The United States unemployment rate has been steadily dropping.
At the beginning of 2021, it registered at 6.3%. By August, the last month for which United States Bureau of Labor Statistics numbers were available, the percentage had dropped to 5.2%.
With the unemployment rate on a downward slide, why are small businesses — including independent tire dealerships — having such a tough time finding workers?
Reasons vary, say dealers, many of whom are rethinking their approach to recruitment — and how to hang onto the people they already employ.
PERMANENT CHANGES?
The difficulty in finding recruits is not due to a lack of available positions, according to Jim Baxter, owner of Neighborhood Tire Pros & Auto, which has four stores in the Atlanta, Ga., area.
“I currently have a service manager position open that pays between $50,000 and $75,000 a year,” he says. “I can hire two service advisors right now in that price range.
“I have one store where we have a master technician spot open. It’s a $65,000-to $125,000-a-year position.
“This is a large range because I want to provide an accurate depiction of what (master technicians) can make. An entry-level tech might be in the neighborhood of $65,000. A seasoned guy can make $125,000 with no problem at all.”
Service writer roles have been even tougher to fill, he adds. And general service tire technicians are few and far between.
“I could hire four tomorrow. Those are $35,000- to $55,000-a-year positions.”
Baxter, who has 72 employees, estimates that he spends up to 40% of his time on recruitment, which keeps him from pursuing other things that will move his business forward.
“A good tire tech probably installs anywhere from 30 to 50 tires a week. If you don’t have the people to install the product, it affects your overall ability to grow.
“The number one way it has affected me is when I have opportunities to grow” through acquisition or expansion.
“The first thing I think about is, ‘Will I be able to staff those locations?’ I turned down two opportunities recently because I wasn’t sure if I could staff them.”
To attract new talent, “we’re having to do things we’ve never done before. I’m offering
a $3,000 sign-on bonus, which is payable $1,500 after the first three months of service and $1,500 after six months of service.
“We’re marketing our business differently than in the past. We’re trying to give candidates reasons to look at us.”
Traditional recruitment methods, like advertising through Indeed.com, have been less effective, says Baxter.
“With those, we get people who apply, but don’t have the qualifications to come work for us. It’s difficult to train an employee who has never worked in the business, especially when you’re talking about technicians.
“Traditional, vocational tech people who want to work with their hands — that has just dried up. So you have to try to recruit from an existing pool.”
That pool, however, is shrinking, he believes.
“Right now, I think a lot of people are ingrained where they are and aren’t looking to make changes.”
This has forced Baxter to look outside the tire and automotive sectors for candidates.
“We are actively recruiting from areas we haven’t before” — including the mortgage industry.
He’s discovered that people who work in the mortgage business “can become good service advisors.”
They are used to fluid situations “and they have to handle a lot of different steps in order to close a deal. They have to gather a lot of different data from consumers.
“Sometimes there’s friction because something doesn’t go exactly right. They have to navigate that friction and those hurdles to make something work.
“It’s a process you have to walk through. And it’s the same kind of thing when servicing vehicles. Things might not go perfectly, so you have to go back to the drawing board to come up with another solution to make it work.”
Baxter also is targeting former restaurant workers, “who are used to working in a fast-paced environment.”
Baxter believes that the COVID-19 pandemic has permanently changed the labor market.
“There are people who might have been in the service industry before who had to reevaluate where they were. Some said, ‘I don’t want to do this anymore. I want to do something different.’ Because so many industries came to a grinding halt” during the early days of the pandemic “and then ramped back up, that break gave people a moment to think about what they wanted to do and they’re now doing something different. They’re just gone.”
He believes this will remain the case “until we see another upheaval of some sort — like an economic bubble that bursts and forces people to look outside their comfort zones.”
Baxter says he also is redoubling his efforts to keep current employees happy.
“I’m usually good about staying ahead of the curve in pay. I like to make sure that if someone calls (an employee) and offers a dollar more an hour, they don’t look.
“Our stores are extremely busy. They see up to 60 cars a day,” which he says is different from some of the competitors in his market.
“We tend to be busier than they are, which means we have the opportunity to make more money. We’re not as capped as if we were seeing 10 to 20 cars a day.
“I’m also a big believer in a five-day work week for employees,” he says. “I think they should be able to have at least two days off each week so they can handle their personal stuff and have some private time to enjoy.”
‘EXTREMELY CHALLENGING’
“To say that finding people has been extremely challenging is an understatement,”
says Chris Guldalian, vice president of Grand Prix Tire & Automotive Center in Monterey Park, Calif. The single-store dealership is 10 minutes east of downtown Los Angeles.
“Every single business in my area is having the same problem. Everyone is short on labor. They can’t find good help.”
Guldalian attributes the problem to government stimulus money. (Editor’s note:
MTD interviewed Guldalian before national unemployment benefits expired.)
“When unemployment benefits are so lucrative, even people who are eager to get back to work have stopped to think twice. It’s ‘Should I go back to work and give this up or should I ride this out?’”
There are exceptions, he says, including “people who need to stay home and take care of other people, but I can’t think of another explanation.
“A few months back I interviewed a candidate” for a lube tech position.
“He had the experience and we really needed somebody with his skill set. He wasn’t working at the time, so it was ideal. I called him back the next day and said, ‘You can start the day after.’
“But when that day came, he didn’t show up when he was supposed to. He called a few hours later to thank me for the offer, but told me he simply wasn’t ready to go back to work. And he hasn’t been the only one.”
Guldalian, who pays above-market wages, has six full-time employees and one part-timer.
“Pre-pandemic, we were at 10 full-time people. I have to say we are blessed to have the core group of employees that we have, who have stayed on board.
“Everybody realized that the work is not going to get done unless they work more efficiently and everyone is doing their best to make things happen. But we need more talent to ease the strain on all of us.”
Guldalian has tweaked some policies at this dealership to make life easier for his employees.
“One of the things we did was change to an appointment-only program for our auto service work. We know what’s coming in ahead of time, so that has eased the strain a bit. I’m hands-on, as well, so wherever I see a need, I help.”
He also has become more flexible with employee scheduling. “I’ve never been as lenient as I am now. Everyone has my cell number. I ask for as much heads-up as possible” when it comes to call-offs or schedule adjustments.
“We’re just going with the flow. How am I going to find replacements for employees (who leave) right now? The last thing I want is for my good, core group to say ‘I’ve had it’ and walk away.”
‘UPSIDE-DOWN SITUATION’
Spencer Carruthers owns a single-store dealership, Kenwood Tire & Auto Service in West Bridgewater, Mass, some 30 miles south of Boston. He says the labor market in his area “is very lacking.”
When MTD talked with Carruthers, the state of Massachusetts was providing unemployed residents with an extra $300 a week.
“It’s an upside-down situation because if you’re paying people to stay home, there’s no incentive for them to come work for a place like us.
“It’s an economic thing. ‘Why would I get in my car and drive half an hour to make $17 an hour changing tires when I can collect 60% of what I was making, plus an extra $300?’”
People weren’t easy to find before COVID-19, says Carruthers — particularly those near the bottom of the pay scale.
But the pandemic, he notes, quickly brought existing labor market problems into stark relief.
“We’re still in that space. Companies don’t know if they’re going to get people back. A lot of people don’t want to go back to work.
“Even though we like to think everything is back to normal,” there are a lot of unknowns, he says.
“It’s really hard to make any kind of marketing plan or set business goals because we don’t know how this is going to shake out.”
Spencer, who works the counter at his store, employs three technicians. (At one point, Kenwood Tire had two retail locations.)
“They're mostly doing tires, brakes, oil changes and alignments. Those are the four things we focus on.”
One employee has been with him for 18 years. Another has been with him for 15 years. “I’ll do whatever it takes to make them happy and they know that.”
That includes adjusting their schedules.
Before COVID-19 hit, “they were working 48 hours a week,” says Carruthers. “When the pandemic came around, we went down to 38 to 40 hours a week. And they were happy with that. They were happy to have weekends off .”
A shortened work week delivered an unexpected benefit — increased productivity.
“I noticed they were working harder during the week to get stuff done, so I now reward them on their efficiency.”
The situation suits all parties, he says.
“I thought they were going to ask for the hours back after business picked back up, but they haven’t. They’re pretty much making what they were before. They are happier. Morale is better. Quality of work is better. It’s improved our profitability.”
Carruthers also had to “reevaluate” the services his dealership offers.
“We got rid of doing diagnostic work, air conditioning stuff — things I don’t make money on. I refer them out. It’s hard to get paid for those jobs. And it’s worked out. We’re not getting caught up in jobs that we can’t make money on.
“Our forte is tires and alignments,” he says. “That’s why people come here. By cutting out diagnostics, it’s enabled us to be better at (our core) work. I just bought a brand new Hunter lift . So by focusing on fewer things, we can improve our service.”
Carruthers also schedules more appointments, rather than relying on walk-ins. And more Kenwood Tire customers are making appointments by text, “so I don’t have to pick up the phone each time it rings.
“That’s helped us become more efficient, too. But if someone has a nail in their tire and shows up at our door, we’ll drop everything to take care of them.”
Perhaps most importantly, Carruthers says the pandemic changed how he views his business.
“I had plenty of time to figure out what my bottom line was and what I needed to do to make this work. It was kind of like a bottom-up approach. I never would have done that before.
“You always go from the top down. ‘I want $1 million in sales. That way I can make so much and pay everybody else so much.’
“But to me, it was more about figuring out what I needed and then making the business work for me. The pandemic forced me to do that. It was fortunate. I’m happy with how things have turned out.”
‘FAILURE IS NOT AN OPTION’
Like Carruthers, Jim Melvin reports that business at his dealership, North Kingstown, R.I.-based Melvin’s Tire Pros, is up.
“It’s been great, but the biggest problem we have now is employees. We have four retail locations and generally, we have about 75 employees. Right now, I am at about 59.”
Melvin says that during the height of the COVID-19 pandemic, he did not lay anyone off . But he reduced hours.
“Last year, I had too many employees and not enough customers. This year, we have way too many customers and not enough employees.”
He says business is up about 31% year-to date in both sales and “gross profit dollars” versus 2019. And sales are up 41% over 2020 levels.
“We are gangbusters both in tire sales and auto service,” he says.
But the staffing dilemma remains.
“We are desperately trying to hire employees,” he says. “I tell my store managers, ‘If you want to be up an additional 15%, hire four more guys in the shop.’ But they are nowhere to be found.”
Melvin, who has been in business for 37 years, says the current situation is way beyond the usual ebb and flow of the market. “I look at some of the help wanted sections, whether it’s online with Indeed.com or Craigslist or the Providence Journal classifieds. I just thought we needed to drop out and use other avenues of recruiting.”
Melvin also is not afraid to do some recruiting himself. He recently spotted a man at the local deli who was wearing another tire dealership’s shirt. Melvin hired him.
“We have resorted to some unusual tactics,” he says. “Failure is not an option.”
Employee retention has been another priority. Melvin makes sure he pays his employees well so he won’t lose them to someone else. “Leave no low-hanging fruit,” he says.
‘ANYTHING AND EVERYTHING’
At Elk River Grove, Ill-based Tredroc Tire Services Inc., the search for employees involves “trying anything and everything we can,” says CEO Larry Jeffries. That includes wage increases and $1,000 and $2,500 hiring bonuses.
It also means taking the search for workers to all kinds of platforms, from LinkedIn to Craigslist. And sometimes, it means trying to attract a good worker from another company.
“Never in my 30-plus years in this industry have I seen the hiring situation like this,” says Jeffries.
“Good people are always hard to find. You can’t even find bad people right now.”
OTR tire service has always required a special skill set and Jeffries says few of those trained or equipped for that job are searching job ads on LinkedIn.
He’s trying to fill Tredroc’s OTR tire technician pipeline with existing employees.
Jeffries says the dealership will work with “a good service tech who wants to make this their career.”
It’s not always an automatic fit, as he says comparing an OTR tire technician to an emergency roadside truck technician “is like comparing a brain surgeon to a foot doctor.”
But it can work.
Tredroc will pair a truck tire technician with an experienced OTR technician and pay that OTR-oriented employee a premium.
It’s not a quick process. Jeffries says it takes no less than six months and can require a year of hands-on training, depending on the application.
“The most difficult part is finding that person who wants this to be a career path. It’s a lucrative job. It’s a $100,000 job.”
Being short of workers is affecting Tredroc’s production.
Jeffries says the dealership isn’t turning existing customers away. But it’s prioritizing those customers over others who need an emergency fix.
“If you’re not one of my committed customers and you call me — and you’re just calling me because you’re committed to someone else and they can’t help you (right now) — we’re telling that customer, ‘If I get time, I will do the job.’
“But I’m not going to put you in front of my other customers.’”
Lack of manpower also is hampering efforts to drum up new customers, says Jeffries.
“You’re not really going after new business — because you can’t.”
He tries to refrain from blaming the tight labor market on politics, but he says that during a recent dinner conversation with other tire dealers, they concluded that the employment situation isn’t likely to change until late-2022 — after the midterm Congressional election.
He points out that with extended unemployment benefits, some people have taken in $600 to $900 a week. And that’s made it hard to convince the unemployed to take a physically demanding job and make $1,000 a week.
He tells applicants to look at things through a long-term lens and think about the security that a job in the tire industry affords. But it’s sometimes a tough sell.
“When the (unemployment stimulus money) music stops, you’re going to be scrambling for a chair,” he tells them.
‘IT’S BEEN VERY DIFFICULT’
Mick Pickens, president of Royal Tire Inc., a 15-location commercial tire dealership that’s based in St. Cloud, Minn., says he’s never seen a labor market like this one before.
“There are open positions in all industries. It’s very difficult to find people — probably more difficult than I’ve ever seen.
“We’ve made the commitment to pay whatever we have to, but then have to make sure our pricing is aligned with our cost structure. So far, this has worked fairly well.”
Royal Tire employs around 250 people. And while they are working hard, the dealership has tried to keep workloads similar to what they normally would be.
Pickens has leaned on his managers to keep staff engaged.
“My observation is that where we have good managers who care about their employees, morale has been less affected,” he says.
However, time dedicated to finding new employees has been out of the ordinary, he reports. “We collectively spend more time than we ever have” on recruitment.
“I can’t put a number on it. However, it’s now a topic that’s (brought up in) every meeting with our human resources staff.”
Royal Tire is paying more money to existing and new employees. And that has worked. In fact, Pickens believes productivity at his dealership has gone up and the quality of new employees has improved.
“We’ve found that by paying our direct labor people more money, we are attracting a higher caliber of employee and these employees are more productive. In the end, we find we are better off with higher-paid people in these positions.”
One-track mind? Tech shortage exposes bigger problem
Finding people to fill sales and service writer roles can be difficult, says Jim Baxter, president of Neighborhood Tire Pros & Auto, which has four stores in the Atlanta, Ga., area. Finding qualified auto service technicians is even tougher.
When it comes to skilled trades, “there’s a huge educational gap that pre-dates COVID-19,” he says.
“I first got into this business in the ‘90s. And if a technician wasn’t working out, it wasn’t a big deal because you had three or four people on the bench who could come in and work without any issues.
“That has slowly disappeared over the years. COVID-19 just laid it bare.”
The problem “boils down to (our) education system,” he says.
“There used to be a vocational path. There used to be a college prep path. Now everybody’s on the college prep path” and schools are steering fewer students toward the vocational track, he says.
“It’s not just automotive. It’s plumbers, electricians and heating and cooling people. Those are the most important jobs. If we don’t have people to fill those roles, our economy will grind to a halt.”
