Anticipate Changing Job Markets – The second “A” in GARAGE Plan.
As a nation, we’re currently just above a 3% unemployment rate…meaning that only 3 in every 100 people are currently looking for work. Easy math but kind of a crazy stat when you think about it. You only have to look back to 2010 to find an unemployment rate of almost double digits (9.7% in January of 2010). Things change fast.
This can be easy to ignore when business is great and it’s currently great for the majority of shops that we deal with on a daily basis. However, you are starting to hear more and more about an economic correction coming in the next few years and our business is no different than all of the others in that you need to be prepared.
If 2008 taught us nothing, it taught us the heartache and hardships an economic collapse can have on businesses and families. It made us question the certainties we thought existed prior to that time period. It was flat out hard.
In our industry, we feel like we’re shielded from this for the most part. There has been a constant need for Mechanics and Techs for the last decade. The demand has far outnumbered the supply and it’s allowed for Techs to be picky about opportunities. I’m certainly not saying that this is about to change but it’s inevitable that we’re going to shift at some point in the future. Everything is cyclical and the current strong economy is no different.
Based on what I’ve heard from people from the financial sector, we can expect some form of market correction in the early 2020’s. The scary part is that the early 2020’s start exactly a year from this week. That’s crazy talk! Time has a way of sneaking up on you and this is no different.
So, what are you doing to prepare? For those of us that were exposed to the Dealership side in the late 2000’s, we understand the importance of absorption rate. For those of you not familiar with the dealer side, this simply means that you can pay your companies bills with the service and parts departments while using the revenue generated from the sales department as the icing on the cake. Absorption works really good in down markets because you’re typically not selling as many units as you normally would but they still need maintenance. Will they scale back in use? Sure…but there always seem to be a demand for Service Technicians.
For the sake of this conversation, I want to discuss the opportunity that lies in front of you right now. Right now is the perfect time to lay out your plan for the possibility of a market correction. Are you going to get aggressive and go after Techs while others get buckle down and get conservative? Will you continue to give your staff consistent raises when profits potentially thin out? What have your patterns been in other times that things have slowed up?
Everybody has a different situation and I can certainly appreciate that. What doesn’t change is your need to have a game plan when the economy starts to change. Have an honest conversation with your Management team and put a game plan in place right now so you don’t have to panic when things actually do take a turn for the worst.