Chris Aiello Competition for talent
As you are reading this month’s edition, many of you are most likely planning to attend ProMat 2023 at the end of the month. I know I am eagerly looking forward to catching up with industry colleagues, suppliers, OEMs, and distributors. It is my assumption that attendance will be at record levels as was with MODEX 2022 where that show saw a 20% increase in attendance to its 2018 show.
I know attendees will be looking forward to seeing the latest technologies in the material handling and supply chain industry, including automation, robotics, and artificial intelligence. As labor shortage continues to be a trend with our industry’s target customers such as warehouses, fulfillment centers, etc., these warehousing companies are looking to automation, robotics, and artificial intelligence to not only attract and retain a younger generation but also to fill the voids of said shortage of labor in warehousing facilities.
Now you are thinking, okay, we know this, ‘So what does this have to do with your Aftermarket column topic, Chris?’ Well, the labor shortage is not only affecting your customers and prospective customers’ facilities, it has been a hot topic within dealerships and continues to remain as such. The competition for talent is no longer just a topic about your service technician workforce. In addition to service technicians, the competition for parts professionals, sales staff, office personnel, and management continues to be fierce. As an MHEDA business trend for 2023 states: ‘Members are competing for talent across industries and must be aware of current compensation levels, benefits, and flexible working opportunities in order to address recruitment and retention challenges.’ The ability to attract, recruit, and retain talent will have an impact on the success of your entire operation.
Many dealers that have been on the growth trajectory the past few years often share with me the same conundrum; their service growth is still limited by the lack of technicians available to hire within the industry. The math is simple; you cannot increase your service revenue if you are unable to increase your service capacity to attract new customers and get more equipment signed up for service agreements if you are not staffed with an adequate amount of service technicians. As many of the Baby Boomer generation of skilled technicians retiring from the workforce, dealers and independent service providers continue to face a shortage of technicians and they will have to continue to find ways to attract the younger generation to this profession.
Our industry has recognized this trend for several years now, in fact, a while back MHEDA partnered with the Manufacturing Skill Standards Council (MSSC) to create the Certified Forklift Technician (CFT) program. I believe this will continue to aid in the effort to close the gap on the shortage of technicians in our industry. I also think the younger generations (Millennials and Gen Z) have not been exposed to this profession or skill set when they were in high school, as previous generations were, with courses such as automotive class. If high school students are not exposed to skilled trades, such as being a technician in high school, how are they going to know that this career path exists when they graduate? Furthermore, with this skilled trade being in such high demand, how can we educate the students that may be interested knowing that there is a career path waiting for them that does not require years and years of college, not to mention the skyrocketing tuition costs that come with going to college? I firmly believe high schools should get back to having these courses as an option for students to explore this career path, rather than just solely deploying a ‘one-size fits all’ mentality of only preparing these students for college.
The competition for the existing pool of skilled service technicians remains fierce in our industry. Increased compensation levels as a tactic to recruit and attract service technicians lead to increased service labor rates that are then passed on to the end customer; which in turn can also have an impact on your profitability depending on what your market can tolerate for service labor rates.
A department within dealerships that is near and dear to me in my current role is the Parts Department. I continue to hear from dealers that they are also having trouble filling the labor gap in finding experienced parts professionals. Parts Departments are also seeing their older, experienced and skilled generation of parts professionals retire from the workforce. The talent pool of parts professionals within our industry that are equipped with an established knowledge of ITA truck and carriage classifications, most common parts, understand the various model and serial numbers for major OEMs, and have part numbers memorized in their heads, is shrinking as well.
In addition to having technical parts knowledge and experience, successful parts professionals have strong customer service and sales skills with abilities to work effectively and efficiently over the phone, by email and at the parts counter. Dealers will need to continue to invest in their training efforts to develop the next generation of skilled parts professionals, while also investing in technologies that make the research or lookup of parts easier, managing inventory more efficiently, and the transaction of a parts sale seamless. Technologies such as an intuitive ERP business system and the ability to for online parts sales (e-commerce) will also help close the labor gap within the parts departments, allowing your skilled parts professionals to work more effectively and profitably.
At a recent industry event, a presenter said the following that resonated as it relates to the Parts Department, “Your customer will wait for a part; however, they will not wait for a response.” As you are looking to recruit, attract, and retain talent within your operation, I feel that is a very important concept to consider when you hire and train your staff and invest in technologies to optimize your operations.
I look forward to expanding on this topic in future articles.
About the Author:
Chris Aiello is the Business Development Manager at TVH Parts Co. He has been in the equipment business for 16-plus years as a service manager, quality assurance manager, and business development manager. Chris now manages a national outside sales team selling replacement parts and accessories in various equipment markets such as material handling, equipment rental, and construction/earthmoving dealerships.
