War for TalentBy Mike Schmidt, AEM Industry Advisor Editor

The problem is a simple one to understand.

An ongoing shortage of technicians is costing equipment dealers approximately $2.4 billion in lost revenue. Meanwhile, the average job turnover rate for millennial employees is five to seven years, and the average time required to train new technicians is approximately five years. 

“At the end of the day, if we have a shrinking pool of candidates being willing to work less hours at higher turnover rates, we really don’t have enough skilled technicians,” said Diane Benck, vice president of operations for West Side Tractor, an authorized, full-service construction and forestry equipment distributor in Illinois, Indiana and Michigan.

Benck discussed the skilled labor shortage currently facing equipment dealers – and provided insights into what can be done to recruit, train and retain quality technicians – with attendees at AEM’s Annual Conference, held late last year in Marco Island, Florida.

“I know everyone is well-versed on the technician shortage problem, but it certainly one that hasn’t gone away,” explained Benck. “I think especially in the last year I’ve heard from a lot of large customers that they were waiting a week or more for service calls. And that was from the largest dealers to the very smallest out there.”

Again, the skills gap isn’t a difficult problem to understand. What it is, however, is a difficult problem to solve.

The Workforce of Tomorrow

As millennials and Generation Z become a greater percentage of the skilled workforce over time, older generations employed at positions of seniority within the industry need to adjust the ways in which they manage these employees.

According to Benck, younger generations – and particularly millennials – possess certain expectations regarding their jobs, including:

  •  Seeking more open relationships with managers
  •  Thinking creatively
  •  Working collaboratively
  •  Focusing on career paths
  •  Expecting training
  •  Placing greater emphasis on organizational culture
  •  Valuing flexible work arrangements that result in work-life balance
  •  Seeking experiences and valuing travel
  •  Expecting a diverse workforce

These common expectations manifest themselves in a few specific (and problematic) ways for Benck and West Side Tractor. For example, one common one is technicians being hired often express a desire to stay on the job “for a while.” Translation: New hires don’t want to be career technicians.

“And it puts us in an even worse position, because we’ve relied so heavily on technicians we’ve employed for 20 or 30 years, ones who understand both old and new technology,” said Benck. “And if we don’t stop turnover possibilities with millennials, we have a worse problem ahead of us.”

 “At the end of the day, if we have a shrinking pool of candidates being willing to work less hours at higher turnover rates, we really don’t have enough skilled technicians,” said Diane Benck, vice president of operations for West Side Tractor. 

 

In addition, young technicians – in general – often possess a strong desire to be promoted regularly, said Benck.

“We’ve brought a lot of levels into our organization, but 40 percent of our total workforce is technicians, so there’s only so much we can do with that,” she added.

Steps the Industry Can Take

So, what can be done? Quite simply stated, the equipment industry must be more efficient and effective in their employee training efforts.

According to Benck, doing so requires:

  • Getting people “up to speed” faster
  • Embracing a proactive attitude toward employee recruitment, training and retention
  • Placing a greater emphasis on company culture

“One of the questions we always ask new employees is “Why did you come work for West Side Tractor?” said Benck. “Well, universally the answer has something to do with our culture. It has nothing to do with “Well, I want to be a John Deere tech,” pay, or benefits.  So we really have to start thinking a lot more about our human resources initiatives and what else is going on within our organizations in order to keep technicians happy and satisfied.”

Diversity Pays

Organizational diversity is also critical to closing the skills gap and being able to recruit, train and retain technicians. It also pays financial dividends to companies willing to embrace it. According to a Boston Consulting Group survey of 1,700 organizations, “increasing diversity of leadership teams leads to more and better innovations and improved financial performance” resulting in 19 percent higher revenue due to innovation. Furthermore, according to a McKinsey and Co. survey of 366 public companies, the “top quartile” for ethnic and racial diversity in management were 35 percent more likely to have financial returns above the industry mean.”

For West Side Tractor, diversity is a significant organizational priority. One-third of its upper management team is female. Some are even employed in non-traditional roles, such as outside product support sales and service manager. And while the company doesn’t have any female technicians yet, it’s definitely on the horizon.

“Ultimately, what it takes is role models,” explained Benck. “And what we’ve learned from the next generation is we have to make accommodations for them. And if we make accommodations, they can still be successful and productive members of the team. And so, we learn from taking care of our own family, and we’ve taken a lot of those principles and passed it along to our other employees.”

In short, diversity has made West Side Tractor a better company because it has led to more diversity in hiring. If an employee stands out as being different from the crowd, he or she will tend to champion others who aren’t the norm.

“It was rampant in our company that nobody wanted to hire someone who didn’t possess significant industry experience,” said Benck.

And when that’s the case, she explained, a company like West Side Tractor simply keeps attracting the same types of candidates again and again, rather than increasing the pool of qualified employees.

“People at our company have really championed hiring someone different, especially women,” continued Benck. “However, it’s really been all employees – men and women – who are proud of our inclusive culture and enjoy working in a more diversified atmosphere.”

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