#169 - Fixing The Mechanic Shortage w/ Michael Mole

Boys and girls, it's another episode of independent dealer podcast. Today, it's Michael Mole from Savannah, Georgia, talking all service, all the time. What's it gonna be like today? Jeff?

Hey, it's so great. We cover so much. We're gonna talk about hiring techs. We're gonna talk about pay plans. We're gonna talk about where you find them, how you keep them, how you can structure bonuses. Michael, it just educates me totally. I mean, through the roof. I've got so many notes here that I'm going to take back to my service bays in the back. Michael, say hi to the independent dealer community.

Hey, thanks for having me.

All right, guys, here we go.

Welcome to the independent dealer podcast with hosts Luke Godwin and Jeff Watson, a podcast by Dealers for dealers. Here we go. So my name is Michael. I'm in Savannah, Georgia, and I actually got into the car sales business a little less than a year ago, as a matter of fact, got our dealer license in the summer of 2020. I'm not sure exactly when. And so we've got, I don't know, a few hundred or several hundred grand worth of buy your pay here portfolio that we've kind of just built one by one. I first heard the term buy here pay here, like, in March of 2020, and so kind of jumped, you know, right into it. We're like nine months into that. But my more sort of background in the auto business is on the repair side of things. In 2015, I started working for Integrity Auto Repair, which you can see, got the hat right there. I started working for integrity in 2015. I dropped out of college to start a window cleaning and pressure washing business. And so, you know, my background has sort of always been business, and so started working for a really good friend of mine who had started Integrity. And I was the manager at integrity from 2015 to 2017. We opened our second location in 2017, and then in 2019, the other manager and I got together and bought out Jack, who was the founder of integrity. So 2019 through current, you know, we've owned integrity, and it's two locations. Auto repair, you know, is what we've done since 2013. And the sales side of things kind of was a natural fit for that because people were just constantly asking, you know, who do, you know, who can. You can buy a good car from? So the service side of it has been, you know, what the vast majority of my experience is. And so I've learned a lot from you guys, honestly, on the dealer side of it. And, you know, all of that.

Well, today we want to learn a little bit about the tech side from you, I think.

Yeah. So two locations. How many employees at each location?

So we've got about five employees per location. So each location is six bays. And so we've got three techs per location. And then like a service advisor and a manager at each location. It's kind of how we're set up.

Do you have a specific vehicle that you. Y' all cater to or is it just.

No, we're. We really pitch ourselves as sort of as a dealer alternative. So, I mean, you know, we're working on Nothing older than 96, so all OBD 2 and more recent, but no, I mean, we do all domestic and imports, you know, both of those. And honestly, from a cost standpoint, we're almost as expensive as what the dealers are here. You know, from a repair standpoint, maybe not quite, but within, you know, maybe 10%. And we're. We're really not ashamed of that because we're going to be better customer service. We're going to be more economical in terms of what we actually recommend to the customer instead of just throwing the whole laundry list at, you know, just like if they quote you an alternator and we quote you an alternator, our prices are going to be pretty similar. The question is, what else are they going to throw on top of that? At the same time, that's going to make, you know, us a better option. And plus, we're going to turn you around in a couple of days at the most, where, you know, you might be there for, you know, a week, because they can't find tax either. So. That's interesting.

I've never heard someone talk about it that way, that you may. That your pricing is pretty similar, but you're not trying to knock somebody's head off with.

That's right.

With everything.

Yep. Yeah. We had a customer of ours who we had done a timing belt, water pump, fixed an oil leak for them and a couple other repairs, and they went to the dealer to get a recall done. And the dealer immediately recommended everything that we had just done on the car without even looking at it. You know, they saw residual oil from, you know, where we had replaced the valve cover, gasket, they saw some oil, and they recommended literally the whole laundry list without even doing the fact finding with the customer of, hey, have you ever had this done? Or whatever. No relationship. It's like, we want every dollar you have today, right now, and if we never see you again, that's cool. And that's just not our philosophy.

That's so interesting you said that. I've had that timing belt scenario happen literally 20 times. And what I've done every time, I said, well, the customer comes back to me and starts really getting angry. Hey, yeah, I paid y' all twelve hundred dollars and y' all do this and this and other. And, and I said, I'll tell you 100%, we did it here. You know, here's the parts. You know, invoice, if they're, if that dealer is so inclined to tell you that it hadn't been done, tell them to take their time, pull it apart and see if it's done or not. And I had one dealer did it and they've never recommended another time about to one of my customers again.

Yeah, it's crazy because, you know, we even had, you know, the time belt kits come with a sticker that says, you know, done at this time, at this mileage, they don't even look at it. It's just a. By the recommendation. Yeah, and that's fine. It's fine to recommend maintenance and all that kind of stuff. You've got to do that. But it's got to be within the context of the relationship and asking those questions. And so those dealers, you know, the franchise dealers have got the reputation they have for a reason. And so we just work really hard to. I mean, our name's Integrity. And so some people laugh and say, well that's you know, like honest lawyer, like that's just an honest moron. But, you know, Integrity Auto Repair, like we've got a really high bar set.

For ourselves just inside your name. Do you find, do you have difficult combating the notion that like, well, if it's going to be the same cost, why don't I just go to the OEM and have them? Because they're so much better at it and blah, blah, blah, blah, blah.

Like, yes, there, there is a perception, especially with an older clientele who is kind of, you know, always taken to the dealer, you know, especially your, your better customers, like your, your 60 year old, you know, married couple who Drive a Lexus RX350 that's maybe seven years old or whatever. And all through the warranty they did everything at Toyota or at Lexus. And you know, then they, they get this astronomical quote for whatever repair from, from, from the dealer. And they call us for a quote. And we don't do a quote over the phone. We say, well, we don't know if it needs all that stuff, so why don't you just come in, we'll do the inspection and at that point we've got them. If they come in and they have the experience with us and meet our guys, then we've got them. And so, you know, it really is the soft things set us apart much more than the dollars and cents. You know, all of our front counter people, our customer facing people, are super skilled on the customer service side of things. I mean, two of our guys we've hired came from Publix or Chick Fil? A, which I know you don't know what those are, Jeff, out there and you know, God forsaken, I'm just kidding. You know what Chick Fil A is, right? Well, they're everywhere daily. And, and, and okay.

And Publix is an awesome. The best grocery store, great customer service.

The bet, the best. And so that's where we've sourced our front counter folks from, is people with that kind of experience. And so that just sets us apart, you know, because they know how to build that trust and build that connection.

Well, Michael, you lead us down an interesting path there. You know, right now is one of the strangest job markets I've ever seen. Not only techs or good techs are always very hard to find, but any tech is hard to find at the moment. And it seems that just oil change techs are wanting 20 bucks an hour and it's hard to justify these things. How about give us some steps to hire good techs, retain techs, and what should we be paying these guys?

Yeah, it's a challenge with techs. And you know, the recent job market, you guys did a podcast a week or two ago talking about all your employees want to quit. And so shout out to that if you, if you haven't listened to that. It was a pretty interesting listen. For the tech side of things, though, that is like its own separate job market. There's no tech in America who's drawing unemployment. Zero techs are on unemployment. If you're a tech and you want to work, there's jobs lined up for you. And that's been that way for years and years. And it's only going to get worse. Well, there's two different ways that we look at that. Number one is how do you fix it? And number two is how do you capitalize on it in the meantime? And because the thing is, if it's hard for you to find techs, you've got to see that as a, not just a challenge, not just as an obstacle, but as an opportunity. And so, and that's the way that you look at everything in business. Everything in business is either going to be an obstacle or an opportunity. And so the tech shortage, which is what's talked about constantly on all of the, you know, the shop owner, Facebook groups, the tech shortage is an opportunity. If you can't find them in your competition, can't find them. So once you find them, you've got to do everything you can to keep them. To keep them and, you know, to have them be happy. And so those are sort of the two, two separate ways you can kind of look at this sort of situation.

Yeah. Can I ask you a question? Can we, can we rewind a little bit? Because I feel like when you're talking about attracting the text, right. I mean, that's the number one thing. And you're either going to do that through your pay or your culture, right. Or your lifestyle or whatever those things are you. And let's talk about that. But first off, it seems to me like you've set up a shop that has a reputation or a culture of attracting those kind of guys. And does that start with the owner? Does it start with the service writer? Does it start with your office manager, like. Cause I feel like that's the issue that we, I've had in the past here is my service writer is maybe not a great people person, you know, maybe a good tech, maybe a good whatever, but not really great at dealing with customers and not really great with dealing with techs. And so we're stuck in this kind of no man's land. Is that where you maybe the first piece of the puzzle?

I think that you absolutely nailed it there. You know, a good tech can go wherever he wants to and make a really good living. And so it's, it's going to be hard to win just based on the hard things, on the dollars and cents. You're going to have to, you know, compensate with some other things. And Integrity has been very lucky because Jack, who was the founder of Integrity, you know, he was an A level master tech for years and years. And he started Integrity when he was, I guess in his maybe mid-30s. And you know, he'd saved a whole bunch of money up. Not a whole bunch, but, you know, started Integrity really is like a mom and pop shop. And he was tech number one for Integrity and my business partner now, Craig was the first service advisor for Integrity. And he was from the banking world and had, you know, been teller and done all those kind of things. So, so those were kind of like the, the two guys who started Integrity, a level master tech was the owner. And then a really good sort of people skilled person was kind of the front counter person. And so because the original owner of Integrity was a tech, all of our systems, before I ever even started Integrity, all of our systems were set up to cater to what a really good tech would want. And so, and Jack was ruthless man about like how he wanted things to be set up. I remember him screaming at me one time because I came out to tell him something verbally that should have been written up on the work order. And he was like, I speak work order ease. And that's what he said, I speak work order ease. If there's a note on the work order, I'll do whatever you put on the work order. But don't come out here and talk to me when I'm in the middle of doing whatever this job is and waste my time. Put it on the work order if you want it done and otherwise just leave me alone and let me do what I'm doing. And so a lot of kind of those systems and policies and things like that from the jump were set up by techs for techs. And so we're one of the more tech friendly shops I think because of that. And so I've never been a tech, you know, my background was more business, communication, marketing, sales, like that kind of stuff. But I kind of had a baptism by fire into it, you know, from day one of how things are supposed to be run from that tech's perspective.

Well, Michael, if we aren't master techs and we've never set that up, what are some of the things that we should make sure that our shop is doing to be tech friendly?

Yeah, I think that understanding the value of their time is a big, big part of that. And so all of our guys just to dip into pay plan for a little bit and maybe we can put a pin in that and come back to it if you want to. But all of our guys are paid flat rate now. We have guarantees and things like that, so they're not taking all the risk if it's slow. We can come back to that if you want to. But so they're making money by being productive. And so what that means is that you've got to honor their time and treat their time as being incredibly valuable, not just to them, but to you as the business owner. Whether you're a, a repair shop like us, where their time is your bread and butter, or whether you're a dealer where you know you're, you've got them as a service center that's doing recon on your vehicles or repairs for your customers. You know, you've got them for eight, nine, ten hours a day. So that, that is your inventory that you can sell. One tech eight hours. So of that inventory, you can never get that day back. You can never get those eight hours back. So how do you make the most out of that time? And so even asking that question, starting to think about that is something that adds a ton of value. And going to your really good text and saying, hey, this is a thing that I've been thinking about. You know, I think that I'm wasting a lot of your time by not being as efficient as I can. Just be brutally honest with me and tell me how I can make us be more efficient and, you know, waste less of your time. Because I know you're, you're coming here. These guys got into this business. Techs got into the business because they like to fix cars. They like to solve people's problems and then see that car drive away. That's why these guys got into the business. From a little kid, they were good at fixing stuff. And so he doesn't want to deal with bs. He doesn't want to deal with talking to people with the computer with all that stuff. He wants to fix cars. So if you go to him and you say, hey, you know, Mr. John Atec at, you know, my shop, what can I do to waste less of your time? I've been kind of thinking about how much of your time I probably waste. You tell me how we can be more efficient, and he'll tell you. He'll have a list of stuff that's been irritating him for sure. And then it's on you to do some of that stuff and to show him that you're making an effort. But the things that we think about. There's another time when Jack, you know, got really after me. One time when I was still fairly new at it, there was a job that we were doing. I don't know what it was. Let's say it was an alternator. And there's an alternator for sale from one vendor that's, you know, 220 bucks. And an alternator for sale from another vendor. That's 190 bucks. And so it's $30 difference. Well, the more expensive one I can get today and the cheap one I can get tomorrow. Cars on the lift, I call the customer and I say, hey, this is what it is. And I price it out based on the less expensive alternator, it's going to save them a couple of bucks. Maybe we make a couple of bucks more of gross profit on the deal. Hey, I can get this part tomorrow. We'll get it done for you tomorrow. So I got there and tell Jack, hey, you know, part's gonna be here tomorrow on that alternator. And he's like, oh, man, you can't get it today. Like, this is a car. You would think you would be able to get it today. I was like, well, I can, but, you know, it's like 30 bucks more expensive. He just looked at me like I was the biggest idiot in the world. And he's like, so I'm gonna pull this car out, and then tomorrow I'm gonna get my jump box, I'm gonna go out there and jump it again and drive it back in here. Where right now. It's on my lift right now. I can tear this thing down by the time you have the alternator here, have this done and never touch this car again. What are we doing? Find a way to make the $30. And so, you know, things like that, where you optimize for the wrong things, just call the customer back and say, hey, you know, it's going to be 50 bucks more, but I can have it done today. Like, well, yeah, they'll probably pay 50 bucks to get their car done today. And so things like that, you know, if you show your text that you're really honoring their time, they're going to respond well to that. And that creates this culture of, you know, productivity and efficiency where, I mean, our best techs are averaging, averaging 60 plus hours booked a week, and they're in our building 40 hours a week. And so that's average. I mean, you know, our payroll is nuts for these guys during the summer. I mean, they're turning 60, 70, 80 hours a week, and they're never in our building more than 40, 45 hours a week.

That's incredible.

Can we go down that road a little bit more? Like, let's have a discussion. What? I mean, flat rate versus hourly. Is there a point where that becomes smart or a combination of the two? Luke, what do you do at your place? Are you all flat rate or does it depend on a text? Btex.

So, just full disclosure, we are on a hybrid model that I built, and it depends on whether you're 70, 80, or 100% efficient. Efficient and 70, 80, 90, or 100% 70. You're going to make exactly what you. What your base pay is 80. You'll get another dollar hour, 90, another dollar hour. And then at 100%, you're. You're getting flat rate. That's how we built it. And of course, lube techs aren't. Aren't in the. On that program. They're paid hourly. How about you, Michael?

So our lube techs are paid hourly, but even the lube techs, we track how many hours they're turning. You know, an oil change, we're paying half an hour for that plus an inspection. And we do a digital courtesy inspection. So we're using a tablet to take pictures and all that kind of stuff. So an oil change for us pays 8/10 of an hour, including the inspection. So our lube techs get paid an hourly rate, you know, a clock hour. And our lube tech is, you know, usually on the clock 45 hours a week or so, something like that. So he's got 40 bucks of his regular clock hour, then let's say five hours of overtime. And then they also get paid $2 an hour for each hour they turn. So a lube tech can turn, you know, say, 35 to 45 hours a week worth of just oil changes, tires, some easy breaks, you know, that kind of stuff.

And so you're doing a hybrid hourly flat rate for your lubes as well.

That's right.

And their base hourly is about what.

15, 12, 16 and up is what you're gonna get somebody who's good quality, you know, 16 ups, where you're gonna get somebody's good quality. And for our. For our regular, you know, regular techs, all of them are flat rate, pure flat rate. I've seen a lot of people, Luke, who have, like, the different hybrid systems like that. And, you know, I've kind of done the thought experiment with it. I'll tell you the problem with it. Once you've been flat rate for a while, it feels to the tech like added complexity and like, well, you know, here's the boss just trying to find another way to screw me, you know, that kind of thing. And so we've just never gone to that, because the simplicity of this job pays 1.5. And I know I can do it well in 45 minutes and get paid for, you know, 90 minutes worth of work. That's just a really good incentive if you've got good quality people.

Well, I agree with that. And one of the reasons I went to the hybrid, before we went, we.

Were hourly and clock hour, clock hour. And it was so hybrid. So hybrid is a really good step.

You know, and that's, that's what we were and that's what we were doing.

Yeah. And so I don't think you could ever go from flat rate to a hybrid thing because you're incentivizing the wrong behavior at that point. But if you're clock hour already, then hybrid is a good step forward. And again, you know, Jack set all this up before I ever joined Integrity. And he just said, look, any good tech's gonna want to be flat rate cause he can make more money that way. Right. And, and it's just a no brainer if, if the work's there, then he's going to make more money. And so what we've done is we've taken the risk out of it for our guys. So the way our sort of pay plans are set up, all of our guys have a 40 hour guarantee at a certain rate. So let's say that's $27 an hour is what their guarantee 40 hour is. So they're guaranteed or less than 25 just for even so $25 an hour, 40 hours a week. So they're guaranteed 1,000 bucks a week. Right. As soon as they turn 40 hours, all their hours, not post 40, all their hours now are getting paid at 30 bucks an hour. And so what they understand is Integrity makes more money when they turn more than 40. That's when we start to actually be profitable because we're just paying overhead, you know, under 40 hours we start to actually be profitable once we're beyond 40 hours. So if a tech turns 50 hours a week, now he's turning 50 hours at 30 bucks an hour. So now he's making 1500 bucks a week. And so we're incentivizing them to be productive.

I like that a lot. And is it, do you give almost a $5 bump $5 at that $5.

Once they get to 40.

So for a guy like, but for a guy like me, where most of my techs are hourly right now and I've got a different setup if I backed into the math the same way and said, hey, I'm paying this kid hourly X amount of. And I know he's flagging this many hours, I could work into it backwards too almost and be like, okay, I know he's being productive at X amount.

Do you make more money if you guys sell more cars? If you collect more payments? I mean, you make more money if your performance of your dealership is better. Right?

Sell more cars is questionable from last month. No, I actually made less money last month selling more Cars. So let's talk about that another episode.

But let's talk theory.

I get it.

Theoretically.

Theoretically, you want them to be productive.

Yeah, of course, theoretically, you are incentivized. The better the shop does, the better the dealership does, the better you do. And your collectors sort of the same way. I, I'm very sort of meritocratic in terms of this. I think that the more productive you are, the more you ought to get paid. That's just the market that makes sense. So and so I think that with, with your guy there who's hourly, guy who turns a certain amount of hours, I think that you should reverse engineer it and say, hey, your average over the last 13 weeks, the last quarter, this is what your paycheck has been. So I'm going to guarantee you, I'm going to guarantee you that amount. I'm going to guarantee you that amount. That's your average paycheck. And I'm going to guarantee you that for the next 13 weeks, I'm going to pay you flat rate. And if you want to make more than that, that's on you. I'd be curious to see what you would, what kind of performance you would see after that. I'd be curious, yeah.

What's the checks and balances between speed and quality in that situation? Well, in the past I've had those issues where my guys are flat rate and the quality was horrible. And then I end up having to fire him because I'm like, hey, we're having way too many comebacks. You know, these are issues. This, this, this, this, this. Well, I was incentivizing the guy to be quick. So what do I expect?

Yep. And from, from my, from my perspective, if you're having comebacks, I don't think that that's a system, a flat rate system problem. I think that that tech sucks.

Yeah, it's a tech problem.

It's an integrity problem. So I should have fired him.

Yep, that's right. I think you did the right thing. So I think that sometimes, you know, you've got human resources problems and management problems. And so pay, pay is a function of management. Right. So sometimes people say I've got all these problems. It must be my, my management is not right. Well, you might have a human resources problem, you might have freaking idiots there who either lack integrity, don't know how to diagnose stuff properly, et cetera, et cetera, et cetera. And so because here's the thing again, going back to what the technician, sort of the mindset of an auto Repair tech. He got into this business to solve problems, to fix cars, like from a little boy or a little girl. They were good at fixing stuff, at taking stuff apart and putting it back together. And so do my techs get bummed out? Like literally? I was talking to one of my techs on Friday maybe, and a car had come back for brakes and we had done a throttle body on it a week ago. And he was just kind of moping around out there and I was like, man, what's wrong? And he's like, I just hate seeing these fricking cars come back. I was like, well, this is for a different thing. This isn't a comeback. He's like, I know, but I recommended brakes to them when they were here before and they didn't do it then. They want to fix the problem and never see that car again. And so even a good tech, even when the car comes back for an unrelated repair, they're like, geez, why is this car coming back? And so when a car comes back for a true comeback, a related thing, you don't have to beat up a good tech, man. They already beat themselves up. They hate it. They hate it.

Do you think your service writer or shop manager has to be more knowledgeable than your techs in order to get accurate diagnosis and flat rate and books and bumps and go backs and things like that?

None of, none of our white collar people have ever turned a wrench in their lives. None of us.

So when a tech comes in and says, this thing needs XYZ done and I need an extra 2 hours because of this situation, that's not showing up in Mitchell or All Data. He just trusts them and says, I get it. You're not trying to pad your book. You're not trying to push this deal. I completely believe that this was out of your control and I need to bump you three hours.

That's exactly right. That's exactly what we do. And our name's Integrity. And if we call the customer and sell, hey, we don't break it all down like that for the customer. You know, we just say, hey, hey, you need XYZ repair, and this is what it's going to cost. And they say, oh my gosh, that's way. That's super expensive. Then we start to do our normal sort of engagement. Well, expensive compared to what, Ms. Johnson? Well, gosh, I read on the Internet it was going to be $280. Now you're telling me it's $580? Well, you know, the Internet's crazy. Sometimes the stuff you read, you know, I read that I had brain cancer on there one time and that wasn't right either, you know, so you can't trust everything you read on the Internet and you start to kind of like, you know, unpack what the customer objection is. But yeah, from a tech standpoint, like if, if you've got the human resources side of things, right, and that's a good person who you trust, who you would trust to work on your car then, and they say, hey, I need this more then you trust them. Now with that said, you will find when a tech starts to get selfish, and we've dealt with this, when a tech starts to get selfish and he's had an every time and he's fighting you on every time and he's not trusting that, hey, the book's going to work itself out over the long haul. Like yes, maybe this thing pays 1.6, but the job just sucks.

They always want the upside, they always want the bump. They never want to give back on an overbook.

That's right. And so when you have a tech who's constantly beating you up, that guy is selfish. And so at that point you need to be looking really hard for his replacement because tick tock, tick tock. He's not going to be around for very long. And we've had that happen.

So Michael, do you have, you have all Atex, you have A's and B's. What is your makeup?

Yeah, so right now we've got A's and B's. And I think that's important to have, you know, sort of a blend there, some diversity there because otherwise, you know, you're going to be paying an a tech 30, $35 to do some, you know, to replace a belt that and you, he can. And I'm not, I'm, I'm not going to take that. If he recommended it, I'm not going to take it from him and give it to a btec. That is so unfair to do that.

Sure.

But if a car comes in with a belt squeal diagnosis and you've got a B tech there and an atc, give it to the B tech and let him diagnose it. Even if he says it needs a belt and then you find out later on it also needed the tensioner and he kind of like missed or under diagnoses something. Number one, you've got a little bit of wiggle room because his labor is cheaper. Maybe he's, you know, 24 an hour or whatever it is. 25 an hour. But also that's a positive experience. And you're kind of growing him up into being the kind of tech that you want him to be, you know, down the road. So we like to have a mix like that, you know, and a techs are just so few and far between. Like, it's, it's, it's a necessity, you know, if somebody's kind of good at fixing cars, but they're not the greatest diagnostician in the world. Like, man, you want to come to work every day and you, you, you know, you, you, you could pass a drug test, you know, or whatever. Like, you're, you're in.

So what do you. How do you make the decision when you're hiring someone, what level they are?

Because you ask. Yeah, but I would, I don't ask are you an A or a B tech, but you just ask them, what are you good at? What are you comfortable with, what do you like to do? And just pay attention to the things that, you know, they, they'll tell you. I mean, if somebody says, I like to change this and change that and switch this and switch that, and it's all like, you know, external parts, alternators, compressors, wheel bearings. Like, okay, you're probably talking to a B tech. And a tech does not get off on doing wheel bearings anymore. You know, he likes to chase down something. He likes to solve problems. That's right. And so, you know, you ask him, you know, what are you good at? And that goes back sort of our whole kind of like recruitment and hiring, sort of that whole process for us is very relational. It's a long sort of process, you know, for somebody to come in the door. Because right now we have as many techs as we need right now. But that does not mean that if a tech reaches out to me, I'm not going to go have a beer with him or have dinner with him and start to build that relationship and get to know him, because turnover is inevitable.

So let's talk about that. If I were looking to expand the shop today, where do I find the. Where do I find techs and where do I show? Where do I find them? And how do I explain to them the culture that's going to make them want to come to me?

Yeah. So. And the reason that, you know, we ended up having this. This conversation is because of a post that I made on Facebook, I think, is how Jeff, you know, reached out to me, talking about comparing hiring technicians to recruiting athletes. You know, say you're in. In college football or college basketball world. And I don't want to get too far down the rabbit hole because we'll lose all the people who don't like, you know, college sports. But at the end of the day, recruitment is, is a process and you've got to have sort of a plan in place for that. And so you would never find a dealer or repair shop owner who doesn't do any kind of marketing. And who says, I mean, you'll have people who say, oh, I only do word of mouth. Okay, but that's marketing. You know, you're, you're doing such a good job taking care of your customers that they're doing your marketing for you. If you don't do marketing for your external customers, they're not going to come. And so it's the same for what we call our internal customers, which is how we consider our employees. So the marketing for internal employees is different than the marketing for external employees, but it's kind of the same. You've got to have a process for it. You've got to ask for referrals. So good techs are going to know other good techs. Like that's just the way it is. And if they don't know know each other, they know of each other by reputation. By talking to the tool truck drivers, by working with somebody who worked with somebody. Like the network of techs in any given kind of metro areas is pretty small. And so let's say, you know, I'm going to open a third location tomorrow and I've got a staff up for that. Well, I would never be in a situation where I'm going to open it tomorrow, but say I'm going to open one six months from now. So I'm getting ready to staff up for that. I would be planting the seeds for that today. I mean, I'm already planning the seeds for that even though we don't have a third location ready. So you're talking to your tool truck drivers. Hey, who are the good techs who are out there? And especially if you've got a relationship with your tool truck driver, I mean, I'll go on the tool truck, you know, a couple times a month and I'll just chat out there myself on the snap on truck, on the Matco truck. Who do you know who's good? And especially if you have that relationship, who, you know, who's good, who maybe isn't thrilled with their current situation? You know, we got a really good tech one time because he was a master level tech and his dealer was making him work Every other Saturday. And he was like, you know, I paid my dues already. Like I got kids, I'm not working on Saturdays anymore. He was starting to get irritated about it. And so you know, we had kind of got the heads up on that from the tool truck driver. And so you know, we made the connection because of that. And so the networking part of it, it's just like with your external customers you gotta, you know, good customers know other good customers. That's just a fact of it.

One thing I found is that I can't hire. About a year ago we made a switch at the shop and I decided I wasn't gonna be able to get Atex cause they're just rare. And I decided that A techs don't play well together with other A techs and that they definitely don't play well with a service rider that is a 25 year old. You know what I'm saying? So I switched the shop around and said I'm going to have one Atec papa bear old school dog car guy who's going to run the shop. And then I'm going to have a bunch of little students, little B techs because I can hire those $20 an hour, 22 an hour. And they've got their tools and they're really ambitious and they want to learn. So I basically have an A tech and four little students that are all kind of learning C and B techs, you know, lube guys that I can steal easily. I can offer them a couple bucks more an hour. They're getting paid 12 or 15 at the new car store. I can pay them 20 and I.

Think and they're getting worked their butt off at the new car store and not being treated with any kind of dignity or appreciation and not being educated.

They have, they were promised promotions, they were promised training, they were promised opportunities and never given.

So when they come here, they're stuck in the pit for the next six months and they're like man this sucks.

And they come here, they're like you're going to let me tear down this six zero and rebuild it? Yeah, yeah, I'm going to let you do that with, with my guys guidance. And it's going to take a little bit longer but I think so that's been my philosophy as I'm going to try to get them when they're younger, cheaper and grow them into stronger techs.

And that I think that is, that is a model I think that can replicate. I think that's a model that can replicate because ultimately and see, that's, that's treating the situation as an opportunity and not as an obstacle. I think that's a great model.

The issue, I find, is that it does, it lives and dies on your shop manager atec. Because if he's a good people person and he can teach these kids, if he gets frustrated, if he doesn't want to be there, if he flunks out, if he's misdiagnosed things. Now I'm relying on one A who's got to be the brains of the operation and be accurate as opposed to before, you would get the fight between A's on a diagnosis, but eventually you'd kind of come to the accurate.

We, we don't, we don't, we don't have that problem of the fights between techs because a tech has his, his diagnosis and he does the repair. And so they're kind of like isolated in their own kind of cars and their own kind of worlds. And so, so you don't have two A techs working on each other's cars together. Like, it, like, I'm not going to come in. Luke and I were talking earlier about QuickBooks. I'm not going to come and touch Luke's QuickBooks and Luke's not going to come and touch my QuickBooks, although maybe if Luke did, that would be beneficial for me. But it's like, because. Because what's going to happen is we're only going to mess each other up. Yeah, we're only going to mess each other up. We've got our systems. They're both working. So, like, leave well enough alone. And, you know, and so I think that that is a situation that can cause unnecessary tension, you know, between, between a techs because he doesn't want to feel like this other guy's looking over his shoulder or like talking bad about him or whatever.

But you also don't want your service writer looking over your shoulder telling you what to do. And that's a hard balance because sometimes they do need to look over your shoulder and, you know, so I don't know. The personalities of the A tech are very hard.

It is hard. It is hard. And you've got to, you've got to work really hard at that. I fired, I fired the best tech I ever knew because he was such a diva and such a prima donna and just ruining the culture. I mean, this is, this is the.

Hardest thing to do, right?

He was, he was, he was not the most productive guy, but I mean, really, like, he could find any problem, Any problem. The Best diagnostic tech I've ever met. And, you know, I just, I said, hey, look, you're not happy here. It's obvious you're not happy here, and you're making everybody else unhappy, so I'm gonna have to let you go. And he started crying, and he was like, michael, I'll be happy. And I was like, hey, you know, we've. I've tried. Like, I've really tried. Like, it was emotional for me. It was hard, you know, because I really like the guy. You know, we do have kind of like that sort of family vibe, so to speak. And, you know, it was. It was a gut punch for us, but I knew that was coming. It's already had his replacement lined up and everything. You know, we had another master tech ready to roll. And so, you know, that's. That's what you have to do sometimes because of the vibe aspect of it.

Let me ask you a couple of rapid fire questions. We wrap this up. I could talk this a long time because obviously, I think for all of us is a big situation. You know, it's a huge bottleneck for me. I've got. It's 20 cars out front, and I've got 60 cars in the back waiting to get recon. It's just like, I've always had a bottleneck. I'm never not.

Let me get. Let me give you one analogy before we get into the rapid fire, Jeff. And because it is the bottleneck. And I'll go back to sports again. And everybody, everybody knows what's going on in the NFL with quarterback salaries. Quarterbacks used to make, you know, 10% of the salary cap for every NFL team. Now they're making, like 28% of the salary cap of an NFL team. Because the NFL teams have figured out that whether you have a good quarterback or not is the only factor of whether you're going to be a winning team or not. Like, if you. If you have a great quarterback, you've got a shot. If you don't, you have zero shot. Zero shot. There's. There's. And so values change for different roles in the sports world over time. Same in this world. Values change over time. And, you know, we rehired a guy recently and for. For more than what he was making when he worked for us a year and a half ago and significantly more. And my business partner and I were kind of talking about, you know, how much we were going to pay him, and we were talking about a certain quarterback in the NFL who I don't want to make any Enemies. So I won't, you know, name the quarterback, but who is a slightly above average quarterback who's getting paid. Like, he's a really good quarterback. And it's like, that's really expensive. But what's more expensive is not having that guy. And so we're in an arms race for technicians. And so what my sort of philosophy is on this is, yes, it's expensive to have really good techs, but it's even more expensive to not have them. Yeah.

And to not have decent ones, you know, those bad ones can cost you a lot of money from angry customers and misdiagnosis and. And Luke and I talk about this all the time. It is a shift where the rock stars at your car dealership have always been your salesman. Right. They make the big figures, they make the big checks. And it's like. And then we're underpaying our tax, we're underpaying our collections people. It's like, no, those are the people that make you the money, you know?

Well, that's right. And the shift is happening. That's right. Because the market moves, it adapts. And so in football, that's what's happened, is it's become a passing game. You know, running backs used to be valuable. Running backs aren't valuable anymore in football because it's a passing game now. And with us, sales is happening online more and more and more and more and more. And so those salespeople, not that salespeople aren't valuable, but they're not what they used to be. You know, with the Carvanas of the world, and not just Carvana, but just the entire Internet moving towards the Amazon model of. I'll read the reviews, I'll make my decision, I'll be educated, and I'll come in. And you're not a salesperson at that point. You know, you're basically an order taker. And not to devalue the salespeople out there who are great at what they do and all that, but the market does move. And so being responsive to that over time. You're right. When you've got 20 on the front line and 60 in the back, I mean, how much is that costing you compared to paying a tech? $3 more per hour than what you think is right or fair. And because the thing is, especially if you're paying flat rate, that $3 per hour is an hour that he turned that is making you money.

Yeah. It's not like they're standing around.

Yep, that's it. That's it.

Getting that car to the front line faster. Right, Luke, Time to line up.

And. And on the service department side of things, just raise your rate five bucks to compensate for that. Three bucks. I promise you, you will not get any pushback. I promise you, you will not get pushback on that.

Yeah. What do you see as a typical labor rate?

It varies regionally. What? Yeah.

100 bucks.

No. No way. Way. I mean, we're like 125 right now. Want to be 130, dude. Days of sub 100 labor rates. That's gone, man.

Let me ask a bunch of questions then. So, so many things go through my brain. I want to fit these in. Or maybe we need a whole new episode. But I do see the day where you talked about Carvana, Carmax, whatever, vroom. Delivering cars. My dealership may someday just be a service center. I get that. Like, maybe they squash all the independents. They consolidate us all out. I better make sure I've got a pretty strong service center here, because that might be the only way I make money in the future, is just by servicing these cars that carbon is dropping off at people's houses. Making that money and charging that rate. I think you justify it with the experience. I mean, I'm not going to roll into Bob's grease hole and pay $120 an hour to sit on a fricking wire spindle and whatever. So I think, and I've always said this, I think there's the opportunity for the new car store meets, meets used car, Fixed ops meets Instagram meets. You know, I see your background. I imagine your shop is probably pretty hip and can attract those soccer moms that maybe want the dealer alternative.

This is. This is my background in my bunker. Upstairs, Downstairs. Downstairs. It feels. It's nice. It's nice. And it is. And it is hip. And I think that the soccer mom is a great analogy there. You want. You want somebody. You want to be a place where people can feel comfortable. And if you read our reviews, you've got so many reviews of people saying, literally, you start their review by saying, as a woman, I felt so valued. And so, yes, yes, the things that you're talking about of the actual, like, physical place are important. That's expensive. What's cheap, though, is that Grease Bob's is not going to talk to Mary Catherine, the soccer mom and her Honda Pilot, the same way that my guys Craig and Ricky and Morgan are going to talk to Mary Kathryn, because Grease Bob isn't going to take the time to explain stuff to her to make her feel Valued to make her feel like she's a part of the process. Because she is. Ultimately, it's her car, it's her budget, it's her decision. And so, so those soft things are cheaper and easier to implement in the short term to build that value for the customer.

Do either of you guys offer bonuses to bring guys over? Whether it's a cash bonus after 30 days or a tool bonus or anything like that?

Yes. Big fan of signing bonuses. And if you've got a tech who is in a good spot but who wants to make the jump, that signing bonus can be the nudge that makes it worth it for him. You know, he's thinking about, man, well, I might miss a paycheck on like the in between, you know, and like a lot of times if guys are going to come over, they'll take a week off in between, Just kind of like to chill out a little bit. And so if you offer a $3,000 or $5,000 signing bonus, that's the nudge that, that people need. And. But woo. But woo compared to what? Compared to not having that guy.

You know, I like your attitude. I like that.

Michael. What, how do you structure that and how do you make sure they stay?

Yep. So half is payable immediately. First, first paycheck. I'll give it to them the first day if they want to. But first paycheck, like, not first paycheck, first Friday. Like, so you start here on Monday. Normally you wouldn't get a paycheck till the following Friday, but on that Friday you're going to get half of whatever that signing bonus is on that Friday.

Okay.

Then the other half will be after 30 days, which is super quick. But then they sign, they sign a contract that, an employment contract that, that entire bonus is prorated over 12 months. So if they leave before 12 months, they owe me the remainder of that back.

And you can hold a paycheck.

Yep. And never, never had that happen. Super interesting. Never had to deal with that. Really what it is, is I know that in 12 months I'm going to make way more than that three or five grand off of them. And so, you know, that's, that's what it comes down to. And honestly, when we've sent, when we've sent advisors or managers, you know, out of town for like a week long training or whatever, and it's like a 5 or $7,000 investment in their training, we'll have them sign a contract for that. We're saying, hey, we're making a 5 or $7,000 investment in your resume so you look better for your whole career. So we want you to sign a 12 month contract that you're going to pay us this money back if you leave inside of 12 months.

Yeah, I like that idea. I didn't never even thought about that because everyone's so scared of oh, what if they leave after three months and I've fronted all this money?

Then that, then that means that your place sucked to start with. Like that's what it comes down to. I mean, because if your place is so great, then why do they, why do they leave the places?

Yeah, they're not jumping just.

Yeah, no, absolutely not. Dude. These, these boxes, these techs have are enormous. You know, they, they come here on a flatbed like on a tow truck. It's, it's a pain in the neck to move those things around and they're not doing that for three grand.

Is it a fact that the size of your box does not directly translate to your abilities?

Not directly, but there is definitely some correlation there because yeah, it starts to.

Taper a little bit at the, when it drives itself.

Here's the. Yeah, exactly. If it has a steering wheel, then you know you're overcompensating for something. Okay. But you know, if you've spent 100 grand on tools, you know, over a 15 year career or whatever, you're the real deal, you're good.

Yeah.

And if you, if you believe in.

Yourself enough to spend that money, you're good.

Because what you're buying with that is not tools. You're buying efficiency with that. Right. And so that, so you deserve to.

Get rewarded the right tool for job, you're saying?

Yep. So you deserve to do a two hour job in 40 minutes and have nobody look at you that you just paid, you just got paid $70 to do a two hour job in 40 minutes. Good for you. You bought a $500 snap on tool to do that.

I hear about these new car stores that do 24 hour service or weekends and things like that. Like whether you, they're going to pick your car up at 5 o' clock when you get home from work and they're going to drop it back off at 9am when you go to work. Does the independent have the ability to be that customer friendly, to be open at night, to be open on the weekends?

Is that I fantasize about having a second shift, you know, especially in the summer when we're so swamped. Like I fantasize about it also just because in the summer it's freaking Hot outside, you know, and so, and so, you know, it'd be nice.

And like you said, you got fixed cost. What's it cost to have the lights on?

Nothing. Exactly. I fantasize about that. The problem is it's just like with the Master Tech Week guide who's working every other Saturday. As soon as you add another hour, you're one guy calling out away from one of your main guys having to fill in on a day that he did not sign up to work. And so, you know, we're not even open on Saturdays as a service center, as repair shops. We are Monday through Friday, 8 to 6. So we're open 50, 50 hours a week. We're open and our guys work our techs, not our managers or our white collar folks, but our techs work a 40 hour shift within that 50. Now some, some of them will come in a little early to get started a little earlier. Some of them will stay a little late to finish something up, you know, but they're scheduled either like 8 to 4:30 or like, you know, 9 to 5:30. And so no Saturdays. We're not even open on Saturdays for the repair side of things because, and this is what I tell people, so many people will call and say, hey, can you fit me in on Saturday? And I'll just be honest. People on the phone like, ma', am, you don't want to be here on a Saturday. Like you don't want to be here on Saturday. We don't want to be here on Saturday either. Like our techs are going to be better on Monday if they're off Saturday and Sunday. That's a big, it's a big perk, man. It's a big perk for these guys who are busting their butt physically. You know, we've got I think probably 10, 10 or so paid holiday days a year. Like you know, whether that, I mean we're closed Thursday and Friday for a black Friday. So that's a four day, you know, when Christmas is on, say Christmas is on a Thursday, we'll be closed Thursday, Friday, Saturday, Sunday. I mean we've got 10 or 11 paid holidays a year and they get paid, the techs get paid eight hours at. Now this is the way it's set up at their lower of their tier one or tier two pay. They get paid eight hours at that tier one on a day that we're closed. Yeah. And so again, those are the, you know, the perks that make it worth it to come be here. Sorry I interrupt your rapid fire. I don't do rapid fire because I rant too much. I apologize.

No, no, that. That lot of. That's just because I have too many questions.

Yeah. But I'm really passionate about this because at the end of the day, I feel like a lot of techs get treated like garbage. Like the new car stores and just the old school way of doing things. Like, the techs are at the bottom of the hill, and you know what they say about crap and where it rolls. And so, you know, it's like they just get treated so poorly, and they get told over and over again that, oh, you're disposable. Oh, you're just a grease monkey, you know, whatever it is. And it's just nonsense. Like, it's just not true. And so I'm really, really passionate about treating those guys with the respect and the dignity that they're extremely valuable Skill level not just deserves but requires, you know, in. In the current situation. Yeah. Very good.

I think that's a great place to wrap it up, Michael. I'm going to save all my questions for either offline or we'll do this again. Sometimes.

Sometime, but we'll do it again.

Jeff, man, I love you guys, and I'm so appreciative, you guys. I mean, literally, I heard about Buy Here, Pay Here in the first of March. I had listened to every one of you guys podcast within, like, three weeks and was all in on doing it, you know, within three weeks. So you guys have been a blessing to me. So I appreciate y'. All.

Yeah, thanks, Michael.

Appreciate it.

Listen to Luke and you'll be bankrupt in three weeks, too.

So I can hardly wait. I'll fix my way out.

That's awesome. All right, Michael, thanks for your time.

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