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From: Lance (Ever Increasing Costs of Labor and Need for Retention of Key Employees)
Date: 30 Dec 2003
Time: 20:51:17
We have been studying the labor rates of Oil, Lube and Filter Quick Lube Facilities and we are finding that the pay is lower than you might expect. We alos believe this is part of the problem with recruiting and retaining key employees. The average employee at a Quick Lube is a little under $7.00 which is lower than you would expect and certainly lower than the customer is thinking you are paying. This maybe why the average employee only stays employed about 1.8 years and then leaves for greener employment. A recent survey shoed us that the pay was actually $7.75 and the average employee stayed on 2 years, this is not what we found in our survey talking to people in the business. Of course in our survey we did factor in Wal-Mart quick lubes which so many in the industry deny their existence even though they command over 11% market share and growing at 2% per year, we expect by 4% per year by 2005. The average Manager in the Industry is being paid $32,519.00 yearly from an ASO Magazine and NOLN-National Oil and Lube News. The average manager is staying about 4 years. But we think these numbers will change as competition continued to increase and we are predicting 980 new Oil and Lube buildings to be erected and start business by End of Year 2004. We have seen in the Pharmacy Business where companies compete for top managers and this will continue into this industry. Lube owners in the same survey showed that they took draws of $54,835.00 which is most likely going to be higher in 2004 judging by the upward trend. Although we saw 440 Lube Companies withdraw from the market in the past 6 months. Mostly due to being too close to Wal-Mart, Lawsuits and employee issues. Which is why this article is a wake-up call. The average in the mobile oil change and on-site fleet oil change business is about $10.00 per hour with incentives. Managers of crews when teams are involved are usually $15.50 per hour plus incentives and average then about $42,000 per year on an annual basis. Owners of mobile units appear to be taking home much less than their fixed site competitors. Although those with many units seem to be doing a higher profit margin over all. One gentleman in Oklahoma City area told us he did 1.2 million per year with five units and cleared 200K. We have not verified this information in a recent phone call. Another we talked to out of El Paso with five mobile units said he had beaten the city's new ordinace to prevent on-site maintenance and then conviniently call mobile on-site oil changes for fleet vehicles on-site auto repair which triggered a citation from the city code enforcement. Of course it was a fixed site competitor who turned them in. Now that fixed site competitor was listed in the paper for causing the controversy and his busines is now half. We think this is very apropos and will also attack any good ole' boy insider who attempts this tactic against our team. We will literally take them out if nothing more than a simple example of why you do not play politics with us. This gentleman in El Paso used this same tactic and destroyed that company who turned him in. Too bad? But in the end if we look at this from a realistic stand point the mobile service was more efficient in the market place and used this efficiency to pay higer wages and give better service "We come to you" approach is much prefered by consumers nearly 4 to one. Eventhough there is no waiting in line, some customers about 23% prefered fixed locations because they never had to make an appointment or because they would be shopping (I.E. Wal-Mart). The customers are saying that in the fixed sites they question the labor there many times. Women say that the guys make comments which are somewhat questionable and semi-unappropriate, nothing that you could put your fingure on, but they said at first the flirting was okay, but it gets old after a while and many said they were not interested in going back again? One said that an employee she knew from around town was known to have been running with a bad crowd. We found these comments interesting because in a survey in http://www.NOLN.com it was found that 95% of Oil Lube Sites did in fact do some background checks and in 33% of the case they also did drug testing. In places like Las Vegas, NV and Billings, MT and Miami, FL and Detroit, MI most of New England States and WA and OR they nearly all did research into the persons drug habits. Although some admitted to us in Las Vegas "If we never hired anyone with a drug problem, we couldn't get any technitions?" We did not comment because there are plenty of Filipinos and Mormon Families which were very unlikely to have been involved in the drug scenes. It seems that we can understand the problems, maybe the issue is with the pay. Find good people and once they prove themselves ask them for names of friends and start hiking up their pay to something that will yield you a better retention rate than 1.8 to 2 years. We were shocked to find also that the average company spends over 25 hours per year in formal training. If you are going to spend that kind of money and you really need to, then you need to get a return on that money. Also realize that if you do not put in the training time, God help you when the OSHA guy comes by and asks one of your employees if he knows where the safety information is? Employee Retention will continue to be an issue and labor expenses will continue to go up because there is a shortage of experienced technitions and with an expanding up cycle hits the automotive sector there are sure to be issues with finding good people to do all the work. Any comments email me at: Lance@carwashguys.com http://www.CarWashGuys.com
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