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The 'Wage Wars' Are Here: How to Arm Yourself for Success

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Dennis

Employees at the top of skilled positions know they can command virtually any price for their services.

This MTD exclusive was provided by Dennis McCarron, a partner at Cardinal Brokers, one of the leading brokers in the tire and automotive industry.

A few years ago, I wrote about an impending “wage war.” The primary driver at the time was a shrinking talent pool at the beginning of the pipeline and an aging skilled workforce. (At the time, the average age of a master certified technician was 55.)  

When you combine those two factors, it creates a wage imbalance. Employees at the top of skilled positions know they can command virtually any price if they can fix virtually any car. And employees at the entrance of the job market also know that reliable help is scarce and support for a high minimum wage is strong.

Now add to the mix three items:

1. A surge in demand;

2. Government-run unemployment rules that can potentially pay more for people to stay home than you can pay them to work, and;

3. A restaurant industry that lost nearly all of its workers, who have had a year to choose employment in new industries. Restaurants are desperate to reopen to full capacity and customers are desperate to spend money there. Restaurant owners will pull from anywhere to fill entry-level positions.

There isn’t a “first shot” or dot on a timeline to indicate when a wage war is going to happen. It’s more like a confluence of events. You may not know when a wage war will start, but you will know when you’re in one. And you should definitely know that you are in one. And it’s not just technicians. It’s talented sales and management people, as well.  These workers know their value. You should, too.  

Let’s look at a few things you should be doing to assemble the best team:

Retain. This is the best tactic to use when you already have a really good team.  Have you given out raises because of COVID-19? Have you retooled your bonus programs to reflect the times? I’m sure you’ve adjusted your hours. Are you adjusting back? If so, how will you explain this to your employees?  

All of these questions are critical in retaining your employees. Right now, there are many tire dealerships that are dealing with a surge in demand and not enough employees. That puts two pressures on you: higher wages and better working conditions.  

Decade after decade, employment polls show that money isn’t everything. Employees want good bosses, good co-workers and safe working conditions. Money is a strong initial pull, but if you want long-term employees, you must meet wage demands and maintain proper working environments.

Recruit. Sorry, traditional recruiting is not going to cut it. Large online employment seeker sites are not your go-to solution in a crunch. Recruiting in a wage war is a matter of relationships. Talk to your current employees, put the word out that you are hiring and ask for references.

However, do not under any circumstances lower your standards. As a matter of fact, you can use this opportunity to raise your standards. 

Football coach Nick Saban once said, “Mediocre people don't like high achievers and high achievers don't like mediocre people.”  

There are high achievers in this industry, but some of them may currently work somewhere else. I’m not an advocate of stealing employees. But If I have the best team, the best store, the best equipment, the best benefits and the best management, I don’t have to recruit a whole lot. Usually people are looking to get on board.

Invest. It’s time to make your store shine. It doesn’t have to be expensive, but it has to be clean and sharp. Fresh paint, a waxed floor and an updated waiting area? That’s a start. How about the employee bathroom or changing area? These things matter always, but especially in an ultra-competitive environment. No high achiever wants to work at a dealership where the outside lights and signage don’t all work or the glass in the door is cracked.

You might be asking yourself, “How am I going to pay for all this?” That’s a legitimate question. How are you going to pay for anything when your good talent leaves? The good ones always go first because they have a strong sense of self worth.  

How are you going to pay for this? Let me set the turntable needle on my favorite song: “Raise your labor rates to market value, price parts out correctly and start selling add-on services, where appropriate.” I love that tune.

Please don’t delay. Get your pricing sorted out, give raises to those who deserve it, clean up your place and you’ll be fine. Just start taking action on the things you can control.

Dennis McCarron is a partner at Cardinal Brokers, one of the leading brokers in the tire and automotive industry (www.cardinalbrokers.com). To contact McCarron, email him at dennis@cardinalbrokers.com.

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