss? What kind of reputation do I have? What kind of person am I? Am I supportive or am I just directive? Can I be positive? Can I give pass on the back? And I know that all of us say, why do I have to pat on the back all the time? You don't. You can direct. You can make sure that people are on the right page. But at the same time, think about the good bosses you've had in the past. Think about the bad bosses you've had in the past. Which one do you want to be? And think about being that good boss. Take a candid look at yourself through your candidate's eyes. When they're looking at you, who do they see? Because good technicians have options. They can go anywhere and get a job and probably make as much as they're going to make with you. And first impressions of you and your department are very powerful. So make sure you're looking at your department through their eyes and through your customers' eyes. So when you walk in to the department each day, is it clean? Is it orderly? Does it look like a place you want to look to work? Is it dark and dingy? Is it old? Even an old building can be painted and be brightened up. Take some time. Paint those walls white. Make it look like the place that this customer wants to work. Compare it to a diesel truck shop. Compare it to an automotive shop. Go visit these people. Have some friends and contacts in those industries. And go have lunch with them once in a while. And visit each other at each other's job so you can see, what do they look like there? Go to an ag dealership. Look at what an ag dealership looks like. Go to a John Deere dealership or a Case CNH or New Holland dealership. And look at the difference at what the floors look like, what the workstations look like. These technicians can go to work in a lot of places. Make sure that they want to work for you when they come. We can grow accustomed to clutter. We can get used to stepping over that removed component that we intend to send back and not tripping over it. They don't have to do that. They look at it and they see clutter. Do something about it. Practice networking. That is one of the best places you can hire. Let people know that you're hiring. Let people all the time. And frankly, you're always hiring because you need people. And I can show you a graph that I'm not going to do right now. But essentially, at a 65% gross margin, if you're busy 35% of the time, if you can build out 35% of their hours, you've got them paid for. And so they are not costing to you. If you find someone that you would like to hire but don't have a job for them, hire them anyway if you can keep them busy 35% of the time. Because you don't know about that technician that's either... You know about the one that's going to retire, but you don't know about the one that's about to leave because their family wants them to move across the country or because they've got an offer to go somewhere for more money. So always be hiring. Always be talking to people. Always be networking because they know people. Technicians know other people. They know each other. Make sure that they bring in the people that say, yes, you want to work here. Come over here. Let me introduce you in this place. Be on social media. Have a Facebook presence. Have a LinkedIn presence. These are obviously social networking sites. Have a bonus plan. A bonus plan is where you give someone a stipend, $500 or $1,000, to an existing employee for bringing in a new employee. And you pay it essentially $500 up front when they come in. And then after the person passes the probationary period, your existing employee can get the rest of it. $500 is nothing to pay if you can pick up an employee. All of you should have some kind of program for that. Look at your veterans. Make sure you're working with the veterans associations in your area to see if there's anybody that's getting out of the service and is going to be relocating back to your area. The right person, the right job, don't jump too quickly. So while we need these people, make sure that you look at the background, the interview results, and do you have a job fit? So you want to have all these things be talked about in your interview to make sure that you're getting the right person. Because the job fit is more than just their technical ability. You want to know they can do things, but you've got to know, are they going to fit in with us? Do they have background and work experience? What can they do? What do they interview? Make sure they're interviewing other people, not just you. And then when you're looking at the job fit, make sure that the thing that you've got for them, if they have a lot of potential and you're not going to give them the right task, they're going to be bored and they're going to quit. At the other side, if you've got tasks and you bring them on and they can't do those tasks yet, you're going to be frustrated and they're going to be frustrated and you're going to let them go or they're going to quit. So make sure that you look at the job and make sure they're balanced. And so as you start to grow your people, make sure that as you give them the task, it may be a little bit of a stretch. You identify that for them. Say, this may be a stretch for you, but I'm going to help you get there. We're coming up on our time, and so we're going to sign off in a minute, but I've just got a couple of slides here. Make sure then you've got the right job, the right people, the right tools, the right coaching, and then the right attitude. Because at the end of the day, you want to hire for attitude and train for skills. You can, if they have some basic skills, you can teach them skills. But if they want to work, if they want to be part of a team, if they want to grow and develop, that's more important than anything else that you can do. On board, make sure you've got a program for onboarding. Start right, stay right. That means make them important, make them feel comfortable. They don't know if they can do the job when they come in online. They don't know. They're nervous about that. Make sure you address that. Will they fit in? Make sure you let them know. So your basic steps, begin before they start. Have an area ready for them. Let them know where they're going to be working. If you have a bay for them, have a bay. If they're going to be floating, let them know who they're going to be working with. Make sure all the dealership employees know that you've got a new person come on, you can introduce them around. Have a leader board at the lobby of your dealership. Have their name on it. Make sure you assign a mentor. Make sure that mentor introduces them around to everybody in all the departments. On day one, cover all the essential forms and paperwork. Get that out of the way. Show them the employee manual. This is a, here's where we come to work, ready to work at 8 o'clock or 7.30. Uniform on, showing up, not going to the washroom, but showing up and heading for the bay. Have their employee manual. Let them read that on their first day and on the job. Show them their expectations for the start. Don't cram it all into day one. Give them time to get to the manual and say, here's how we do this. Give them a checklist of their learning program. Take them to lunch that first day with their mentor. Show them that they're responsible for self-directed learning. Show them what their resources are. Go over that schedule, help define that schedule. Make sure the mentor schedules ongoing meetings with them at least once a week. Then what motivates these people? It takes more than money for millennials. They want to feel welcome. They want to feel important. They want to have a clean, safe, productive, and fun place to work. Fun? Yeah, we can have fun. You joke around safely. No practical jokes, but we don't have to be serious all the time, right? With the millennials, every generation had their differences. Right now, we have over 50% of the millennials are in the workforce, and 50% of the workforce is millennials. Actually, 50% of the workforce is millennials, and in 10 years, 75% is going to be millennials, and 75%, almost all of the mid-level managers are going to be millennials. They are seen to have an anti-work attitude, but they don't. They expect to have fun, which is okay. But the paycheck alone is not going to satisfy them. Let me give you a list here of things that they bring to the workforce that are worthwhile for you to know. They network. They know how to work with other people. They know how to communicate. They work with confidence. They don't know they don't know stuff. They're innovative. They're resourceful. They're tech savvy. This is good. They're entrepreneurial. They like doing things that are new and that are growing to grow business. A lot of them want to have their own business. They tend to be enthusiastic and positive. They're adaptable. They know how to use social media, and if we need to have a technical person, they can do that, and they know how to work in groups. That's excellent for us. Make sure you're going to hire them. You got to tell them a story. When you're going to attract them, what does that mean? That means tell them what you want to do, why it's important to work here. What's our brand? How does our brand fit in society? Why does our brand mean something? Why does our dealership mean something? We have about three seconds to set the hook for them. Then what they want to do is they want to amplify our brand. They want to understand who we are and how we can, they want to be proud of who they work for, and what you got to do is understand where they come from. They've been rewarded a lot in their life. Maybe even rewarded for not doing enough, and so they don't think about winning all the time. They think about participating all the time, and so you have to make sure that you use that as you're motivating them. So when you want to be the employer of choice for them, you've got to get them started right. Make sure you have that onboarding process, or you'll lose them right off the bat. Show them they've got a career path. Show them the compensation and progression plan, and show them your incentive pay plan, because that is how they're going to grow. Make sure you communicate your vision, and then show them that they're going to be progress, how to progress, and that they're going to be part of that progress. At the end, in the materials, there's this action plan. I use the SMART plan, which is specific, measurable, actionable, responsible, and have timing on it. As you put a plan together for each of them, make sure you do something in each of these areas. What do you want them to do? How are you going to measure it? What's the action itself, whether it's a course or something? Who's responsible for doing it? It's usually them, but do they need to get help? Who is responsible to help them, and when are they supposed to get it done? Write this plan for everybody that comes on board, and develop that plan, and have the mentor work with them on that plan as they go through this onboarding process. And most of all, when people treat you like they don't care, believe them. That goes for everybody that reports to you. That goes for your millennials, and it goes for your baby boomers. So make sure that people feel like they're part of something. Make sure that they care. Make sure they know that you care. So when you do this, this will help you retain and motivate those people that then you attract. Work with your tech schools, network, network, network. Always be on the social media sites, not yourself, but your HR department. Make sure you're using some of the .coms to attract people. And then once you get a chance to interview them, make sure that they identify you as the place to be. So I thank you very much. We're six minutes over, so I'm going to turn this back over to Liz with AAD. This is Bill Mays signing off. If you want to know more, contact me. They've already paid for it, so my conversations don't cost you anything. You can reach me through machineryadvisors.org, or my number is 913-579-5188. Thank you very much for your time. Liz, I'm turning it back to you. All right, thanks, Bill. Liz, you still there? Yep, I'm here. They can't hear us, right? No, I have my speakers turned all the way up, too, just in case. Okay, I just wanted to just – we went six minutes over. I had just a little bit more in there than I intended, so that's going to still work okay for you, right? Oh, yeah, yeah, yeah. No, that's fine. That's not a problem. Okay, okay. You're just going to get bonus points for that one then. Exactly. Good. I hope that was what you wanted. I think it was great, yeah. That's a tough subject, so as you get input on – I have not gotten input on any of the webinars. Can I get some information as to how many of them that I've done have been seen, and if there has been any – do you get any feedback on them when people take them? Not unless somebody's really unhappy. Okay, well, I'm assuming if someone was really unhappy with what I did, you would have let me know. Absolutely. Okay. The other thing is on the online stuff, I'd like to update, to rerecord that, if nothing else, over the next several months at no charge to you guys. I've learned a lot more about how to do that, and I can give you a little better flowing product if that's okay with you. Okay. You mean the online courses? The online courses. Okay, all right. I like them, but I don't like them. There's always things you can do better as you go back and look at it, but I also don't know how the testing went. On that testing, do you get scores? I do, yeah. So I've been getting scores. I think I told you there's one person who's already passed all four. There's someone else who just took it and did not pass, but they get an extra try, so if there's someone who failed it twice, I can reach out to you and you can take a look. The hard part is that you had adapted that content for the live in-person training, and I know the test is based more on the online, so I expected that there would be a little bit of that, but given that we've had at least one person pass it so far, it's doable. Who passed? Can you tell me? Do you mind telling me who's passed? Tim? Interesting. Tim was already in a meeting with me at Komatsu in Cartersville, because I trained for Komatsu too directly, and he was at a meeting there, and then so I saw him again at this one, so actually it was the second time, but that was only the finance part. He had not had – no, he went to the sales, so he had not seen any of this stuff before. He had not seen any of it before. He failed the first time on branch, because they're all required to take the branch manager, so that's what a lot of them are starting with, and then the other ones are available to them if they want. You realize I didn't teach the branch manager course in this. We had them on parts, service, and rental, and with only a little piece of sales. Yeah, but for online – no, I know you didn't do your branch seminar, but for us, online branch is when you take all of those courses. That's our online branch manager course, so that's what I mean by branch, not the seminar. Yeah. No, I mean, I hope that they would like it. They'd want to go to your branch manager seminar. I just didn't want to set him up for failure with not having seen material that's in the branch seminar. Okay. He didn't pass the first time, but he passed it the second time, and I'm guessing that's probably going to be a lot of them. They won't know what to expect. They'll kind of take the first one. It might not do so well, and then they'll take it again, and they'll do better. So then you'll send them some kind of certification that says you've passed and you're certified now. They get the plaque? They get a plaque, yeah. Good, because Jackie showed them hers to whet the appetite. Yeah, good. They will be expecting their plaque. Will you send that to Jackie, and she'll hand it out? How will that work? I got to ask her how she wants to do it. She needs to suggest that she's hand it out to make a little bit, or Bruce, I think Bruce should hand it out. Yeah, I think it's important that Bruce, even individually, just one at a time, go hand them out. That way, if they do it as a group, I'll suggest it to Bruce. If they do it as a group, then it points out who didn't pass, but if they do it individually, that's kind of an individual conversation that he can have with people, and they can recognize them individually. One last question. On the online courses, can I see the questions that were missed on those and get information on that testing as well? I can check. I don't know if the LMS, if I can do that or not, but I can look into it and let you know. Yeah, I'd sure like to see what the results on the testing are on the online courses as well. Yeah, sure. Okay. Because I may need to redo some questions. And it's been, gosh, it's been over a year now that this is out there. And I haven't looked at it. I haven't seen anything. Although, last comment, when I was teaching finance at Komatsu, because I teach the finance module as well, and so I'm teaching a four-hour finance module at Komatsu, and one of the guys in that meeting goes, well, I took the AED online course, and a lot of this stuff looks familiar, so I didn't completely understand it, but now it really makes sense. But? I said, well, it should. I taught that course. That is this course that I taught it. So that's good to know that someone did take it, got something out of it, but that's the only feedback I've ever gotten. So anyway. All right. Go back and let you have your day. It's really pissed off that I hear about it, so. Fair enough. Fair enough. And congratulate your new boss. Tell him to get in there and make things happen for you. And I will get you a slide deck today for the next seminar. Sounds good. The rental seminar. That's rental. Okay. Talk to you soon. Okay. Thanks. No. All right. Bye. Bye-bye. Okay. Gracias por todo. Gracias. Thank you. Thank you. Thanks for watching! Thank you for watching! I hope you have a good week, and I'll see you in the next one. Thanks for watching. Well, I am. I'm pretty good at spell. You'll get used to it. But it should be a full-on hard novel. So I am. Game. Thank you very much. The conference will be terminated in 5 minutes.

Bill Mays

technicians

mechanics

dealership industry

strategies

attract

retain

technical skills

advancement

compensation structure

training programs

career path

work environment

technician shortage

coaching