Why it’s time for a conversation about staff pay rates

Why it’s time for a conversation about staff pay rates


Why it’s time for a conversation about staff pay rates

36% of Capricorn Members struggle to find good staff and many struggle to keep them long-term. Perhaps it’s time for a conversation about pay rates?

Do you struggle to find and retain good staff?

According to a survey of 1500 Capricorn Members across Australia and New Zealand, 36% of workshop owners have problems finding good staff. That leaps to 45% for panel and paint and 51% for tyre and suspension workshops.

The survey, called State of the Nation and conducted by Capricorn, also discovered one in 10 Members found it difficult to keep staff long-term.

These figures beg a question: why isn’t our industry a more attractive place to work?

After all, we know people love actually working in the auto industry. State of the Nation found we love making customers happy (the top factor for 26% of respondents), working with cars (17%), solving problems and fixing things (16%), and the diversity of the work (10%).

So, where’s the disconnect?

Capricorn Chief Executive of Automotive, Brad Gannon, said the problem could well be pay rates.

How much are we paying our staff?

Here’s what State of the Nation uncovered about pay rates across our industry.

Average hourly pay rate

Less than 5 years’ experience

More than 5 years’ experience

Mechanical technicians

$29

$32

Electricians

$31

$35

Panel beaters/spray painters

$30

$32

 

See the problem?

The amount we pay our most experienced people isn’t really all that much more than we pay our junior staff.

“I think everyone who enters the industry does so for the love of it, but with so much competition in the labour market, it is important that our best people are paid sufficiently and see a long-term future in the industry for themselves and their families,” Mr Gannon said.

Which is all well and good, but with 28% of business owners already worried about their finances and pressures on profit margins coming from everything from capped-price servicing to customer-supplied parts, how can workshops afford to pay staff more?

How can we afford to pay staff more?

Mr Gannon said it’s about charging the right amount for the product and service you’re delivering.

“The two issues are related, because the less you charge, the less you can afford to pay,” he said. “So, really valuing what it is that you provide as a service and reflecting that in all levels of your business, including the pay rates for the people working in it, is really important.”

Mr Gannon said he believes it is time for a mindset change in the industry.

“People (customers) hold on to an old-fashioned view of the car, that servicing them is simple and they could do it themselves. But that’s not modern-day automobiles. Servicing isn’t like it was 20 years ago. You’re dealing with sophisticated repairs and the servicing of really modern and advanced technological vehicles.

“I think the industry needs to give itself the permission to charge the right amount of money, so we can pay people in the industry the right amount of money.”

The wider conversation about staff retention

Obviously pay rates are just one part of the bigger picture. Attracting and retaining good people includes everything from providing great training to encouraging an excellent company culture.

But nearly 90% of Members agree it’s important to recognise and reward staff (so the State of the Nation study discovered), so it’s high time we had a conversation about pay rates, as part of the mix.

Finding and retaining good staff is just one of the challenges facing the industry. Discover what some of the others are (and what to do about them), here.

This article was published 26/10/2020 and the content is current as at the date of publication.