We often get into conversations where a shop owner or manager is frustrated because a technician they really want to hire is asking for more money than what they are paying others in the shop. It doesn’t normally come out at first as the manager will just say, "He’s asking for too much money. We’re not going to pay what he’s asking."
It's About More Than Just Salary
When digging deeper, we generally find that there is more to the problem than what meets the eye. Salary is typically the elephant in the room when it comes to negotiating with a potential new team member. It's an awkward conversation to have with somebody and seems to drive a kind of nervous energy. When a technician asks for more money than what your current team members are making, it amplifies this nervous energy even more.
I remember being in the manager's seat thinking to myself, "I really like this tech. How am I going to figure out how to pay them at a salary they probably deserve without pissing off the rest of my team?" As much as any of us would like to think that techs don't talk about how they are being paid, I think we’d be lying to ourselves if we didn't think it’s happening.
So, what's the best solution to combat this from happening? Based on the fact that the current market for good technicians is so competitive, I hardly think this is something that is going away. If you find yourself in this situation, you're going to have to do a deep dive in order to understand your position a bit further.
Evaluate the Market
For the most part, you probably have a good feel on where you stand in terms of salary as compared to your competitors. If you're consistently finding that you're on the short end of the pay scale when trying to find new mechanics or technicians, the market is probably trying to tell you something. This should trigger you to do some research to see what others are paying.
Market evaluation can be tough because not a whole lot of people are freely giving up their salary data. With that being said, there is a pile of information that you can accumulate by going through a job board, like Find A Wrench. Check out your local competitors to see what they are posting. Do some digging through job postings and internet research to see what kind of compensation and benefits that the rest of the market is commanding.
Look in the Mirror
This is the toughest part for anybody managing a shop. If you come to the realization that your shop isn't paying as competitively as you thought, it's time to develop a strategy around what you're going to do moving forward. Really, you only have a few options. You are either going to have to:
- Increase what you're paying
- Figure out if other benefits you offer outweigh the compensation
- Settle for a less qualified technician.
This doesn't just go for the mechanic you're trying to recruit, either. Doing this type of research might open your eyes to the fact that you're not paying your current shop staff enough. If it does come to that point, resist getting frustrated. This should scare you a little bit, but it's better to recognize it now before techs start a mass exodus out of your shop.
Rather than freak out, work toward making it right. I once managed a shop where we raised each of the technicians' wages considerably after using this exercise. Not only did it raise morale considerably, we were able to retain some very high quality talent.
How to Raise Wages
You might be saying to yourself "How in the heck am I supposed to raise wages? Based on my current labor rate, I’m as high as I can go!" To me, this turns into a different business-based conversation altogether.
Are you charging what your technicians time is worth? Are you billing correctly?
In my experience, I've seen a lot of shops that aren't charging what they are worth. While we can go much more in depth regarding this conversation in a different article, it's worth noting that you need to understand this. Not charging customers correctly results in not being able to pay a tech what the market commands. Then, this leads to customers being upset when they can’t get their work completed in a reasonable amount of time.
Once you figure out what the going rate for technicians in your market is and how to build a business that can sustain paying what they are worth, conversations with new techs get significantly easier. This type of corrective action can be really painful, and I empathize with you for that. However, making the tough calls to get this right will make your life much easier down the road.