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15 Insurers Raise Labor Rates

Joe Marconi

By Joe Marconi
in Auto Body Shop Discussions

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Here's a bit of good news from Florida. Gunder's Auto Center, Inc., has announced that some insurers are now willingly paying its increased labor rate, which went from $42 per hour to $48 per hour in June 2012. It's not much of an increase, and in my opinion, way below what's needed to run a quality Body Shop, not mention paying the staff a decent wage. But I guess it's a start.

 

Here's a link to the entire article.

 

http://www.bodyshopb...labor_rate.aspx

 

It's just under 15% of an increase. You say in your opinion it's way below what's needed. What do you think is needed?

 

Gunder mentioned in the article he raised it to what he thought was necessary.

 

I look at our P&L twice a month to keep an eye on things. I look more at the quarter marks and look for trends and make adjustments as necessary. We are mechanical not body so I do not have a handle on what a body shop needs like I do with a mechanical. We have had adjusters come in when there is a body shop repair at our shop. We also have had discussions with adjusters when they do not wish to pay our rate. Some good... Some not so good... It goes something like if you only pay to this amount then the customer will just have to pick up the rest. It's an interesting conversation (so to speak) when an adjusters thinks he can tell me what I am going to charge the insurer...

 

Thanks for the link to the article.

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  • Have you checked out Joe's Latest Blog?

    • Joe Marconi
      Want to End Your Technician Shortage? Focus on Retention!
      By Joe Marconi in Joe's Blog
         5 comments
      I recently spoke with a friend of mine who owns a large general repair shop in the Midwest. His father founded the business in 1975. He was telling me that although he’s busy, he’s also very frustrated. When I probed him more about his frustrations, he said that it’s hard to find qualified technicians. My friend employs four technicians and is looking to hire two more. I then asked him, “How long does a technician last working for you.” He looked puzzled and replied, “I never really thought about that, but I can tell that except for one tech, most technicians don’t last working for me longer than a few years.”
      Judging from personal experience as a shop owner and from what I know about the auto repair industry, I can tell you that other than a few exceptions, the turnover rate for technicians in our industry is too high. This makes me think, do we have a technician shortage or a retention problem? Have we done the best we can over the decades to provide great pay plans, benefits packages, great work environments, and the right culture to ensure that the techs we have stay with us?
      Finding and hiring qualified automotive technicians is not a new phenomenon. This problem has been around for as long as I can remember. While we do need to attract people to our industry and provide the necessary training and mentorship, we also need to focus on retention. Having a revolving door and needing to hire techs every few years or so costs your company money. Big money! And that revolving door may be a sign of an even bigger issue: poor leadership, and poor employee management skills.
      Here’s one more thing to consider, for the most part, technicians don’t leave one job to start a new career, they leave one shop as a technician to become a technician at another shop. The reasons why they leave can be debated, but there is one fact that we cannot deny, people don’t quit the company they work for, they usually leave because of the boss or manager they work for.
      Put yourselves in the shoes of your employees. Do you have a workplace that communicates, “We appreciate you and want you to stay!”

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