The Great Technician Exodus: Why Your Best Tech Is About to Quit

Back from the Indy 500 0:00

Steve Shaw: Dave Rogers, what is on your mind tonight?

Dave Rogers: How you doing, Steve? Everything's fantastic, in case you're asking.

Steve Shaw: I am doing spectacular. Every day is a good day.

Dave Rogers: I just came back from the Indy 500, my first visit out there. It was a great experience.

Steve Shaw: That's awesome. I'd love to hear about the Indy 500. I bet both of our listeners would like to hear about that as well.

Dave Rogers: I can tell you, if you've never done it, it's something to do. They say you can't envision it: the largest single-day sporting event in the entire world, 350,000 people. It's amazing, it really is. The number of people, the energy when you walk in. We went a little bit on Saturday for Legends Day, and then Sunday we were fortunate enough to be walking around the pits and on the starting grid. The number of people on that starting grid, I don't know how they cleared it in time for the race. It was amazing, the helicopters, the pre-race.

Steve Shaw: Could you imagine? I wanted to talk today about technician retention. That's been a topic of a lot of my dealers' discussions, and quite frankly I've been getting emails like crazy about technician retention and technician pay. Could you imagine, Dave, with the experience you had, if you ran a contest for next year to go to Indy?

Dave Rogers: I should. I worked for the guy who owns that track for twenty years and never got tickets. We did have one technician out in Jersey who actually hit up RP, and he did get tickets for the event, so I'll give him that. That was before he owned it. But we used to do races all the time. We used to go to Dover, and to Nazareth when the IndyCars were there. That's probably a good spiff for next year. We'll have to come up with something.

Steve Shaw: That's awesome. I've been to the Indianapolis 500 museum, and I got to take a loop around the track when I was a kid, probably seventeen years old. That was super cool. But I can only imagine how fun it would be to be there with all that madness going on.

Dave Rogers: We were going to do the two-seater ride on Friday, but we got rained out. Gina was happy about that, but I wasn't.

Steve Shaw: I have been to the Daytona 500, and a bunch of buddies of mine with RVs, big old buses, all get to park them on the inside of the track. That's a big deal for us RVers.

Dave Rogers: There were a ton of them at Indy too. It was just like a NASCAR race.

Technicians come to work to make money 2:54

Steve Shaw: That's awesome. Well, listen, like I said, I've got so many people talking to me about technician retention, technician spiffs and technician pay that I couldn't think of anything better to talk about tonight. And I'd love to hear other people's comments as well. What are your thoughts on tech retention and paying your people? Way back we had a discussion about it, but I'd like to circle back on that conversation about taking care of your technicians.

Dave Rogers: I think it's multi-factored. I don't think there's one answer. All the LinkedIn experts out there and the manufacturers like to blame the dealerships. And in all honesty, we're not always the greatest. The dealerships are definitely partially to blame. I would never say we're not. But the root cause a lot of times with technicians, whether people want to admit it or not, is their hours, their ability to make money. That's what they come to work for.

If you look at what's happened over the last twenty, twenty-five years, all the gravy work, all the maintenance work, has been taken away from the techs. There are no more timing belts. You've extended maintenance intervals to a year, spark plugs to a hundred thousand miles, lifetime fluids, which is all BS in my professional opinion. You've taken that away from these guys, and now what do they have? Diagnostics, troubleshooting, stuff the factory doesn't pay very well for. Most of the factories flat-out refuse to pay the technician for the time they have in the car. Warranty flat-rate times are terrible. I think that's a big part of it. Career objectives, setting a career path to take a kid out of school and move him up to an A-rate technician, that's part of it too. But the bottom line is, if you can't make money doing this, why would you want to do it?

The experts out there just love to blame the dealers. But if it weren't an issue, there wouldn't be, I think, nine states now that have passed laws saying the factory has to pay the dealership the flat-rate time they consider retail. I know people who have filed for it in the last couple of months in New Jersey, and they've gotten warranty flat-rate times multiplied by two approved as the retail flat rate. So the factory has been paying you half the flat-rate time to do the same job you would get paid for at retail. Some of the factories laid down, and I'm not going to mention any names, and some of them are fighting it tooth and nail, which is ridiculous, because they want to blame the dealer for all of this. Again, I'm not going to say we're perfect or that we don't screw up, but it starts with fair rates of pay, and warranty is a big part of it.

I have a Ford shirt on today just for giggles, because Gina bought it for my trip. She thought it was a good car shirt. They're the biggest culprits. They don't pay squat for warranty work. Chevy, Stellantis, Ford, they're notorious for ripping technicians off. And yet Farley was out there a few months ago telling everybody how much the dealers suck. So I think it's a multifaceted approach, but it starts with flat rate. It starts with the times.

Steve Shaw: I couldn't agree more. If I go back in the Wayback Machine and put my Ford hat on, fast-forward past the Saturn days, I really cut my teeth as a service manager in the world of Ford Motor Company. I remember all those years of labor time studies, where Ford was cutting the flat-rate hours, cutting the time. It was huge. But back then it was the late nineties, technicians were plentiful, and our standard answer was, "Well, learn how to fix a car. It is what it is. You work here, tough shit, suck it up." Twenty-five years later, we can't say that anymore.

And you're right. I was certainly a young manager just trying to make a profit, and I didn't really understand everything back then. But every auto manufacturer understands there aren't enough people fixing their cars right now. If there's not somebody who's going to crawl into that engine compartment on a diesel truck, we're all going to be up the proverbial creek. So I think the manufacturers have to understand that if they don't loosen up on those times in some respects, they're going to lose those people, and nobody's going to want to work on their cars.

Unpaid diagnostics and video multi-points 7:56

Dave Rogers: It's hypocritical for them to think they're not partially to blame and then blame the dealer. Meanwhile, every chance they get, they're dumping more and more on the technicians: more diagnostics on the cars, all the troubleshooting, the time you spend on the phone with technical assistance, and it's non-reimbursable. And now the videos are the big thing. Back in the nineties, when we started doing multi-points, we weren't paying the techs for that, because it was merchandising the car. Now some of the manufacturers are holding the dealer hostage, telling you that you have to have eighty percent video viewed rates. So now we've got technicians taking videos, which we've talked about before, of cars with five thousand miles on them.

You have all these different expectations from the same people who have taken away the maintenance these guys could make up time on. It was different back when you could make twenty, thirty, forty hours a week doing customer-pay work. If the warranty was five or ten hours, it didn't bother you so much. But now it's become a big chunk of what they do, because the work is so hard. It's not easy to do the work anymore. The diagnostics have become ridiculous.

Steve Shaw: We had Janet from Rainmaker Warranty on, and she was talking about all the things they have to do now, including straight time and diagnosis time. All the operation codes, the labor time codes, are gone. Some people say you can get X, Y and Z percentage, or that you don't have to be clocked in, but you have to be clocked in to get straight time. You have to be clocked in to get diagnosis time. You have to do all these things, and it becomes a burden on the technicians.

Have you seen this? I've got to find this gentleman's name. I'll link it in the description. He's a technician, kind of a grumpy dude, freaking funny as heck, and I sent it to you. He says, "Here I am doing a video multi-point. Hi, Mr. Customer. I'm doing this video multi-point because my boss made me do it. And pretty much your car sucks." I couldn't stop laughing watching that guy. And that's how people are going to feel. Would you work for free?

Dave Rogers: Nobody wants to work for free. And the other part of it is, if you don't have easier stuff to do, if you don't have maintenance on the car beyond an oil change and tire rotation, how are you training a guy? You're just throwing him into the mix to diagnose things? Where's the learning curve? For years you could make a few hours doing a timing belt, a brake job, a transmission service or spark plugs. Not the most complicated work, but at least the technicians were making some money while they were training.

A tenth is six minutes 11:08

Steve Shaw: My dog's barking, man. There must be some manufacturers outside my window. You know what I find funny, and you brought it up? One-tenth is six minutes. We all know that. But when was the last time anyone thought about that when designing opcodes? Who has thought lately, "Can my technician actually change oil in 18 minutes? Can I bring the car in, put it on a rack and change the oil in 18 minutes? Can I rotate the tires in another twelve minutes after that?" And so on. We're not even giving these guys an opportunity. We have an expectation that they just do it, and we're chopping their knees off. In one of our classes I talk about how a tenth is six minutes, and these men and women live six minutes at a time. I believe there's a balance, and I believe in dealer profitability more than anybody can imagine. But we've got to give everybody the opportunity to make a living, or we're going to pay for it one way or another.

Dave Rogers: Absolutely. And my only point on that is that as a business, we have to come up with solutions. We're always the bad guys in the dealership. We need to work at this and come up with some ways to bring younger folks in, which I think is getting better. We had some folks at UTI the other day, and they had a pretty good turnout. It looks like there are a lot of young men and women getting into the field who want to turn wrenches and are eager to, which is great to see. It's not cool to have a college loan to pay back now, so technical schools are at least more populated with kids who have some mechanical aptitude, which is great.

But how do these kids build up their confidence if they're not doing some of the maintenance, or they're not being paid? They start bench-testing the flat-rate system: "Can I make money doing this?" Even if you're paying them hourly or a salary, or giving them a guarantee for 60, 90 or 120 days, they're not stupid. They're going to sit there, see how many hours they flag and bench-test that pay plan to see if they can make money doing this. And if at the end of the 90-day period they're only turning 20, 25 hours, they're not going to stick it out.

The stores watching hours every day are winning 13:48

Dave Rogers: So the part we need to do is make sure we're monitoring. We've really got to look at hours again. We talked about this way back when, but the stores doing the best this year are the guys who took it to heart at the beginning of the year and started monitoring hours daily, weekly and monthly. They went back to basics, good old school, monitoring what the techs do, and they're the guys having the best year right now.

Steve Shaw: I agree a hundred percent. At least two dealers this week talked to me about technician proficiency, if that's the correct term. I was talking to them about production versus objective. We can talk productivity, efficiency or proficiency, but personally, I care about what I want my guy to do. If my guy thinks eight hours, ten hours, twelve hours is reasonable, and that's what he's capable of, I set that as an objective, and that's all I care about. Let's say we all agree he knows how to fix a car, and if you give him the opportunity, he'll fix that car. So I'm going to look at the hours he flagged versus my expectation.

What we were talking about before is efficiency: can I actually fix that car in the time the manufacturer has allotted? Both of us are old dogs. If you weren't 100% to 125% efficient, or up to 200% efficient on a job, what were you doing? You weren't even in the game, and we didn't really want you as a tech. Now it's how do we get these guys to even make their time on that repair, let alone allowing them to make more money on flat rate. So this is really my rant, and I absolutely love this rant: production versus objective. There's not a particular acronym for it, but I want to know how many hours are expected of me out of that bay over there, and how many I produced.

And you said it too: if I don't talk to that guy daily, how does he know? I still like the lick-and-stick flags. Get your notebook out and write down your ROs. I want my tech to know exactly where he stands, and I want my tech to turn his hours in to me every day. I can look on the computer, but I need you to know, just like we do with managers, how many hours you flagged. And if your objective is 12 hours, why are you going home before you've flagged your 12 hours? There are so many things we can do to help our technicians make whatever dollar amount they want to make. I think we as managers have an obligation to them, as well as to our dealer principal, to make sure they make their time.

And if you're in Philadelphia, there are probably a lot of guys who left during COVID. If you're in Miami, San Francisco, wherever you are... I was talking to a person in Kansas, and the farther you get out of the big cities, the less likely there is to be somebody qualified to fix cars, and the more likely you are to have challenges hiring people. So we've got to figure out ways to take care of them. Like we talked about last week, it's not always about the almighty rate they get paid. It's: can they make a living? Is somebody talking to them? Does somebody care? At the end of the day, am I able to make a living working at your store? If we don't do those fundamental things, like have a production meeting every day... and if somebody's not having a production meeting every day, I want them to come on here and tell me what keeps them from having that meeting. That's my rant and my high horse for sure.

One manager can't run the shop and the drive 17:52

Dave Rogers: I guess I do understand a little bit. There's a lot going on out there. I was talking to one of my managers today. He's in the shop dispatching, making sure the work goes through, and he's got techs turning fifty, sixty hours a week. He'd like them to turn more, but it's a Hyundai store, and there's a challenge in that. The customer-pay numbers are lower than the average brand, and the hours per RO are lower than the average brand. So you've got to touch more cars and do a little more work to make money. His point to me was that when he's in the shop, the guys are making the money. But now they're short at the desk, somebody calls out, he's at the desk, and all of a sudden production falls, and he's frustrated.

I said, "Well, then you need to be back out in the shop, because that's more important. Have somebody else sit at the desk." If the techs make their hours, it's like happy wife, happy life. That's the kind of environment you have to think about. And people out there say, "Pay everybody on flat-rate hours." Well, that opens up a whole other bunch of stuff you've got to manage and monitor. I want my people focused on the scorecard: hours for the technicians, and for my dealer principal, gross profit. So I've got to balance two scorecards every day, or at least every month. But when you're looking at the technicians and their days, I agree with you, every single day. The best techs don't go home until they know how many hours they're getting paid. They make sure they're paid up on every job.

Steve Shaw: Absolutely. And I hate those guys when I'm there. They're grinding me: "Flag me, flag me, flag me." You're a pain in my ass, but I appreciate that from you, because you're doing my job. One of these days we've got to have that conversation about the role of the manager versus the leader. But as a manager, I don't know anything more important. I'm a service advisor trainer. Of course we've got to sell it, but the manager has to make sure it gets done. What does come first, the chicken or the egg?

Dave Rogers: I've been saying for years that the business has gotten so complicated and so in-depth that you need two different managers. You need a production manager in the shop and a sales manager in the front, somebody taking care of the customers and making sure the advisors and customer service are there. I think it's a rare individual who can do both. I really do. The manufacturers are on you all the time. Their hotlines are calling you, the reps are emailing you. You've got a bazillion things coming at you. And for some reason it seems like the techs are just getting left behind, which is driving me crazy. That's the gas that fuels the engine. It doesn't work without the technicians turning hours. For too long it seems to have been forgotten in too many places.

Steve Shaw: It is definitely a lost art back there, making sure these guys flag hours. I think sometimes we get stuck in our ways: "It's always been done this way, so that's how I do it," whether it's one service manager who's supposed to manage everything, instead of a shop foreman or production manager and a driveway manager, and maybe a lead guy overseeing both. I think you can structure pay plans appropriately for that. If there's a shop foreman or dispatcher type of person, I just give them the title production manager. "That's your job. You are in charge of production." That's good old ATCON: production and quality control over here, sales and customer service on the other side. Two distinct roles. Going back to the good old days, those guys had it right. A fine definition of duties and responsibilities.

Taking back the maintenance schedule 22:27

Dave Rogers: And you have to deal with whatever's getting thrown at you. That's why I'm a big proponent of not listening to the factory about the maintenance schedules. I'm not trying to rip anybody off, but I can make the case mechanically, logically, whatever you want: these cars need to have the oil changed twice a year. They should be coming in more frequently. We shouldn't be waiting a hundred thousand miles to put spark plugs in cars. That's why your catalytic converters are going bad, because they're dumping fuel. When you first start up a car, fuel shoots in there and gasoline washes into the oil, and the manufacturers tell you that you can go a year changing the oil.

We've got to get the cars in more frequently and get a little more maintenance in there, to give these guys some stuff to cool their jets on, and to give the younger guys some confidence. If they're always stuck trying to diagnose something and beat warranty time, they're never going to win. I had a guy with 80-something thousand miles on his car. I can't say he didn't take care of it. He changed his oil. Guess what? The timing chain is jumping, the check engine light is on, it needs a chain and a tensioner, all that stuff. I feel bad for the guy. He hasn't done anything different from what the factory says to do, and yet you know damn well his car now needs it. It's a six-thousand-dollar job to do a timing chain on this car.

The factory's been blowing smoke up everyone's ass for the last twenty years. It's time to take back the hill. It's time for dealerships to start taking it back: "This is the maintenance a car needs." And taking care of the techs. If we have to pay them a few extra tenths here and there to do some diagnostic work, we do it all the time. But it would be nice to be compensated for some of this stuff, because the guys definitely feel like they're getting shortchanged. They really do.

Steve Shaw: Well, I think your rant is having an effect, because I was watching another guy, Stevie, I think his name is, who owns his own independent shop. He was talking about lifetime transmission fluid and how that's BS. He said he was talking to a manufacturer rep, and the lifetime of a car to a manufacturer is thirty thousand or sixty thousand miles, the length of the warranty. Lifetime to you, me and the customer is a lot different than it is to the auto manufacturer. So I think your rant is getting around, and people are starting to take notice.

Who really pays when the car breaks 25:06

Dave Rogers: Well, I think the public is going to start taking notice. The manufacturer thinks everybody just doesn't want to hear the truth: "You don't have to do maintenance. It costs less to drive our car than the next car." That's why leasing is so popular. It's a three-year disposable vehicle. But what about the second owner? What about the third owner? I've said it for a while to the owners of my dealerships: with the reinsurance program, you're the one paying for the engine at sixty grand. You're the one paying for the timing chain. The factory doesn't give a shit. Once the factory 50,000-mile warranty is over, they're done with it. They don't care. Meanwhile, the owners with these reinsurance plans are the ones paying for these things to get fixed.

And listen, I think the factory did it on purpose. A lot of dealerships don't sell the factory extended warranties. So what better revenge can the factory take on these dealers? "Let's just make these cars break down. Our extended warranties aren't going to cover it. We'll save money, and the dealers participating in the reinsurance funds will pay." I don't think it's an accident.

Steve Shaw: Hey, if I weren't already a conspiracy theorist, I'd be one now, because that's a good one.

Dave Rogers: Listen, the more you think about this stuff, you just have to wonder how much talk went into these things.

Steve Shaw: That's a rabbit hole I have not been down, but gosh darn it, the next time I'm up at midnight I might have to go down that rabbit hole and explore. On that note, I think you ought to wrap us up and give us a GM tip of the day.

GM tip: get the tech hours in your inbox every morning 26:42

Dave Rogers: I'm going to piggyback on what you said. GMs, it's not beneath you to get an email from your service manager once a day telling you what the technicians' hours are for the week. A little spreadsheet, everybody listed on there, how many hours they turned and a running total for the week. Steve uses 125%. I've always used 150%. I think it's a good goal. You want the guys doing at least twelve hours a day. That's what you've got to shoot for. That doesn't mean they're going to hit it every day, just like your salesman isn't going to sell fifteen cars every month. But it's something to put out there, and the more eyes are on it, the better off it's going to be. So put yourself on an email chain and make sure it's sent out daily. There's no excuse for not having that email by eight or nine o'clock every morning. There's just no excuse for it.

Steve Shaw: Absolutely. And there's no excuse not to have a meeting every day in your shop. On that note, we'd better get out of here, because I'm sure we've ranted and pissed off the rest of our listeners. All right, I will see you next week.