Staffing Guidelines
Guest writer Bill Pyles brings us up to the current situation in his blog piece, “Staffing Guidelines.” After being discharged from the United States Marine Corps, Bill started a lifelong career in heavy equipment dealer product support. Starting as an apprentice technician, Bill worked his way up to the General Service Manager for a multi-state Cat dealer. Bill continued to serve in similar roles as General Manager of Product Support to VP of Service for multistate OEM dealers. Coming up thru the product support ranks gave Bill an invaluable education of customer relations, dealer product support and an understanding of the dealers most valuable resource, the product support team. After 47 years of service, Bill has taken on a new career with Mechanics and Techs LLC, a recruiting company for all Product Support employees as well as Product Support Managers. Bill is living in Florida with his wife Diana and golden retriever, Shelby. Bill & Diana spend their time with their two sons and five grandchildren. Bill can be contacted at LinkedIn; www.linkedin.com/in/billpyles or wl****@*****on.net
As we come out of the pandemic and possibly slide into a recession, I’m sure there are dealers who need to ramp up staffing or consider a reduction in staff. Today I’d like to share some ideas that worked for me during the good and bad times. During the good times, I’d get daily emails from stressed out service managers needing more techs, today, now. But something seemed out of place after looking at the facts. Facts do a good job of removing the emotional side of decision making. I’m being told we need techs, now, today, but the revenue recovery was very low, no overtime to speak of and some other locations are looking for work.
I’ll focus mainly on technicians for this discussion of adding or reducing the workforce. It seems we’ve had tech shortage issues since the early 1990’s. During the dot-com boom, more and more talent ignored the trades, opting for the glamorous work of internet related jobs. You may remember even the U.S. Army started running recruiting ads showing soldiers launching computer-controlled missiles, running high tech equipment, staring knowingly into radar screens. No more dog faces covered in mud crawling in and out of fox holes! Equipment dealers also had to dispel the myth that the mechanic’s (before they were technicians, notice the upgrade in the title) knuckles dragged the ground when they walked, and anything could be repaired with a sledgehammer and a torch! But dealers got it together, had great tech recruiting plans and business took off!
Until the last horrible recession hit in 2008-2009 and many dealers were forced to reduce technician headcount. A very strange phenomena happened; after the recession eased up, all the techs that were laid off were nowhere to be found when business did pick back up. They likely went into other trades as tech recruitment became more of a full-time job at the dealership. It was no longer build a shop or hang out the hiring sign and they would come. The rules changed, wages accelerated, sign on bonuses where generously offered, the promise of a free set of basic tools were offered after so many days / months of employment and many other hiring incentives.
Trying to forecast a technician reduction is like playing the stock market. Move too soon and you will lose good techs who may not come back when business picks up. Move too late, and your bottom line could take months to recover. I admit I erred on the later side as I wanted to do everything in the company’s power not to lose good techs. But the day would come when the difficult management decisions had to be made. Here are some guidelines I think can help.
Before pulling the reduction in staff trigger, I’d expect to see these items as facts.
- Revenue recovery to be 80% to 85% and trending upward.
Overtime averaging at least 10% in the last three-month period.
- No other locations have techs to transfer over to the location needing techs, now, today.
- Labor sales per day are trending at 90% of your street labor rate.
- This is a technician efficiency cross check.
- Gives visibility to reducing labor rates to keep revenue hours up.
- Operating profit at or above the forecast.
My goal was to support the decision of adding techs, not just adding more cost if not required. Adding techs can add revenues. But if your shop is inefficient (not meeting the requirements above), adding techs will only add to your cost. No need to add techs if another location is slow.
Look at the larger picture, not one location.
I created a short form (regarding the points above) for the person requesting the addition headcount. This forced the person making the request to review and know their numbers and or realize it’s maybe an efficiency issue, not a headcount issue.
Hopefully (by the way, hope is still not a strategy) we will not be crushed by another deep recession. But if the time comes, here are some ideas that worked for me to support a reduction in staffing.
- Recovery rate below 70 and trending downward
- 0% Overtime in last 3-month period trending downward
- No other local stores we can take technicians for the short term
Labor sales per tech per day 60% (what your daily break-even rate is) or lower, trending downward
Downsizing is tough under any conditions. You should be doing everything in your power to keep the techs you have trained and coached on board. Good techs will quickly be picked up by a contractor looking to get a dealer trained and experienced tech at a lesser cost. One possibility is to go to a 32-hour work week. This keeps all your techs working although working one day less a week. This option is worth talking over with all your techs, get their buy in and no one loses their job.
If the downturn is looking like a short term, get your techs caught up on their training. I know you will already have marketing promotions out looking for work. Get your service trucks cleaned up and finally get to all those items in the shop that need repaired. It’s an investment into your dealership or business. Remember it’s your job to keep the shops full. Hopefully the downturn is short and soon your hair will be on fire (again) when the work picks up and you’re back in the tech recruiting arena.
Here are some ideas regarding support staff or as I called it an admin to tech ratio.
Administrative is defined as a Service Manager, Shop Supervisor, Service Admin, Service Writer, any employee charged to the service department as 100% expense/nonrevenue generating.
I suggest a starting ratio of one (service manager or shop foreman) administrative position for the first five technicians. At five techs, one person will be getting stretched to perform all the service department admin functions, i.e., quotes, labor entry, work order maintenance, customer calls, closing work orders.
Once a sixth tech is hired or being recruited, we can consider a second admin person in addition to the SM or shop foreman. Two service admins should be able to manage an additional 4 techs up to a total of 10.
When an 11th tech is required, consider a third service admin. This will cover the admin ratio up to 15 techs.
At face value, this ratio may look a bit on the high side. But I’d disagree, especially if your service administrative employees are doing all the functions required to keep a service department running smoothly and not burning out the service manager or shop supervisor. I’ll not try to list all the daily functions within your service department (but I bet there are many), but I’d suggest getting out a pencil and make a list of administrative activities being performed daily. And don’t forget to add following up after the work has been completed to ensure 100% customer satisfaction, after all, these customers are the ones who can keep your shops working when the slow down comes!
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The Basics of Marketing, how to avoid the “What were they thinking” Moments
The Basics of Marketing, How to Avoid the “What were they thinking” Moments
Guest writer Bonnie Feigenbaum introduces her lecture series with this debut blog post: The Basics of Marketing, how to avoid the “What were they thinking” Moments.
Marketing is all about creating a connection between your company and your customer, a permanent place in their lives for your product and a permanent place in their heart for your brand. In 1971, as a very young child I remember belting “I’d like to teach the world to sing in perfect harmony, I’d like to buy the world a coke and keep them company… “learning the iconic Coca-Cola Hillside singers’ ad by heart. The ad was so popular that Coca Cola had Hilltop Reunion in 1990 and brought back the singers to recreate the commercial.
There are many times I watch marketing campaigns roll out and wondered who was the marketing genius who came up with that! For example, McDonald’s does so many customer connection points right and really raised the bar on creativity in my mind when they launched their pizza line in 1989. The traditional golden arches were angled to make the Zs in pizza to communicate with one picture and one word that this is McDonald’s Pizza, a logo within a logo.
In 2018, I was intrigued by Nike’s decision to use Colin Kaepernick as their brand ambassador. I read the article by the Montreal Gazette columnist Scott Stinson, “Nike stands with a bet that outcry from Trump and his allies won’t cost them business.” Kaepernick choose to “take a knee” using the moment of the U.S. national anthem to protest racial injustice and lost his football career in the process. The US was sharply divided on whether Kaepernick protesting during the anthem was disrespecting the flag. Nike, it would seem, was placing a large bet on the support their target market has for the issue and on Kaepernick’s sacrifice connecting with them. Would the tagline, “Believe in something. Even if it means sacrificing everything” resonate?
Nike’s choice did create a social media fervor as some more ardent opponents of their choice of influencer created a boycott hashtag and posted videos of them burning their own Nike shoes, socks and carving the Nike swoosh out of their garments. I would like you to remember one thing these people already paid for the products. Nike already had their money. The only person who was losing was them, as they had to spend money to replace the martyred items. Ironically, putting in practice the Nike/Kaepernick tagline. Nike did their research right, sales increased in the wake of the controversial advertising campaign, with online sales growing by 31% in the holiday weekend after the ad launched, according to researcher Edison Trends.
However, there are other times where I wonder to myself, what were they thinking and how did nobody throughout the whole creative and control process clue into the customer disconnect.
Let us go through some of my favorite fails
Urbn Outfitter was founded in Philadelphia in 1970 and is an international clothing corporation that has retail stores located in Montreal. My fashion marketing students were trying to determine why there was a significant decrease in sales over the past year. The Urbn Outfitter store brand sales were declining while the parent corporation’s other brands Anthropologie and Free People’s net sales had increased by 2% and 5% respectively at the same time. Through research the students were able to prove that in general the retail sales for the target demographic had been enjoying a continuous increase in revenue. So, what was the problem?
They investigated further and discovered that the year earlier Urbn Outfitter had launched controversial clothing lines featuring edgy and questionable mental health and body shaming crop tops with messaging like “depressed” and “eat less” while their direct competitor, Forever 21 T-shirts proclaimed positivity with “eat more” and “love yourself” on their tops.
We also discovered that some of their product line choices left a lot to be desired. There was a Kent State University sweatshirt with blood spatters on it, a black and white horizontal striped T shirt with a 6-point yellow star on it reminiscent of the Holocaust and T-shirts in a colour Urban Outfitter identified as “Obama black”. For the life of me I cannot understand how these items got through the approval process.
Another example of product fails because the company did not even think to take the customer reaction into account is Simons, a Quebec retailer. In September 2018, Simons launched a line of bralettes, a type of women’s lingerie. The story goes that when the Simons team was looking for a vision for their new lingerie line, they looked at inspiring Canadian women that were respected and admired. The line was meant to honour women who made historic contributions to Canada. The bralettes were called the Elsie, the Clara, the Nellie and the Beverley. So, while the last names were never used, the ad copy made it clear that the designs were inspired by aeronautical engineer Elsie MacGill, trailblazing lawyer Clara Brett Martin, suffragette and politician Nellie McClung and jurist Beverley McLachlin, the first woman to be appointed Chief Justice of the Supreme Court of Canada.
Now Simon’s never sought permission from the estates of the first three women to use their names or even to ask if they wanted to be bralette brand ambassadors. Nor did they ask the sole living “honoree,” the Right Honourable Beverley McLachlin who had just retired in December after spending 28 years at the Supreme Court including almost eighteen as Chief Justice.
After receiving a call from McLachlin, the president Peter Simons, immediately gave in to her demands for her a public apology and a request to get involved with fund raising campaign for the Cornerstone Housing for women emergency shelter organization in Ottawa.
In his apology, he stated that he sincerely regretted the naming mishap citing the lack of judgment on his part and that they decided to discontinue and destroy all materials related to the line following the call. During the media storm, I wondered where were the women in the room? I noticed a line in one article, “Simons apologizes for bra named after former chief justice Beverley McLachlin,” by Tara Deschamps of the Canadian Press where Simons acknowledges that there is a deficiency in their corporate culture, a lack a comfort of the staff to stand up and express concerns.
That is what my basics of marketing series is all about. I will give every employee the tools to spot the potential problems and recognize the opportunities to improve the customer experience. But it is up to the management in the company to embed that into the corporate culture, empowering their employees to put customer connections above corporate politics.
We will start by reviewing the marketing process which is a good opportunity to show a relationship between several concepts we will be discussing, during the lecture series. During the first half of the series, I will focus on introducing marketing, the marketing environment and then market research. I will explain how we use the secondary data to develop marketing information systems. We will then delve into Consumer Buying Behaviour, comparing it with Business and Institutional Buyers’ Behaviour. We will then discuss the segmentation and positioning process that work in conjunction with the company’s marketing strategy. We will also cover the marketing mix, where we implement our strategy using our 4 Ps-Product, Price, Place & Promotion. In our final lecture, we will put it all together and discuss how to prepare the full marketing plan.
I look forward to helping you discover the full potential and powers of a full formed marketing process for your company.
If you have any questions or comments, please feel free to contact me by e-mail at bf*********@*******co.ca.
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Lifelong Learners
Lifelong Learners
In this week’s blog on education, curriculum designer and writer Caroline Slee-Poulos shares the big picture of why we do what we do: lifelong learners.
In education, we like to express the most important goal of any classroom as creating lifelong learners. This takes shape in different ways at different ages. At the younger ages, it is obviously the standard reading, writing, and arithmetic. As adults, it becomes a bit more complex,
We have to ask about goals and the big picture when it comes to adults. As adults, we want to move forward: we want promotions; pay bumps; increases in job title.
I would posit that what we really seek is GROWTH.
Realistically, growth is what we all seek.
As employers, we want hires who know the business. We are noticing that students are not graduating school with the necessary skills for the business. Trade skills are in short supply and require more education than the standard K-12 that is available to students today. Funding at the high school level for the trades has been reduced to a point where students are graduating high school without the necessary skills for our industry.
Take our industry out of the equation.
What does it say about us that our graduates are not prepared for the world of technical work?
I think it says that we are in a situation of catching up. Academics are not quite at the point we need them to be when it comes to “work ready” employees. We can’t expect high school graduates to know everything they need to know when they graduate high school. The reality is, if you invest in your people, they will invest in you.
What we want to see at every level are people committed to learning. This doesn’t mean the stereotypes of the ivory tower. This means having people who consistently strive to better themselves, who push for higher levels of understanding and accomplishment.
At the end of the day, education is all about creating the foundation that leads to lifelong learning. Lifelong learners are known for consistently striving to better their performance and their results.
Aren’t lifelong learners what you want to see in your business?
As Ron would tell you, the time is now. When it comes to your commitment to learning, I would posit that the time is always.
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Friday Filosophy v.07.29.2022
Friday Filosophy v.07.29.2022
Founder and managing member Ron Slee shares quotes and thoughts for consideration from Aesop, the fable writer, in Friday Filosophy v.07.29.2022.
Aesop, 620–564 BCE, was a Greek fabulist and storyteller credited with a number of fables now collectively known as Aesop’s Fables. Although his existence remains unclear and no writings by him survive, numerous tales credited to him were gathered across the centuries and in many languages in a storytelling tradition that continues to this day. Many of the tales associated with him are characterized by anthropomorphic animal characters.
Scattered details of Aesop’s life can be found in ancient sources, including Aristotle, Herodotus, and Plutarch. An ancient literary work called The Aesop Romance tells an episodic, probably highly fictional version of his life, including the traditional description of him as a strikingly ugly slave who by his cleverness acquires freedom and becomes an adviser to kings and city-states. Older spellings of his name have included Esop(e) and Isope. Depictions of Aesop in popular culture over the last 2,500 years have included many works of art and his appearance as a character in numerous books, films, plays, and television programs.
The name of Aesop is as widely known as any that has come down from Graeco-Roman antiquity [yet] it is far from certain whether a historical Aesop ever existed … in the latter part of the fifth century something like a coherent Aesop legend appears, and Samos seems to be its home.
The earliest Greek sources, including Aristotle, indicate that Aesop was born around 620 BCE in the Greek colony of Mesembria. A number of later writers from the Roman imperial period (including Phaedrus, who adapted the fables into Latin) say that he was born in Phrygia. The 3rd-century poet Callimachus called him “Aesop of Sardis,” and the later writer Maximus of Tyre called him “the sage of Lydia.”
From Aristotle and Herodotus we learn that Aesop was a slave in Samos and that his masters were first a man named Xanthus and then a man named Iadmon; that he must eventually have been freed, because he argued as an advocate for a wealthy Samian; and that he met his end in the city of Delphi. Plutarch tells us that Aesop had come to Delphi on a diplomatic mission from King Croesus of Lydia, that he insulted the Delphians, was sentenced to death on a trumped-up charge of temple theft, and was thrown from a cliff (after which the Delphians suffered pestilence and famine). Before this fatal episode, Aesop met with Periander of Corinth, where Plutarch has him dining with the Seven Sages of Greece, sitting beside his friend Solon, whom he had met in Sardis. (Leslie Kurke suggests that Aesop himself “was a popular contender for inclusion” in the list of Seven Sages.)
Aesop may not have written his fables. The Aesop Romance claims that he wrote them down and deposited them in the library of Croesus; Herodotus calls Aesop a “writer of fables” and Aristophanes speaks of “reading” Aesop, but that might simply have been a compilation of fables ascribed to him. Various Classical authors name Aesop as the originator of fables. Sophocles, in a poem addressed to Euripides, made reference to the North Wind and the Sun. Socrates while in prison turned some of the fables into verse, of which Diogenes Laërtius records a small fragment. The early Roman playwright and poet Ennius also rendered at least one of Aesop’s fables in Latin verse, of which the last two lines still exist.
The Time is Now.
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Technician Shortage? Grow Your Own Techs!
Technician Shortage? Grow Your Own Techs!
Tonight, Learning Without Scars is proud to introduce readers to our new guest writer, Steven Johnson. In his debut post, he writes about a crucial issue we are facing: Technician Shortage? Grow Your Own Techs!
Steven Johnson retired from Associated Equipment Distributors in 2020 as Vice President of Academic Accreditation. While there, he grew the number of AED Accredited college programs to forty, and established AED Recognition of equipment programs for high schools. These include CAT ThinkBIG, John Deere Construction and Forestry and Komatsu ACT technical college programs. A robust online technical assessment and system were also created to measure students’ technical knowledge prior to matriculation and upon graduation. Established in 1919, AED is an international trade association based in Schaumburg, IL, representing over 500 construction equipment distributors, manufacturers and industry-service firms in North America. Established in 1991 and directed by AED members, The AED Foundation addresses
school partnerships, career promotion and research in the industry. This includes AED Foundation Accreditation of college diesel-equipment technology programs. Steve earned his MBA degree from Northern Illinois University. Prior to AED, he was Director of Marketing & Customer Service at I-CAR, a large not-for-profit collision industry training organization. Before ICAR, he was Director of Marketing and Manager, Market Analysis & Planning at Chicago Rawhide, a business unit of AB SKF, a global bearings manufacturer based in Sweden. Steve is currently an independent contractor and advisor to Learning Without Scars.
Technician Shortage? Grow Your Own Techs!
It’s an issue that has challenged the equipment industry for many years. That is, “Where do I find qualified technicians to hire?” Commonly, many employers have approached the problem by luring technicians from their competitors with money and other incentives. While that has worked for some, in many cases, it turns into a vicious cycle of who will pay the next $2.00 per hour more and instability in the local workforce. Sometimes the grass seems greener on the other side, however, I’ve heard of techs who went back to their original employer, even though they were paid less, because of the odious conditions “where the grass seemed greener.”
Dealers have also lured technicians from other industries or hired inexperienced technicians and used on-the-job training to bring them up to speed. That can also cause problems. Absorption rates can fall as experienced techs spend time overseeing the work of the inexperienced. In some cases, that can mean less money for the experienced techs depending on how they are paid. This is a form of growing one’s own techs, but it can take a long time to train these people to the level of an experienced shop or field tech, maybe 6 – 8 years. There are many excellent 2-year technical college programs in equipment technology. These schools allow a dealer to hire someone who can rapidly grow as a working technician. The issue here is that the schools currently do not even come close to supplying the numbers needed by the industry.
Therefore, I return to the topic of “growing your own techs.” I define this as establishing a full program for identifying and educating candidates who have the potential to be solid technicians. Here is what that looks like:
This means getting the word out early on the excellent careers in our industry, talking with the students, parents, high school career counselors and other decision influencers. Employers can present at middle school and high school career days, start “diesel” clubs at the schools, provide guest lecturers, host career days at their dealerships, and develop career materials to be handed out at such events. All of this helps, in turn, to change the old all too common misrepresentation of the “grease monkey” to the correct image of “the high-tech professional technician.” And each time a student decides on an equipment tech career, it’s an image success story.
One final thought here. Shoot for the long term. If you start working with middle school students, it could be eight years before you hire them. From high school, it could be six years. However, one you establish a managed stream of graduating students at each level, you will be controlling your own tech destiny by “growing your own techs.”
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The Importance of Service
The Importance of Service
Guest writer Mets Kramer is back with a new blog post for us. Read on to learn about The Importance of Service.
Over the past few months, I’ve been travelling to visit numerous dealers all over the US and Canada. During my visits we tend to have long conversations on the state of the equipment market. Everyone agrees it’s been a challenging time and wild ride. Many have never seen such lofty heights, prices and volumes. Machines were both in demand and hard to get and many have had some of the best years. Rental has been strong and many have preferred to rent than sell or buy. One other thing that everyone has in common is a concern about when the music will slow down or stop.
It’s this unknown future and concern about slowing machine sales that reminded me of my experiences in 2008. In April 2008 I had just joined Terex to help develop the service operations of the new construction equipment group. I was excited to work with my new colleagues and change the organization into a full operating manufacturer.
Yet, no sooner had I started, then the recession (read collapse) happened in the market. Over a few short months some of the group companies saw a drop of up to 85% in sales. At the same time, I kept in contact with past colleagues at other dealers. There I heard the same, machine sales, regardless of make were down significantly. “But”, they said “The shop is really busy”. It turned out that even with a clifflike drop in sales, people were still out working their equipment. Furthermore, as the recession continued, more machines came in for major work in place of replacement.
So here we are again, this time more able to see the economy changing and many dealers are in the same place. Many have not focused over the past years on developing their service business. This could mean activities including, understanding their currently market share, developing service products or changing the type of work their shop is engaged in. It’s understandable why many dealers have not done this. It’s been a busy time of turning around rental machines or prepping sales machines. Plus, technicians are hard to find and not cheap.
Yet there is one statement that we have all heard: “Sales sells the first, Service sells the rest”.
With a slow down likely or imminent, now is a great time to start planning what you can do to develop your service business, support your existing customers and deepen your relationships with customers.
First, understand where you are now. This can be looked at through several traditional metrics but requires some analysis of your business data. Try and find parts and service sales data both by customer and by machine serial number. Group them into behaviors that define your customers. Consider parts sold through parts, and parts through service. Measure the balance of your labor sales, internal, customer pay or other. You can look at sales vs inventory and so many more. By analyzing this data, you should be able to group your customers, understand what machines generate the most revenue and what percentage of the product support market you’re capturing.
Second, consider service and parts volume as a measure of engagement. Just like we talk about digital engagement, after sales volumes are a measure of how involved you are with your customers. If you’re not supporting them who is? If someone else is supporting them, are they in a better position to get equipment rentals or sales when customers have more choice during an economic slowdown?
Third, when you understand the situation, develop parts and service products to match the opportunities you’re seeing. Many of these strategies are tried and true and we all know them, like PM filter kits. Personally, I think one of the best programs is a PM program. Why? Because no one really likes doing them, yet they must be done. PMs also bring value and get you a touch point with customers every 250 or 500 hours. A good PM program also lets you measure how much your customers are using their fleets. Are they continuing to work? Are they busy? Parked? A PM program will give you insight and opportunity to talk to your customer, even when they don’t have any need to buy equipment. During a downturn your sales reps are equipment and fleet managers!
When you do start a PM program here are some rules
Finally, developing your service business has one other really important benefit, it keeps your techs working. One of the worst outcomes of a downturn is losing (through layoffs) the people you need to count on when you get busy again in sales. Developing a service program lets you retain your talent and possibly even pick up some new talent.
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Are Your Employees Assets OR simply Tools from a Toolbox?
Are Your Employees Assets OR simply Tools from a Toolbox?
In this, the second installment in our series on learning and education, our founder and managing member Ron Slee asks a fundamental question: Are Your Employees Assets OR simply Tools from a Toolbox? Your answer determines how you approach the education of your team members.
One of the common issues that I have had to deal with since I first arrived in this industry is the cost of payroll. Payroll has traditionally been measured as a percentage of sales. We have a payroll of $1,000,000 and Sales of $10,000,000 so we have an expense sales ratio of 10%. I have always believed that is the improper way to be looking at your employees. I believe that your employees are in almost all cases revenue generators The employees are also the ones who develop the relationship with your customers that improves customer retention and satisfaction.
One thing that I have found quite interesting over the years, when talking with very smart, experienced people, executives in charge of parts and service is how they have viewed employees. Several of them have expressed surprise when we discuss head counts. One Executive Vice president of a large major brand equipment manufacturer told me that every time he hired a new employee for his parts business the sales revenue for parts increased. He expressed how surprised he was. My answer? Keep on hiring at the rate at which your business can absorb new employees until the sales do not go up.
Many of you are aware that I use a sales per employee metric that is based on three variables; the gross profit of parts, the compensation package for the parts department, and the average unit price for the parts sold. From this you can arrive at a specific standards dollar value for a parts department employee. Let’s use $750,000/parts person, excluding the management. We use that measure over a rolling twelve-month time period. I use a bracket around that standard, 80% as a floor and 120% as a ceiling. When we have three consecutive months below the 80% of standard level, we have to reduce the number of employees. When we have three consecutive months above 120% of the standard level, we have to increase the number of employees.
Is there anything wrong with that approach?
The same thing is true with technicians as well as the teams that sell equipment, parts and service or rentals. There are dollar standards for all of these job functions. That is also true about the administrative job functions.
I still find it interesting how many of the leaders of businesses in most capital goods industries look at a high sales per employee as a positive thing, and I understand that very well. However, we can easily be misled with that approach. Nothing is ever that simple, is it?
Yes, a high sales per employee number provides higher levels of profitability for the business. That is clearly one of the metrics that owners are concerned with for their business. However, there are other factors that cannot be overlooked.
Over the past 50 years market share has decreased. For parts and service, it has gone down by over 50%. Is there a correlation that we should be concerned about here? I think so.
Looking back at the past forty years we have had a relatively stable situation with interest rates and inflation. We all became accustomed to the way we needed to operate the business. Of course, there some variations but they, for the most part they have been of a short duration. Then the pandemic hit and we were forced to adapt how the business operated.
From January 2020 as a starting point until the end of June 2022 both employees and employers were forced to rethink a lot of things. Office spacing, masks, vaccines, working from home and many other adjustments were made. Education had a very serious change forced upon it. Virtual learning became commonplace. The teachers and schools, the School Boards and Teachers Unions all were forced into serious changes. Caroline taught from home for over a year. The results determined from surveys of scores and grades are not very good. The learners in K-12 have lost in some states as much as a year in their learning results. As a society we will be paying a price for that loss of learning for decades.
Today as the employees and employers reevaluate their work and operating methods, we are noticing big, significant changes. In many cases positive ones. These changes would have taken place naturally anyway at some point. However, the changes this time were compressed over a very short period of time.
Now we are confronted with the question in the headline at the top of this blog. Do you view your employees as tools from a toolbox that you can deploy to satisfy a job function need OR are they assets that drive your business?
I think you know where I stand on that question. What about you?
The Time is Now.
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Friday Filosophy v.07.22.2022
Friday Filosophy v.07.22.2022
In Friday Filosophy v.07.22.2022, Ron Slee shares quotes and thoughts for consideration from John Muir.
John Muir April 21, 1838 – December 24, 1914), also known as “John of the Mountains” and “Father of the National Parks“, was an influential Scottish-American naturalist, author, environmental philosopher, botanist, zoologist, glaciologist, and early advocate for the preservation of wilderness in the United States of America.
His letters, essays, and books describing his adventures in nature, especially in the Sierra Nevada, have been read by millions. His activism helped to preserve the Yosemite Valley and Sequoia National Park, and his example has served as an inspiration for the preservation of many other wilderness areas. The Sierra Club, which he co-founded, is a prominent American conservation organization. In his later life, Muir devoted most of his time to the preservation of the Western forests. As part of the campaign to make Yosemite a national park, Muir published two landmark articles on wilderness preservation in The Century Magazine, “The Treasures of the Yosemite” and “Features of the Proposed Yosemite National Park”; this helped support the push for U.S. Congress to pass a bill in 1890 establishing Yosemite National Park. The spiritual quality and enthusiasm toward nature expressed in his writings has inspired readers, including presidents and congressmen, to take action to help preserve large nature areas.
John Muir has been considered “an inspiration to both Scots and Americans”. Muir’s biographer, Steven J. Holmes, believes that Muir has become “one of the patron saints of twentieth-century American environmental activity”, both political and recreational. As a result, his writings are commonly discussed in books and journals, and he has often been quoted by nature photographers such as Ansel Adams. “Muir has profoundly shaped the very categories through which Americans understand and envision their relationships with the natural world”, writes Holmes.
Muir was noted for being an ecological thinker, political spokesman, and religious prophet, whose writings became a personal guide into nature for many people, making his name “almost ubiquitous” in the modern environmental consciousness. According to author William Anderson, Muir exemplified “the archetype of our oneness with the earth”, while biographer Donald Worster says he believed his mission was “saving the American soul from total surrender to materialism”. On April 21, 2013, the first John Muir Day was celebrated in Scotland, which marked the 175th anniversary of his birth, paying homage to the conservationist.
The Time is Now.
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Staffing Guidelines
Staffing Guidelines
Guest writer Bill Pyles brings us up to the current situation in his blog piece, “Staffing Guidelines.” After being discharged from the United States Marine Corps, Bill started a lifelong career in heavy equipment dealer product support. Starting as an apprentice technician, Bill worked his way up to the General Service Manager for a multi-state Cat dealer. Bill continued to serve in similar roles as General Manager of Product Support to VP of Service for multistate OEM dealers. Coming up thru the product support ranks gave Bill an invaluable education of customer relations, dealer product support and an understanding of the dealers most valuable resource, the product support team. After 47 years of service, Bill has taken on a new career with Mechanics and Techs LLC, a recruiting company for all Product Support employees as well as Product Support Managers. Bill is living in Florida with his wife Diana and golden retriever, Shelby. Bill & Diana spend their time with their two sons and five grandchildren. Bill can be contacted at LinkedIn; www.linkedin.com/in/billpyles or wl****@*****on.net
As we come out of the pandemic and possibly slide into a recession, I’m sure there are dealers who need to ramp up staffing or consider a reduction in staff. Today I’d like to share some ideas that worked for me during the good and bad times. During the good times, I’d get daily emails from stressed out service managers needing more techs, today, now. But something seemed out of place after looking at the facts. Facts do a good job of removing the emotional side of decision making. I’m being told we need techs, now, today, but the revenue recovery was very low, no overtime to speak of and some other locations are looking for work.
I’ll focus mainly on technicians for this discussion of adding or reducing the workforce. It seems we’ve had tech shortage issues since the early 1990’s. During the dot-com boom, more and more talent ignored the trades, opting for the glamorous work of internet related jobs. You may remember even the U.S. Army started running recruiting ads showing soldiers launching computer-controlled missiles, running high tech equipment, staring knowingly into radar screens. No more dog faces covered in mud crawling in and out of fox holes! Equipment dealers also had to dispel the myth that the mechanic’s (before they were technicians, notice the upgrade in the title) knuckles dragged the ground when they walked, and anything could be repaired with a sledgehammer and a torch! But dealers got it together, had great tech recruiting plans and business took off!
Until the last horrible recession hit in 2008-2009 and many dealers were forced to reduce technician headcount. A very strange phenomena happened; after the recession eased up, all the techs that were laid off were nowhere to be found when business did pick back up. They likely went into other trades as tech recruitment became more of a full-time job at the dealership. It was no longer build a shop or hang out the hiring sign and they would come. The rules changed, wages accelerated, sign on bonuses where generously offered, the promise of a free set of basic tools were offered after so many days / months of employment and many other hiring incentives.
Trying to forecast a technician reduction is like playing the stock market. Move too soon and you will lose good techs who may not come back when business picks up. Move too late, and your bottom line could take months to recover. I admit I erred on the later side as I wanted to do everything in the company’s power not to lose good techs. But the day would come when the difficult management decisions had to be made. Here are some guidelines I think can help.
Before pulling the reduction in staff trigger, I’d expect to see these items as facts.
Overtime averaging at least 10% in the last three-month period.
My goal was to support the decision of adding techs, not just adding more cost if not required. Adding techs can add revenues. But if your shop is inefficient (not meeting the requirements above), adding techs will only add to your cost. No need to add techs if another location is slow.
Look at the larger picture, not one location.
I created a short form (regarding the points above) for the person requesting the addition headcount. This forced the person making the request to review and know their numbers and or realize it’s maybe an efficiency issue, not a headcount issue.
Hopefully (by the way, hope is still not a strategy) we will not be crushed by another deep recession. But if the time comes, here are some ideas that worked for me to support a reduction in staffing.
Labor sales per tech per day 60% (what your daily break-even rate is) or lower, trending downward
Downsizing is tough under any conditions. You should be doing everything in your power to keep the techs you have trained and coached on board. Good techs will quickly be picked up by a contractor looking to get a dealer trained and experienced tech at a lesser cost. One possibility is to go to a 32-hour work week. This keeps all your techs working although working one day less a week. This option is worth talking over with all your techs, get their buy in and no one loses their job.
If the downturn is looking like a short term, get your techs caught up on their training. I know you will already have marketing promotions out looking for work. Get your service trucks cleaned up and finally get to all those items in the shop that need repaired. It’s an investment into your dealership or business. Remember it’s your job to keep the shops full. Hopefully the downturn is short and soon your hair will be on fire (again) when the work picks up and you’re back in the tech recruiting arena.
Here are some ideas regarding support staff or as I called it an admin to tech ratio.
Administrative is defined as a Service Manager, Shop Supervisor, Service Admin, Service Writer, any employee charged to the service department as 100% expense/nonrevenue generating.
I suggest a starting ratio of one (service manager or shop foreman) administrative position for the first five technicians. At five techs, one person will be getting stretched to perform all the service department admin functions, i.e., quotes, labor entry, work order maintenance, customer calls, closing work orders.
Once a sixth tech is hired or being recruited, we can consider a second admin person in addition to the SM or shop foreman. Two service admins should be able to manage an additional 4 techs up to a total of 10.
When an 11th tech is required, consider a third service admin. This will cover the admin ratio up to 15 techs.
At face value, this ratio may look a bit on the high side. But I’d disagree, especially if your service administrative employees are doing all the functions required to keep a service department running smoothly and not burning out the service manager or shop supervisor. I’ll not try to list all the daily functions within your service department (but I bet there are many), but I’d suggest getting out a pencil and make a list of administrative activities being performed daily. And don’t forget to add following up after the work has been completed to ensure 100% customer satisfaction, after all, these customers are the ones who can keep your shops working when the slow down comes!
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Swap Stress for Serenity
Swap Stress for Serenity
Founder and managing member Ron Slee writes today about the need for greater calm in our daily lives, and trying to find a way to swap stress for serenity.
It has long been a goal of mine: to find serenity in my life.
As time has passed and that goal of serenity continues to be elusive, I am adjusting and adapting my outlook. Serenity just isn’t in the cards for me. I have much too busy a mind. Perhaps it is a reflection of OCD (obsessive compulsive disorder), ADHD (attention-deficit/hyperactivity disorder), or some other acronym that I can blame or use as an excuse. It really doesn’t matter.
As many of you who follow me know I am taken by a book titled “Indistractable” by Nir Eyal. I am learning, yes at long last, how to better manage my time and accomplish things. I was being much too precise in how I managed my To Do List. Now I have assigned “Time Blocks” to my life and it seems to be working better for me.
Can I really move from stress to serenity? Putting the two words together like that has helped all by itself. There is stress, for me, associated with a specific goal and a specific time allocation. I suspect the same is true for you as well. How does that become stressful? Our minds seem to work on deadlines. When we are up against a deadline, our To Do List, we feel stress. It seems that this is all very normal. We get interruptions all the time and those get in the way of our To Do List. More Stress. As a result of that realization, I went to time blocks. I assign the work I want to accomplish a block of time. No goal just a block of time. I have been trying to assign eight hours of time to work and sixteen hours or time to life. Imagine that?
It seemed weird looking at it. I had assigned all of the work elements I needed to get done in my work day.
Total Eight Hours
Seems pretty simple yet rather strange looking at it, doesn’t it? Gone are finite goals with specific time lines. And after two or more weeks my level of stress has become much less problematic. I am calmer. Perhaps, dare I say it our loud, more serene.
The other sixteen hours are simple as well. Two hours for personal time. Exercise or reading or whatever it is that I want to do. Fourteen hours of living with my family and friends and sleeping.
When I look at it, I am stunned that it took me so long to come to this type of approach. It took a Behavioral Scientist to penetrate my thick head. I have been on this pursuit for most of my life. Finding easier ways to do things. Find my effectiveness or efficiency. My Industrial Engineering roots are showing. I was involved with Continuous Improvement as a teenager. I called it laziness. It wasn’t really. I was just trying to find a more effective way to do things. In fact, everything. It is in my genetic makeup.
At the same time many of you know I have been pushing a book called Ikigai. Which is the Japanese Pursuit of Happiness.
After all the only real goal to have in life is to be happy. To seek happiness. It has taken me a long time to get here but I am here now. The word “happy” dates back to the 14th Century when it was used to describe luck; someone who was “happy” was prosperous or favored by fortune. But as with many of you I had trouble and still do have trouble defining my understanding of my happiness. This concept can be very imprecise and perhaps that is what bothers me. There needs to be clarity and precision in things. Yet it turns out that there is no proven way to determine the factors of happiness or increase significantly a person’s level of happiness. That sounds like Don Quixote “tilting at windmills.” Perhaps that is why I have not achieved it. Don’t get me wrong I am a happy person. The glass is always more than half full. No matter what the problem is in my life or my work I can handle it. Nothing is too great an issue that it can’t be dealt with properly.
And yet… What do you think?
Care to join with me and swap some of your stress for more serenity?
The Time is Now.
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What Benefits Are YOU Going to Receive from Learning?
What Benefits Are YOU Going to Receive from Learning?
Founder and managing member Ron Slee invites readers to start their education in “What Benefits Are YOU Going to Receive from Learning?”
I think most of us can remember our regular school years. I know that I can remember mine very clearly. I have written about them here before, but today I wanted to bring YOU back into learning and explore the differences time and technology have made for us.
Those of you who know the Learning Without Scars story know that we began our employee development in traditional, in-person classrooms when we were still organized as Quest Learning Centers. We adopted the webinar format in order to make education more accessible, and then adopted the asynchronous, online classroom. I like to point out that we did this long before the pandemic began, so we were early adopters.
Most adults I speak to have had a negative experience with education. After all, if you think about it, Kindergarten through Grade 12 education doesn’t give you, the student, very much in the way of choice. By the time we establish ourselves in our profession, we have the added pressure of expectation. We are expected to know what we are doing, all of the ins and outs, in many cases without a great deal of training.
Education has changed dramatically. As educators, we have a lot more research on how to deliver learning to improve results. Lecture times and quizzes and other devices to improve learning and retention have seen changes recently. Technology has helped tremendously as the students in the lecture halls have cellular phones or tablets or laptops with them. The professors and teachers can post a quiz question on the screen or white board and get instant feedback from the students on whether or not they are “getting” it.
My daughter Caroline has a Master of Education Degree. I taught people how to teach at university for six years. We have a little experience in the world of teaching, in addition to having front row seats to all of the changes in education over decades. We started the search to find a good source, widely respected and international to provide some level of certification. Caroline found the International Association of Continuing Education and Training – IACET. She then put together the application for Learning Without Scars to become an Approved Provider. This allowed us to provide Continuous Education Units – CEUs to our successful students. CEUs are education credits that are applicable to qualified institutions from technical schools, junior colleges and universities world- wide. It was quite a journey and serious challenge to satisfy all of the IACET requirements. In November 2021 we became the only Approved Supplier in the Construction Equipment Industry World-Wide to have this accreditation. We are very pleased with that.
Albert Einstein once said, “When you stop learning, you start dying.”
I’m pretty sure that isn’t an outcome we want, is it? My hope is to shift your thinking about learning. My goal as a teacher has always been to help students to identify and access their potential. My role is to facilitate YOUR growth and help you to reach YOUR goals.
We built our Learning: On Demand courses to bring the classroom to you and remove the hoops many adult learners have to jump through in order to incorporate classes or training into their already busy schedules.
So, as we start this new series of posts on the subject of education and learning, I have a series of questions for you to ask of yourself. It’s just a simple way of taking stock, in order to better plan for what you want to be learning.
Learning is simply a way for you to unlock your potential, and the opportunities that come from growing and developing your skills and knowledge.
The time is now.
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