At one time or another, every service manager has to deal with a technician wanting more money. The service manager is faced with a difficult situation when senior management resists. When I was a service manager in California, the dealer I worked for would let a technician leave when a $.10 per hour raise would have kept them with the company. As a service manager, it was very frustrating, and to combat that, I sat down and worked at computing what it costs to hire and train a technician. Every service manager should work through this exercise.

Cost of Hiring

Recruiting Cost

The first cost associated with hiring a replacement is the cost of recruiting. This would include the cost of advertising, using an outside recruiter, and the cost of the manager’s time to review resumes and interview applicants. Research shows that this cost can run from $2,000 to $5,000 dollars or more. To be conservative, we will use a cost of $2,500.

Onboarding Cost

After selecting a candidate, the...

What would you think if your service manager walked up to a newly hired technician who had never worked on equipment of any kind, and gave them a toolkit, and sent them on a service call?  You would probably be appalled and question their judgment.

No doubt you would tell the service manager that technicians need the training to learn how to use the tools, and how to service different brands of equipment.  Then you would spend a significant amount of money to make sure the technician has the skills they need to do their job. 

Why then do dealers often walk up to their best technician and promote to a management position, and then just turn around and leave them on their own.  I have seen this happen over and over again.  In the service management classes I teach, often there are managers with decades of experience that are just now receiving training on how to be effective as a manager.

The service manager in most dealerships is responsible for the...

One issue in this industry is the lack of recognition of the accomplishments in the service department. When I worked for one manufacturer, they would occasionally invite the service group in for a joint meeting with the sales group. There would always be an awards dinner. During that dinner, every salesperson that met the minimum quota would be called to the stage and receive an award. During that time, I exceeded every goal set before me and received nothing.  Events like this cause frustration and resentment.

This pattern permeates our industry. Salespeople win contests, go on trips, and get spiffs from the manufacturer. While not discouraging this process, I do believe that overlooking the service department creates resentment and is counterproductive. If we look at industry-standard models, service generates all of the profit in a dealership. Every sale to an existing customer is due to the quality of service they receive from your company.

In addition to service, there...

In the last article, we discussed the cost of replacing technicians. Part of the cost we included was the cost of “bad hires.” The term bad hire would apply to any technicians that leave the company for any reason before they have generated enough profit to pay for the cost of hiring them. In the last article, we estimated it costs $40,900 to hire and train a technician. Let us discuss ways to improve the quality and probability of success in your hiring process.

Pre-Recruiting Process

One of the first questions to ask is, what kind of candidate are you looking for? Do you want to hire someone experienced? Or do you want to start from scratch? Another option is to promote from within. Each of these strategies has advantages and disadvantages. Depending on how urgently you need to fill the vacancy, the type of candidate you want will vary.

Starting from Scratch

The advantage of starting from scratch is that you can train the new technician to do the job according to your...

Early on in my career as a district service manager visiting dealers, I made a scheduled visit to see a service manager. When I walked into the dealership, the service manager told me that he did not have time to meet—he had to go run service calls. I have seen this misuse of time, in various forms, over and over in my career.

Value Categories of Labor

In each dealership, there are different levels of talent and responsibility, and I categorize them by assigning a numerical value to each one. The numbers are not necessarily what a person at that level earns. Instead, the number represents the relative value of his or her time.

$25 Labor

The highest value labor in each department or company is the most senior management. They need to focus their time and energy on tasks that only they can solve.

$20 Labor

The next highest value of labor is that of service supervisors. They need to focus their time on the teams they lead. They spend their time in the field solving customer and...

One of the biggest challenges that service managers face is that of territory management. This task is challenging because there is no standard pattern that will fit every dealer. The service manager has to balance a variety of factors to achieve optimum results.

Territory Management is a Necessity

In discussing this concept with dealers, most find that while they have territories, they need to improve their results. For the dealers thinking they don’t need to develop territories, I would recommend reconsidering that position. If you don’t, you will never achieve the optimum results you could with properly designed territories.

I have heard service managers express concern with technicians developing a strong relationship with a customer and the potential risk that a technician will take customers with them when they leave. I will counter that a good technician-client relationship helps cement the client to the dealership. If properly nourished, the technician-client...

The one critical factor that is often overlooked is training for future needs. Most dealers train for their immediate needs and don’t worry about future needs. This is a very short-sighted perspective.

The one critical factor that is often overlooked is training for future needs. Most dealers train for their immediate needs and don’t worry about future needs. This is a very short-sighted perspective. Training for future needs positions an organization to make better business decisions and scale for growth. With consistently evolving industry parameters, new digital technologies and a push for advanced business intelligence, training to meet today’s requirements is only part of the train game – future training is the goal.

Here are 5 reasons to start future training – today.

Our Industry is Changing

One reason to train for the future is the constant change in our industry. Think back 20 years, and we were all selling analog copiers, stand-alone fax...

I remember talking to a dealer principal several years back and asked him for his e-mail address. He responded that he didn’t like computers, and told me to just send it to one of his admins.

I knew his business was in serious jeopardy, and in fact, it failed a few years later.

The point of that story is to emphasize that we are in an ever-changing business environment. And in many cases today, dealers and service departments are reluctant to get into the solutions business. Some have tried dipping their toes in and gotten burned; others just want to be old-school dealerships. But we must remember that we can’t afford to get trapped in the current way we do business, or we will soon be out of business.

The Reality

Office equipment today is designed to be part of a network’s infrastructure. Devices are no longer output-only or scan/fax/print devices, but now can—and often do—serve as portals for access to applications. If your company is not currently...

At some point in almost every service manager’s career, the need to promote someone to the position of service supervisor arises. By the time we need to promote someone, we are normally so busy that we don’t have much time to invest in the process.

What happens many times is we find our best technician, and we tell them that they are going to be the supervisor. We then wish them the best as we walk away. Too many times, that is where the process ends. This often results in an unqualified supervisor who has been set up to fail, and we may have ruined—or lost—our best technician.

There are a number of reasons this is not an optimal approach. First, just because someone is the best technician, it doesn’t mean he or she has the needed qualifications to succeed as a supervisor. The individual may not even desire to be a supervisor but may take the position expecting the training and support that will lead to success. Without that training, the tech is now in...

Imagine you are traveling and decide to stop for lunch in a town you have never visited before. You are hungry for a burger and you have two choices: a local place and McDonald's. Which do you choose? Most people choose McDonald's. Why? Because they know what to expect, and they always get what they’re expecting.

How does McDonald's achieve this level of consistency? By having a well-documented process to produce any menu item. Each team member is trained to make everything the exact same way every other team member makes it.

What Is a Uniform Process?

A uniform process is a series of steps or actions taken to achieve a specific goal or result. For our discussion, we will talk about the series of steps taken to accomplish a specific task in your company. When technicians follow the process closely, you can expect a consistent result.

A process is like a recipe. You need to follow the recipe if you want to achieve uniform results.

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