to start grouping on behalf of the Associated Equivalent Distributors, I'd like to welcome you to today's webinar that's entitled How to Successfully Onboard and Train Service Technicians. This is one of the AED webinars that's developed for your use in terms of helping your parts and service operations kind of just come to that next level. And so the purpose of this today is really twofold. It's one to address the competitive nature in today's marketplace of hiring and retaining the best techs at your dealership. And then we want to also then give you some how to, and that's to identify some of the key aspects of what this actual process, and we're going to recommend a process that you have, what that might look like, and how could we gain a competitive edge. As we know, there's probably not been a more talked about topic at dealerships in the past maybe 10, 20 years as to the glaring need for technicians. Most people talk about that, but there's a lot of dealerships and organizations out there that really haven't put a true plan together. So let's dip into this a little bit more in detail. First of all, I think it'd be a good idea to maybe just sit back and do a bit of a self-assessment of your dealership within your service department. Let's kind of pose some questions out there that have to do with the concept of technician retention. Do you have a turnover problem, and is that possibly what's going on in your dealership? So one of the questions we'd like to pose to you is, if you take some records and you look back over, say, the last three-year period, if you've had to replace greater than 20% of the service technicians within your organization, or maybe it's one specific location that's got an issue, then if that's yes, then there probably is a retention problem. And then we need to do a little bit more of a deeper dive into what that particular problem might be. Here's one issue that might pop up. I would ask you to crunch what your wage multiplier billing ratio is. And that's simply calculated this way. The top number is what your customer labor rate is. That's what you're charging customers out there today. And then the bottom number would be, say, on an average technician wage. So if your wage multiplier billing ratio is substantially greater than 4, then it really does tell us that maybe we are possibly losing technicians because we're not paying them as much. So that's usually the rule of thumb or the key performance indicator there that we need to be at 4 or under on that wage multiplier billing ratio. If not, then people are jumping for, I don't know, maybe $0.50 or $1 more an hour to another competitive service department. And that's one of the issues in terms of why we have a retention problem with our tax. Also, do you specifically have what we call a technician career path? Especially hiring millennials today, most people want to see that they do have a future. And the reality in a dealership organization is that that organizational chart is pretty darn flat. It's not like going to work for maybe one of the manufacturers where there's all kinds of different divisions that they can group people in and so forth. But at the dealership level, it's a pretty flat org chart. And so some folks, I think, may be content to be a technician all their lives, and that would be great. And others may have a bit more of a desire to grow into different jobs and use this as a entry-level position. And so having that conversation with the technician when coming on board to truly lay out what a potential career path might look like so that you can retain those quality techs is something that really could be an opportunity for you to have that meaningful conversation with your technician. I think I've mentioned in some other webinars in the past this year already is that I read an article in a business magazine that said, if you do not make day one special for the new hire, and what that looks like is like Bob comes to work day one. It's like, oh, yeah, Bob, I forgot you were starting today. Yeah, just go in the locker room there. And we've got names on most of the lockers, so pick one that doesn't have a name on it, and that'll be yours if you want. And then just go hang out with the service manager for a bit, and we'll talk to you a little later. Maybe we'll go to lunch. If it's almost an afterthought, and there's all those things that aren't done on day one for that new hire, then there is a 90% chance that that new hire will leave your dealership within 18 months, simply because we really haven't made day one special for them and haven't really welcomed them. All the whining and dining that we do to recruit people that come to our dealership is just lost in all that effort when we drop the ball on day one. So ask yourself, what kinds of things are you doing differently to make day one special for those new hires? There's some great opportunities there. We could have donuts or bagels and coffee and just a quick introduction to everybody. And so we'll talk a little bit more about that in detail. But making day one special for new hires is a really, really great opportunity for us to help with this technician retention piece. Also, a lot of times we hear that from some of the technical schools or some of the lower level techs that we bring on board, that maybe they don't have all the skill set that we would like them to have. And so unless we have an experienced technician start to mentor some of these newbies that are coming in, it's going to take them longer to get up to speed so that we're capturing more of their labor and making more money with that technician. So do you have a mentoring program as well for a new technician? There's a couple of key things to think about there. So yeah, we've got to retain the productive techs. We really want to make sure that we create what we call a solid work environment to both serve the customer and then retain the techs, and also discuss that technician career path and truly be the employer of choice when they look around at all the other opportunities where they could go to work. Also, cost of turnover is another aspect. I think we want to spend a little bit more time on a little bit later. So let's talk about part of the process. There's a lot of great ways in terms of how to recruit techs. There's the veterans program. There's working with technical schools. And you should really contact your AED member because they can give you a lot of great resources in terms of how to get the names of people, to get at your dealership, to fill out an application so that we can start at least the interview process. And most people's hiring process does not include what we call any kind of assessment tools. So we're really big believers in pre-hire assessment tools. And it's definitely a best practice of dealerships that do a better job of attracting and retaining solid technicians. We want to make sure that these tools with the new hires focus on both their specific learning abilities in terms of do they have the ability to complete a training program that we would put them through. And then most of these assessment tools will measure anywhere from nine to 12 different behavioral traits in terms of energy level, cooperativeness, working as a team, how they make decisions, all those kinds of things. And then also another assessment on the basic technical knowledge itself. I've shared a couple different websites with you. But again, my advice is to get with your AED rep. And AED already has some awesome assessments developed that are extremely competitively priced for your new members. And they cover both the behavioral assessments and the technical assessment side. So that brings us to one of our key phrases that we like when we talk about hiring. Let's just make sure that we hire for attitude and at least that someone has some technical interest. And if we can get someone with that on board, then we can train them for the specific skills that are required. So I would ask you to think about that. I mean, maybe you're using a tool right now. And is it really delivering on what you want it to deliver for? It's been put to me that this is the kind of weight that you should put on pre-hiring assessment tools. The resume that the candidate will submit to you kind of tells you what they've been doing in the past. And for people just coming out of technical school, there's not a whole lot there to show. The actual interview that you conduct is what you're going to indicate is what's going on in the future of that person and how we can maybe potentially predict the future in terms of how they might act and behave. Once they're in that particular job, that's where the hiring assessments come into play. So you kind of wrap all that up, take that information, your observations from a face-to-face interview, the references and the background checks that you do from the resume, and the information that you gain from both a behavioral and a technical assessment. I think you've got enough information at that point to make what we call an intelligent hiring decision. Another key thing that I find as I travel and visit with dealers in the consulting practice that we have is the concept of an internal referral program. So first question is, do you even have one? And maybe the second question is, if you answered the first question, yes, we do, is it well-known amongst your employees and is it actually something that's driving some behavior, right? So what normally a pretty solid internal referral program would look something like this. It's basically a SPIF program for employees. And what they do is they would recommend potential new hires when they see jobs posted or maybe even when they don't see jobs posted. They know somebody that might be a good fit for your organization. And this really spills into other positions beyond just service technician. So really on the technician side where we're focusing today is a SPIF program that's one, is the SPIF amount substantial enough to make it worth the risk for the employee to put their stuff out there and make that recommendation? And so many times I see that people, one, the dollar amount just really isn't much of a driver for behavior there, right? And we don't wanna make it too strong, but I also do suggest what I call a two-part program. Most people do anywhere from 25 to 50% of that SPIF amount at the time the person is actually hired. And then whether it's maybe after a 90 day calendar probationary period has passed or maybe it's even, I've seen some that actually go about a year, that's when the other percentage of that SPIF is paid to the employee. So they don't get it all at once. You know, you get a little bit for recommending the person and a lot more when they work out to be an excellent employee. Now, in terms of recommended dollar amounts, I just ask you to consider, you know, what the cost of hiring and the cost of turnover is and make it be what's comfortable within your dealership culture. I mean, I've seen programs that are anywhere as small as $500 all the way up to $3,000 for internal referral programs. So your mileage may vary, I say it that way, but make sure that you communicate that to the employees that it does exist and make it a two-part program. And I think you'll get some really good success from that. So training techs, you know, we're ready to hire, you know, we made that decision, now what do we do next, right? So we got to talk a little bit about onboarding and when we start right with this person, we're gonna stay right with them too. So we got to develop a training program to be able to fast track that working knowledge of diagnosing and repairing machines so that we can make money with this technician. That's the business that we're in. So the quicker that we can get them to be able to effectively do that on their own, the better off we are. So let's talk a little bit about this onboarding piece. Just a couple of suggestions here for you, right? So before they start, again, this goes back to that comment of making sure day one comes across strong, we got some homework to do before that gets there. So we got to make sure that their work area is ready and comfortable, it's all cleaned up, you've got a service bay already designated for this person, let's make sure that that's not where all the extra parts or garbage or tools and so forth have been dumped for a while and it's up to the new employee to come in and clean up their own work environment before they even start to do work, okay? Make sure that the coworkers know that the employee is starting so that it's not a surprise to them and encourage them to be friendly, to say hello and just reach out and make them feel welcome. And then again, this mentoring aspect as to who, and we're not recommending really specifically the service manager to be the mentor of this tech, it should be maybe one of the more experienced technicians that you have or possibly just someone with a really good personality that's a good coach or mentor like that. So assigning that mentor to the new technician and help them, show them around the dealership is again, making sure those things are put in play before day one. Now that day one starts, we gotta cover off all the essentials, right? We wanna make sure that all the particular forms are completed, all those HR things, the computer access, ID cards, where are you gonna park? You know, like give them the lay of the land, what does it look like to come to work here on a daily basis? What are the do's and the don'ts? You know, what does the dealer principal like to park and so make sure you don't park there. So we gotta start with the basics, you know, they don't wanna cram it all into one session but it really is nice when you can say provide an actual binder there, a welcoming book that provides a checklist of what you've gone over and what it all looks like to them for that whole period of them moving through their probationary period. Provide some kind of checklist at the end of, you know, what are the goals here? What are we trying to accomplish at the end of day one, week one? And then first month and then we recommend what we call little mini reviews at the end of each of those particular datelines there, okay? And I mean, who wouldn't wanna welcome somebody the first day to maybe either bring in lunch and have lunch with the department and have everybody just kinda gather around and meet the new person and talk or if you wanted to take them out for lunch too. So something like that, just to break some bread and to bond a little bit as a service department team. So at the end of month one, we wanna make sure that we give the new person some responsibility for their own orientation too, right? It shouldn't all be something that we do for them and I've got some ideas for you here in a minute on another slide here. We wanna give them some opportunities for self-directed learning and give them some appropriate supervision. Most of your manufacturers have really great introductory diagnosing and repair online courses that you can take that really make sure that they'll be scored and you can kinda give an indication as to what we're dealing with here in terms of technical knowledge. We also wanna make sure that the mentor schedules some ongoing meetings with that new startup and again, just make sure that there's good communication there. Are you getting what you need? Are you growing? Are you learning? And making sure we're getting some good progress here. So we've identified 12 different specific categories where we wanna make sure that we've got some kind of training and testing going on. Engines is definitely one, transmissions, hydraulics, electrical, actually the overall machine component identification or location so to speak. Customer service skills, even though that they may not be a field tech, there's always gonna be opportunities to talk to customers over the phone or maybe in the shop and we wanna make sure that we exhibit good customer service skills for that. Machine operational features and characteristics and this can be as simple as, today what we're gonna do is just go out in the back and take one machine from each machine family group and start operating to make sure that you're comfortable with the operational characteristics of each of those machines and so forth. How to identify parts failures is another key category. Simply completing the service intervals. So whether it's a 250, 500 or 1000, making sure that they know where to go to get that information, what those intervals entail and they can complete that. In addition to that, we think any good service department should complete a machine inspection. Sure the machine is brought in for a specific reason but most customers appreciate and will respond very well to when we conduct machine inspections and point out some potential additional things or that we might work on them and even if the customer does say no, at least we have a documentation that we did that, we brought that to their attention. So how do you conduct a machine inspection? Every dealership has their own process for ordering parts and so we wanna make sure that that technician has some coaching and mentoring in terms of what is the proper way to do that and when you've got extra parts, what do you do with that? Just to make sure that there's respect there to the parts department, understanding the cutoff times for ordering, all those kinds of things come into play in ordering parts. And of course, completing the work orders. When we ran service departments years ago at the dealership, I used to say this, I said I usually had two challenges with service technicians completing work orders. One of my challenges was the guy that was so analytical that just kept writing and writing and writing and almost this big Ernest Hemingway work of fiction here and I didn't really need that to sell the job. So my challenge with that analytical technician was to get them off that job and quit writing and get onto the next one. Plus at the other end of the spectrum, you do have people that have a tendency to just write just a few words in the description of work and it's not enough to actually sell the job or explain to the customer what was done. So, again, some good coaching skills here that actually translate to communication skills and what is the proper protocol for the paperwork at your dealership for opening and closing work orders properly. So those are our 12 areas that we suggest that we have some kind of training backup to put this new hire through. Now, we talked about a probationary period and many times that's, say, 90 days on the calendar, which shakes out to be about 60 working days or 20 days per month. And so what that could look like, something like this, right? We assign a tech to work alongside of an experienced technician. Maybe it's a master technician or another apprentice person and we wanna make sure that we give them work after they're trained to expose them to each of those 12 technical areas that we talked about. And again, maybe sitting down on Fridays just to kind of give some weekly evaluations to see how things are doing is another good practice to put in play. Some of the new training technicians will be billable. I mean, it's not like they're gonna be super fast, although the new person could be, but we're probably gonna have to recognize we're gonna have to write some of those hours off. So they can always make us money by working alongside other techs and just be a helper, some kind of simple tasks for checking machines in and out, or again, I'm a big believer in starting them off with some of those basic services, like conducting service intervals and basic machine inspections. So those are the types of work that we might make sure that we get them assigned to within that probationary period. So they've got a really well-rounded education and exposure and we can see maybe where they might start to gravitate to either from an area of technical expertise or an area of technical interest. I mean, there are some guys that prefer to work engines versus hydraulics and transmissions and electrical. So you start to maybe develop a specialty there as you watch them perform through those 12 areas. We talked about the fact that they should be somewhat responsible for their own orientation. And so make sure that they do have the resources in hand to get to this information, where are the operator manuals and tech manuals, parts manuals, where do you find technical bulletins, or what are the key numbers to call to your manufacturer if you do have extra questions or you can't, where are warranty bulletins kept and cataloged at your dealership and all those kinds of things. So making sure they know where to go to get the answers to the stuff that they don't know, or just to keep them on top of what's going on, make sure that they're proactive about using, well, knowing where to get the information and then using it. So in terms of just the hiring and training summary piece, it isn't just the fact that if they do fog the mirror and can sign their name, we're gonna get them hired because, wow, we really need techs. I mean, we need qualified techs that we can make money with, right? And so make sure that that isn't your gauntlet for hiring, it's just the fog the mirror. We also do believe in these pre-hiring assessments, as we said, and again, just a reminder, contact your AED rep about those tools that are available to you. Build a solid onboarding training program on those 12 areas, and use all the technical resources that are at your disposal, and make sure that you assign a mentoring program too, as it shouldn't be the service manager because that guy or lady is way too busy. So on the retaining part of technicians, we're just gonna kind of shift gears here and I'll spend just a few more minutes talking today about this aspect of it, and then we'll call it a morning. But there definitely is a cost of current program, we're gonna look at that a little bit, right? And the retention does start with the onboarding, with that start right, stay right philosophy that we talked about. We truly wanna be the employer of choice within our areas of responsibility, and also get those employees to engage in that too. So let's talk about this cost of turnover. There's definitely a cost to recruit, there's onboarding costs, right? Those non-billable training time, and that's usually where most people capture that write-off for that new technician is within training. So that's usually where we're gonna start. There's a cost to send the OEM training every year, right? Because most of them are requiring you to get them certified to a certain level. And there's the opportunity cost that you list if you actually can't build some of those hours. So the numbers that we've seen, pretty straightforward here. The turnover cost is actually, can be up to one and a half times the number of hours that you're required to do. The turnover cost is actually, can be up to one and a half times what that annual compensation is. So as an example, the technician is making $63,000 per year, and a full year of 52 weeks at 40 hours a week turns out to 2,080 hours times $30 an hour. That's almost $100,000 in a turnover cost. So again, making sure that we just don't fog the mirror. This sticks right in my face right here to say, that is an expensive hiring practice right there. So this cost of employee turnover can be broke down this way. You know, there's lost sales while the position is vacant. There's actually a cost of doing the recruiting in terms of the advertising, or if you did use any kind of a recruiting agency, the fees that they charge sometimes are anywhere from 20 to 30% of the annual salary of that person that they're recommending. And sometimes there's no guarantee that that doesn't work out. There's any of that money that's recoupable. So you gotta really watch which organizations you do and don't deal with there. The screening, reviewing those resumes, just the time to do that. Sometimes you have to really consider that your time is worth something too. And so put a dollar figure on that. There's the interviewing costs. There's the evaluating costs. There's the time of regarding the job offer and negotiating and all that stuff, plus the training piece. So all this stuff rolls up and it can actually be a six digit number, which is the cost of turning an employee over. So that's what we kind of want to avoid at all costs. We talked a little bit about the technician career path and maybe this, I wouldn't get too hung up on the pay scale. It's just kind of a gauge. Take this and adjust it to your particular geographic area, the culture within your dealership and your trade area. But, you know, trainees typically come in at that $15 per hour, what we call them as level one skillset. And if we could get them productive at least 75% of the time, I think that would be an admirable goal. And then moving up at a certain level, the expectation that when you get to higher productivity, then we can advance you to that next tech level, which again comes in with the higher pay scale. And so to be able to show them what that career path looks like and see what kind of ambition that that particular technician has so that they want to move up there as a level in tech as quickly as possible. So getting those milestones in play and having a real structured pay scale within the technician takes away a lot of the subjectivity of this as it should be a much more objective path in terms of how that tech moves up to advancing in their pay scale and productivity. So again, you can get these slides later and just kind of take a look at that and see if that tracks pretty closely as to what you're doing at your dealership now. We talk a lot about being the employer of choice, right? And so one of the big questions is why should a qualified tech work for you instead of your competitor or in another industry? It's a really good question to just sit back and ponder that a little bit and maybe put yourself in the shoes of a person looking for a job. There's a lot of people out there that really aren't solely motivated by money in today's environment. One of them is just what they're seeking is a clean and safe, what we call a clean and safe work environment and maybe a fun place to work. If you want to pick up a great video or book sometime, it really speaks to this. It's that, look at the fish book, the fish principles, right? It's that Seattle fish market and what they do to create, which normally would be a pretty rough environment. How do they make that organization an employer of choice? And so a clean, safe, productive, and fun place to work is something that everybody wants to come and get out of bed and come to every day and not just feel bad about where you work. And maybe it's negative there, the lighting's not good, it's not clean and all those aspects of it, right? Two of the major basic human needs as well that people have, they want to feel welcome, they want to feel important. The other two actually are they want to feel understood and listened to. And so making sure that you as managers are creating an environment where people feel that they're, you have an open door policy, they can come to you, talk about problems, or make recommendations and suggestions, and really feel that they're a part of that team is important. You've maybe heard this phrase before, as it applies to the millennial generation, that time is the new currency. So it isn't always about money. They want to feel like they're doing quality work, like they have a real place, and they want to be productive. And there really is a bit more of a balance, say, than other generations between that work and home environment, right? So being well-balanced is extremely more important to these folks. So just something to think about there. And also I think sometimes you have to think about that there is sometimes a seasonal nature to our business. So in summary, I guess I just want to ask you a couple questions here, right? I mean, examine what your needs for technicians are. How many do you need? And think about if you do have some turnover issues going on right now, what are the real reasons? What are the root causes for that? Have I hit the mark on all those programs that we've talked about in aspects of our dealership? Do we truly have an internal referral program that's working, that helps to supplement whatever recruiting efforts that we're now doing? One of the things I probably should have mentioned earlier is that I really believe that there should be a recruiting champion within that organization. Some of your organizations are large enough with many locations where you have HR people and staff doing this, and in the absence of that, you have to actually assign that task to someone else. So who's the true champion for going out there and putting some of the footwork together to really get a solid technician recruiting program? Build a solid onboarding program and include that mentoring aspect of it as well. And you'll get them trained to get them more productive sooner versus later. And look around your facility and ask yourself, what are some of the things that you could do to improve that work environment so that you could be considered the employer of choice in your area of responsibility where all the techs would prefer to work? And so they're coming to you. So with that, I wanna say thank you for your fine attention this morning. If you want any more information on any more details of this, feel free to email me at robpark at capistargroup.com. And we'd be more than happy to work with you on a one-on-one basis to help supplement any other ideas you might have or just bounce ideas that you have around a little bit. So Rebecca, thank you very much. And with that, I'll say have a great day, everyone. Good selling and all the best.

onboarding

technician retention

pre-hiring assessment

internal referral program

technical training

work environment

employee retention