WO R KS H O P ST U DY 2020
PREPARED FOR: Lesley Yates, AAAA PREPARED BY: ACA Research, April 2020
1
OBJECTIVES AND METHODOLOGY
CONTENTS
2
SAMPLE
3
7 8 9
BUSINESS PERFORMANCE
4
BUSINESS SENTIMENT
5
EMPLOYEE PROFILE
6
S TA F F R E C R U I T M E N T S TA F F R E T E N T I O N
GOVERNMENT INTERVENTION
SUMMARY
OBJECTIVES AND METHODOLOGY
OBJECTIVES
S T R AT E G I C O B J E C T I V E To a s s e s s M e c h a n i c s ’ sentiment in relation to workshop performance and management, and explore workforce practices and trends in the Australian automotive market.
4
METHODOLOGY Our overall research approach remains consistent with previous iterations RESEARCH METHODOLOGY
SAMPLE
N=201 WORKSHOPS
KEY SEGMENTS
• LEADERS • BUSINESS AS USUAL
Sample was sourced from CATI telephone interview
5
• AT RISK
SURVEY METHOD & TIMINGS • 20-minute CATI telephone interview • 26th February – 9th March • Quotas were set to ensure a representative spread of workshops across states. • Data has been weighted by number of bays per workshop to allow for accurate year on year tracking
SAMPLE
SAMPLE In line with anecdotal feedback, we are seeing a clear downward trend in vehicle servicing volumes in 2020
WORKSHOP TYPE 88% 85% 84%
2018
2019
2020
N U M B E R O F V E H I C L E S S E RV I C E D / R E PA I R E D I N L A S T MONTH 2018
2019
2020
28% 21%
7%
Independent Mechanic
10%
9%
Chain
6% 7% 1%
3%
5%
Specialist
4%
1%
10%
21% 21%21%
20%
15% 10%
15%
Mobile Mechanic
11%
9%
1-20
20-39
40-79
80-119
39% 41%
2019 38%
2020
45% 43%
65%
65%
120-159
160+
2018
2019
2020
63%
24%
16% 16% 16% 11% 0%
23%
S H A R E O F S TA F F 2018
3%
20%
18%
1%
S E R V I C E B AY S
42%
22%
13%
23%
24%
14%
0%
0
1-2
8
3-4
5+
Qualified mechanics
Apprentices
Base: 2020; n=201. 2019; n=202. 2018; n=250. 2020 data weighted. S1. Is your business primarily‌? S2. How many vehicles did your business service or repair in the last month? Q1. How many service bays do you have at your workshop? Q2. Including yourself, how many staff are employed at your workshop
Administration
BUSINESS PERFORMANCE
NUMBER OF VEHICLES SERVICED We can see a clear downwards trend in the number of vehicles being serviced, reflecting the increasingly competitive nature of the marketplace; looking to the future these predictions will also be further impacted by COVID-19 CHANGE IN NUMBER OF VEHICLES SERVICED PER MONTH IN LAST 12 MONTHS
NET CHANGE
-5
+22
+17
38%
44%
-10
+7
EXPECTED CHANGE IN NUMBER OF VEHICLES SERVICED PER MONTH IN NEXT 12 MONTHS
NET CHANGE
+42
-6
34%
21%
2018
2019
43%
48% 48%
Decrease
11
Stayed the Same
25%
2020 Increase
+16
34%
44%
45% 22%
-20
32% 48%
41%
+36
6%
8%
2018
2019 Decrease
Stay the Same
18% 2020 Increase
Base: 2020; n=201. 2019; n=202. 2018; n=250. 2020 data weighted. Q5. Would you say that the average number of vehicles you service per month has increased, decreased, or stayed the same, compared to the previous 12 months? Q6. Looking ahead 12 months, would you say that the average number of vehicles you service per month will increase, decrease, or stay the same?
WORKSHOP SEGMENTS METHODOLOGY Past and projected growth are used to split the market into three groups: ‘Leaders’, ‘Business as Usual’ and ‘At Risk’ THE SEGMENTS
Change in number of vehicles serviced per month in last 12 months
INCREASE
Expected change in number of vehicles serviced per month in next 12 months
12
STAYED THE SAME
INCREASE
LEADERS
STAY THE SAME
BUSINESS AS USUAL (BAU)
DECREASE
AT RISK
DECREASE
Q5. Would you say that the average number of vehicles you service per month has increased, decreased, or stayed the same, compared to the previous 12 months? Q6. Looking ahead 12 months, would you say that the average number of vehicles you service per month will increase, decrease, or stay the same?
CHANGE IN WORKSHOP SEGMENTS Given changing market sentiment, we’re seeing further growth in our At Risk segment, as many workshops ‘feel the pinch’ PROPORTION OF BUSINESSES IN EACH SEGMENT
LEADERS
BAU
AT R I S K
2018
2019
2020
2018
2019
2020
2018
2019
2020
33%
27%
19%
44%
50%
49%
22%
23%
32%
15
Base: 2020; n=201. 2019; n=202. 2018; n=250. 2020 data weighted.
W O R K S H O P C A PA C I T Y This is also reflected in workshop utilisation, with BAU and At Risk both recording declines year on year; on the other hand, our Leaders appear to have both maintained volumes and reduced the proportion operating at maximum volumes – this suggests many have successfully added capacity year on year W O R K S H O P C A PA C I T Y ALL
% AT FULL CAPACITY
28%
LEADERS
12%
82%
BAU
39%
18%
29%
87%
84%
83%
75%
AT R I S K
14%
77%
15%
7%
72% 65%
AVERAGE WORKSHOP CAPACITY
2019
16
2020
2019
2020
2019
2020
Base: 2020; n=201 (Leaders n=34, BAU n=102, At Risk n=65), 2019; n=202 (Leaders n=54, BAU n=101, At Risk n=47). 2020 data weighted. Q9. On average, what proportion of maximum capacity does your workshop run at each month?
2019
2020
SERVICING TRENDS As we’ve seen previously, the success of our Leaders is underpinned by their ability to generate business from customers with vehicles in warranty SERVICING WITHIN WARRANTY
LOGBOOK SERVICING
BY SEGMENTS
BY SEGMENTS
NET CHANGE
0
40
6
-33
NET CHANGE
9
28
17
24%
28%
27%
11% 24%
24%
-16
16%
46% 44% 52% 52%
58%
61%
63% 72%
48% 44% 32%
24%
18%
15%
6% ALL
LEADERS Less of these
18
BAU
No change
AT RISK More of these
10%
ALL
LEADERS Less of these
Base: 2020; n=201 (Leaders n=34, BAU n=102, At Risk n=65). 2020 data weighted. Q4. What trends are you seeing in your workshop in terms of the types of vehicle or service you’re being asked to undertake?
BAU
No change
AT RISK More of these
FEMALE CUSTOMERS With workshops across the board also more consistently focussing on increasing the number of female customers using their services % AGREE
ALL
“ W E WA N T TO INCREASE THE NUMBER OF WOMEN USING OUR WORKSHOP”
19
LEADERS
BAU
AT R I S K
2020
66%
68%
65%
68%
2019
59%
63%
60%
53%
Base: 2020; n=201 (Leaders n=34, BAU n=102, At Risk n=65), 2019; n=202 (Leaders n=54, BAU n=101, At Risk n=47). 2020 data weighted. Q21. Which of the following statements apply to your business? % AGREE
BUSINESS SENTIMENT
MARKET SENTIMENT In addition to the At Risk segment increasing in size, one third of these workshops are concerned about their ongoing viability; while workshops are somewhat insulated from enforced shutdowns given their (current) status as essential businesses, there is an inevitably challenging year ahead % AGREE
“IF BUSINESS DOESN’T IMPROVE OVER THE NEXT 12 MONTHS, WE WILL N E E D TO C O N S I D E R CLOSING DOWN”
33% LEADERS BAU AT RISK
12%
18%
22
Base: 2020; n=201. 2019; n=202. 2018; n=250. 2020 data weighted. Q21. Which of the following statements apply to your business? % AGREE
10%
KEY BUSINESS CHALLENGES With staffing challenges the single most consistent issue across all workshops; Leaders are then more cognisant of the administrative elements of business operations, while At Risk workshops appear to be navigating a much broader range of challenges KEY BUSINESS CHALLENGES =5% ABOVE/BELOW AVERAGE
ALL
LEADERS
INDUSTRY
Attracting and retaining good mechanics
58%
Increased cost of parts/ overheads
55%
Keeping up with new vehicle tech
55%
Competition from other independent mechanics Competition from chains (e.g. MyCar and Midas)
16%
BUSINESS
Ability to finance new workshop equipment Running regular marketing campaigns
OEM
ECON.
Slow economic climate Falling value of the AUD
Competition from Manuf. dealer workshops
24
26% 8%
25%
24% 42%
14%
Base: 2020; n=201 (Leaders n=34, BAU n=102, At Risk n=65). 2020 data weighted. Q10. Which of the following business issues do you find most challenging in your workshop?
38%
32% 28% 44%
27%
26% 6%
31%
30%
38%
28%
25%
39%
15%
51%
OEM’s offering lifetime capped servicing
40%
38%
22% 18%
17%
60%
42%
49% 29%
7%
30%
66%
58% 14%
39%
55%
53%
54%
41%
Keeping up with business tech
59%
42%
0%
Keeping up with business regulation
Performing day-to-day admin
60%
4%
9%
AT RISK
BAU
70% 31%
40% 25%
54% 36%
J O B P R O F I T TA R G E T S This will partly be an outcome of the fact that just under a third At Risk are actively monitoring and pursuing profitability targets, compared to two in five BAU, and more than half of our Leaders; it is important to mention though that we see usage of metrics continue to grow across the sector AV E R A G E TA R G E T
% W I T H A TA R G E T
ALL
2020
LEADERS
41%
BAU
58%
41%
AT R I S K
31%
41% 2019
2018
33%
21%
25
43%
28%
33%
15%
23%
13%
* Sample size under n=30. Base: 2020; n=201 (Leaders n=34, BAU n=102, At Risk n=65), 2019; n=202 (Leaders n=54, BAU n=101, At Risk n=47). 2020 data weighted. Q7A. Thinking now about the performance indicators used to measure your workshop’s performance, what is your target for‌? - Job profit margin
C H A N G E I N P R O F I TA B I L I T Y I N L A S T 1 2 M O N T H S Leaders are also more confident in their future profitability; we can safely assume that their tighter grasp of financial metrics is a key input into this process 1 2 M O N T H C H A N G E N P R O F I TA B I L I T Y ALL NET CHANGE
LEADERS
+4
+1
34%
32%
+48
59%
+46
2019
2020
+2
+5
28%
29%
30%
22%
11%
16%
2019
2020
-35
17%
17% 31%
47% 62%
26%
24%
2019
2020
M O R E P R O F I TA B L E THE SAME L E S S P R O F I TA B L E
26
-45
21% 47%
31%
30%
AT R I S K
62%
37%
36%
BAU
Base: 2020; n=201 (Leaders n=34, BAU n=102, At Risk n=65), 2019; n=202 (Leaders n=54, BAU n=101, At Risk n=47). 2020 data weighted. Q8. Looking at the last 12 months, how did business profitability change?
2019
52%
2020
L A B O U R U T I L I S AT I O N TA R G E T S Looking at productivity, we see a greater level of consistency across workshops when it comes to their usage of labour usage targets; on average however, they are expecting to lose a quarter of paid time to wastage AV E R A G E TA R G E T
% W I T H A TA R G E T
ALL
2020
41%
LEADERS
BAU
42%
AT R I S K
40%
43%
72% 2019
2018
39%
16%
27
54%
22%
33%
13%
34%
16%
* Sample size under n=30. Base: 2020; n=201 (Leaders n=34, BAU n=102, At Risk n=65), 2019; n=202 (Leaders n=54, BAU n=101, At Risk n=47). 2020 data weighted. Q7A. Thinking now about the performance indicators used to measure your workshop’s performance, what is your target for‌? - Job profit margin
EMPLOYEE PROFILE
DIVERSITY OF MECHANICS AND APPRENTICES Across the board, we see that most workshops have older staff on their books, with mechanics over 50 making up almost half of the At Risk workforce; on the other side of the equation, Leaders (and to a lesser extent BAU) are more likely to employ mechanics from diverse backgrounds % O F W O R K S H O P S C U R R E N T LY E M P L O Y I N G QUALIFIED MECHANICS: ALL
FEMALE
NON-CITIZEN/ RESIDENT
NON-ENGLISH NATIVE SPEAKER
2%
6%
BAU
10%
11%
13%
14%
14%
67%
3%
30
62%
2%
AT R I S K
2%
8%
AGED 50+
INDIGENOUS AUSTRALIAN
LEADERS
APPRENTICES: LEADERS
BAU
AT R I S K
1%
FEMALE
0%
4%
2%
6%
4%
NON-CITIZEN/ RESIDENT
0%
4%
2%
5%
NON-ENGLISH NATIVE SPEAKER
0%
4%
2%
6%
AGED 50+
0%
0%
0%
0%
INDIGENOUS AUSTRALIAN
0%
0%
2%
0%
12%
66%
4%
ALL
73%
1%
Mechanics aged 50+ make up an average of 41% of a workshop’s qualified mechanics. (Leaders = 31%, BAU =42%, At Risk= 47%)
Base: 2020; n=201 (Leaders n=34, BAU n=102, At Risk n=65). 2020 data weighted. Q3. How many of your employees are…?
R E C R U I T I N G S TA F F Reflecting their less diverse workforces, At Risk are most likely to place overseas mechanics in the ‘too hard’ basket % AGREE
44%
43% 49%
LEADERS
LEADERS
BAU
BAU
AT RISK
AT RISK
43% “It’s too hard to get overseas mechanics up to speed with our needs”
31
32%
56%
32%
Base: 2020; n=201 (Leaders n=34, BAU n=102, At Risk n=65). 2020 data weighted. Q21. Which of the following statements apply to your business? % AGREE
45% “It’s too hard to find overseas mechanics with the right skills”
AT T R A C T I N G A N D R E TA I N I N G S TA F F Similarly, Leaders and BAU are almost twice as likely to consider ‘second chance’ employees such as ex-offenders % AGREE
42% 46%
WE OFFER “SECOND CHANCE JOBS” (E.G. TO EXOFFENDERS/PRISONERS)
32
26%
LEADERS BAU AT RISK
41%
Base: 2020; n=201 (Leaders n=34, BAU n=102, At Risk n=65). 2020 data weighted. Q21. Which of the following statements apply to your business? % AGREE
STAFF RECRUITMENT
CHALLENGES Focussing now on workforce challenges, we see that Leaders and BAU place a greater emphasis on employee acquisition, with At Risk more concerned about retention KEY WORKFORCE CHALLENGES =5% ABOVE AVERAGE
ALL
LEADERS
Finding new employees with the right attitude
60%
Finding employees with the right skills
59%
Turning away customers because we don’t have enough staff
30%
Managing the time and cost involved in recruiting new employees
29%
Employees leaving in pursuit of better opportunities as mechanics
20%
Employees leaving in pursuit of opportunities in other industries
19%
Turning away customers because we don’t have staff with the right skills
19%
Absenteeism Employees reaching retirement age Employees leaving to pursue full-time education
35
14% 10%
2%
AT RISK
BAU
70%
60%
64%
64%
36%
32%
18%
6%
27%
17%
14%
31%
19%
10%
Base: 2020; n=201 (Leaders n=34, BAU n=102, At Risk n=65). 2020 data weighted. Q11. Thinking now about managing your workforce, what are the key challenges facing your business
25%
28%
16%
2%
47%
31%
26%
0%
53%
22%
14%
17%
11% 2%
15% 1%
R E C R U I T I N G S TA F F Leaders are most likely to have taken on new hires within the past 12 months, with one in two having hired a mechanic, and one in three having taken on an apprentice within that same time period TIMEFRAME OF LAST HIRE APPRENTICES
QUALIFIED MECHANICS ALL
Last 12 months
LEADERS
27%
BAU
AT R I S K
ALL
24%
19%
23%
9%
13%
BAU
AT R I S K 14%
32%
26% 14%
46%
10%
13%
9% 8%
1 – 2 years ago
22% More than 2 years ago
LEADERS
50%
55%
60%
7%
54%
46%
50%
65%
22% Never hired one
10%
10%
12%
Qualified mechanics
Qualified mechanics
Qualified mechanics
36
Qualified mechanics
Base: 2020; n=201 (Leaders n=34, BAU n=102, At Risk n=65).. 2020 data weighted. Q13. When did you last employ..?
13%
14%
15%
Apprentices
Apprentices
Apprentices
8% Apprentices
AT T R A C T I N G A N D R E TA I N I N G S TA F F Word of mouth is the single most effective means of sourcing mechanics and apprentices, although group training providers such as the MTA or VACC and educational institutions such as TAFE are also recognised for the vocational pathways they offer E F F E C T I V E M E T H O D S O F F I N D I N G S TA F F QUALIFIED MECHANICS:
APPRENTICES:
=5% ABOVE AVERAGE
ALL
LEADERS
55%
WORD OF MOUTH
JOB POSTING ON DIGITAL CHANNELS
55%
22%
JOB ADS IN LOCAL NEWSPAPER
12%
BAU
27%
9%
AT R I S K
57%
20%
12%
53%
23%
13%
ALL
42%
WORD OF MOUTH
JOB POSTING ON DIGITAL CHANNELS
LEADERS
BAU
56%
AT R I S K
38%
38%
6%
2%
7%
6%
JOB ADS IN LOCAL NEWSPAPER
3%
0%
2%
6%
5%
5%
1%
RECRUITMENT AGENCIES
5%
4%
5%
7%
RECRUITMENT AGENCIES
GROUP TRAINING PROVIDER (MTA/VACC)
4%
4%
5%
4%
GROUP TRAINING PROVIDER (MTA/VACC)
24%
16%
27%
23%
PARTNERSHIPS WITH EDUCATIONAL INSTITUES (TAFE)
1%
0%
2%
0%
PARTNERSHIPS WITH EDUCATIONAL INSTITUES (TAFE)
22%
16%
21%
26%
37
9%
Base: Have hired Mechanics n=172 (Leaders n=28, BAU n=85, At Risk n=59). Have hired Apprentices n=167 (Leaders n=26, BAU n=82, At Risk n=59). 2020 data weighted. Q18. Which of the following methods do you find most effective when looking for a
R E C R U I T I N G S TA F F With most workshops able to find a new mechanic in under a month, although one in four do report significantly longer timeframes; as could be expected, apprentices are more readily available, rarely taking more than four weeks to find LEAD TIME WHEN HIRING APPRENTICES
QUALIFIED MECHANICS
ALL
LEADERS
BAU
AT R I S K
2.1
1.8
2.3
1.9
MECHANIC
MECHANIC
MECHANIC
MECHANIC
52%
AVERAGE TIME TAKEN (MONTHS)
LEADERS
1.5
1.4
1.6
1.5
APPRENTICE
APPRENTICE
APPRENTICE
APPRENTICE
BAU
AT R I S K
74% 77% 71% 77%
63%
58%
ALL
43% 18% 14% 12%
LESS THAN A MONTH
38
UP TO 2 MONTHS
32%
25% 5%
10% 11% 11% 9%
UP TO 3 MONTHS
13%
23%
MORE THAN 3 MONTHS
10% 14% 12% 5% LESS THAN A MONTH
UP TO 2 MONTHS
2% 5% 1% 3%
13%
UP TO 3 MONTHS
Base: Have hired Mechanics n=172 (Leaders n=28, BAU n=85, At Risk n=59). Have hired Apprentices n=167 (Leaders n=26, BAU n=82, At Risk n=59). 2020 data weighted. Q14. From when you first start looking, how long does it typically take until they start in your business?
5%
16% 15%
MORE THAN 3 MONTHS
T R A I N I N G S TA F F It does then however take a substantial length of time to bring new apprentices up to speed; this is particularly challenging for At Risk, who appear more likely to take on new apprentices, with Leaders potentially focussing on second or third year candidates LEAD TIME TO BRING NEW EMPLOYEES UP TO SPEED APPRENTICES
QUALIFIED MECHANICS
ALL
LEADERS
BAU
AT R I S K
1.6
1.3
1.6
1.8
MECHANIC
MECHANIC
MECHANIC
MECHANIC
66%
76%
67%
AVERAGE TIME TAKEN (MONTHS)
ALL
LEADERS
2.7
2.4
2.6
3.0
APPRENTICE
APPRENTICE
APPRENTICE
APPRENTICE
BAU
AT R I S K
59%
57% 17% 20% 14% 20%
LESS THAN A MONTH
39
UP TO 2 MONTHS
29% 24% 7% 4% 7% 9% UP TO 3 MONTHS
10%
34%
24%
11% 13%
42%
32% 17%
15% 11%
0% MORE THAN 3 MONTHS
LESS THAN A MONTH
UP TO 2 MONTHS
23% 12%
11% 7%
UP TO 3 MONTHS
Base: Have hired Mechanics n=172 (Leaders n=28, BAU n=85, At Risk n=59). Have hired Apprentices n=167 (Leaders n=26, BAU n=82, At Risk n=59). 2020 data weighted. Q15. When you take on a new employee, how long does it take them to get up to speed with how everything runs in your workshop
39% 21%
MORE THAN 3 MONTHS
R E C R U I T I N G S TA F F Reflecting the use of word of mouth within a generally tightknit sector, most new hires are sourced from other independent workshops; one in six are however former dealership staff. For apprentices, we see a pathway that might begin in an At Risk workshop, but then progresses to a Leader or BAU W H E R E E M P L O Y E E S W O R K E D P R E V I O U S LY QUALIFIED MECHANICS ALL INDEPENDENT / CHAIN WORKSHOP
LEADERS
61%
DEALER WORKSHOP
15%
ASSOCIATED TRADES
10%
NO PREVIOUS EXPERIENCE
9%
OVERSEAS
4%
40
BAU
62%
APPRENTICES
AT R I S K
62%
59%
INDEPENDENT / CHAIN WORKSHOP
ALL
LEADERS
BAU
AT R I S K
11%
16%
11%
7%
14%
15%
DEALER WORKSHOP
5%
5%
6%
4%
11%
8%
12%
ASSOCIATED TRADES
4%
5%
3%
7%
7%
8%
11%
NO PREVIOUS EXPERIENCE
20%
0%
6%
3%
OVERSEAS
78%
1%
74%
0%
80%
0%
Base: Have hired Mechanics n=172 (Leaders n=28, BAU n=85, At Risk n=59). Have hired Apprentices n=167 (Leaders n=26, BAU n=82, At Risk n=59). 2020 data weighted. Q16. Thinking about your most recent hires, where did they work previously?
77%
3%
R E C R U I T I N G S TA F F The greater focus on retention within At Risk workshops is potentially due to the level of difficulty they face in finding qualified mechanics to join their business, and the risk of losing apprentices to other workshops as they become more experienced D I F F I C U LT Y F I N D I N G N E W H I R E S APPRENTICES
QUALIFIED MECHANICS
AVERAGE DIFFICULTY (/5)
ALL
LEADERS
BAU
AT R I S K
ALL
LEADERS
BAU
AT R I S K
3.1
2.7
3.2
3.3
2.3
2.0
2.4
2.3
14%
9%
14%
16%
6%
7%
22%
17%
15% Very hard
34%
37% 20%
41%
Neither
20%
14%
11%
13% 11%
Quite easy
Very easy
13%
15% 33%
27%
Qualified mechanics
41
Qualified mechanics
12% 19%
Quite hard
13%
7%
9%
14%
11%
16%
20% 25%
12% 11%
56% 44%
41% 25%
25%
Qualified mechanics
Qualified mechanics
Apprentices
33%
Apprentices
Apprentices
Base: Have hired Mechanics n=172 (Leaders n=28, BAU n=85, At Risk n=59). Have hired Apprentices n=167 (Leaders n=26, BAU n=82, At Risk n=59). 2020 data weighted. Q17. On a scale of 1-5, where 1 is very easy and 5 is very hard, how easy or difficult was it to find your most recent hires
Apprentices
STAFF RETENTION
EMPLOYEE INCENTIVES OFFERED The ability of Leaders to retain key employees is clearly grounded in a highly compelling employment offer, incorporating significant levels of flexibility and consideration of the needs of the employees; one can also see why apprentices would find working for a Leader an enticing opportunity INCENTIVES OFFERED TO EMPLOYEES =5% ABOVE AVERAGE
QUALIFIED MECHANICS ALL
LEADERS
BAU
APPRENTICES
AT R I S K
ALL
BAU
AT R I S K
Above award wages
91%
93%
92%
Pay for their training / L&D
80%
87%
84%
70%
Pay for their training / L&D
Pay for social events (e.g. Team lunches, activities)
74%
76%
76%
69%
Pay for social events (e.g. Team lunches, activities)
59%
79%
58%
Extra leave / time off
68%
87%
67%
58%
Extra leave / time off
54%
74%
54%
Flexible working hours
66%
80%
66%
57%
Flexible working hours
51%
70%
53%
61%
Mentoring
75%
59%
Mentoring
58%
56%
58%
Office amenities (e.g. Free snacks, soft drinks)
56%
60%
59%
Paid maternity / paternity leave Help with accommodation
44
33% 11%
42% 13%
31% 13%
88%
51% 29% 7%
Above award wages
LEADERS
52% 70%
Help with accommodation
44% 23% 9%
58%
93%
61%
Office amenities (e.g. Free snacks, soft drinks) Paid maternity / paternity leave
65%
71%
56% 35% 16%
36% 56% 50% 43% 36% 57%
49% 24% 11%
Base: Have hired Mechanics n=172 (Leaders n=28, BAU n=85, At Risk n=59). Have hired Apprentices n=167 (Leaders n=26, BAU n=82, At Risk n=59). 2020 data weighted. Q12. Which of the following do you offer your employees?
31% 16% 3%
AT T R A C T I N G A N D R E TA I N I N G S TA F F With Leaders also most clearly delivering on their stated intent to offer employees career progression opportunities % AGREE
“WE OFFER CAREER PROGRESSION OPPORTUNITIES”
62%
63%
52% LEADERS BAU AT RISK
60%
45
Base: 2020; n=201 (Leaders n=34, BAU n=102, At Risk n=65). 2020 data weighted. Q21. Which of the following statements apply to your business? % AGREE
AT T R A C T I N G A N D R E TA I N I N G S TA F F Despite the quality of the package on offer, many Leaders (and other workshops) don’t view these as being substantially ‘different’ or out ‘of the norm’, for them this appears to be a demonstration of the respect they have for their workforce BENEFITS OFFERED TO EMPLOYEES =5% ABOVE AVERAGE
ALL
LEADERS
RESPECT
29%
GOOD WORK ENVIRONMENT
PERSONAL USE OF WORKSHOP
NOTHING SPECIAL
46
12%
10%
11%
27%
11%
13%
2%
27%
15%
24%
0%
5%
25%
24%
22%
11%
22%
23%
18%
25%
BONUSES
28%
24%
20%
ABOVE AWARD WAGES/ GOOD PAY
OFFER TRAINING AND MENTORING
42%
24%
WORK/LIFE BALANCE
AT RISK
BAU
13%
6%
24%
Base: 2020; n=201 (Leaders n=34, BAU n=102, At Risk n=65). 2020 data weighted. Q19. Is there anything you do differently to find or keep your employees in your business? Are you doing anything special? – Coded
6%
26%
28%
GOVERNMENT INTERVENTION
AT T R A C T I N G A N D R E TA I N I N G S TA F F Given the challenges they are facing, there is clearly a level of support within the sector for increased government intervention to drive growth in the number of qualified mechanics in Australia % AGREE
“ THE GOVERNMENT SHOULD BE DOING M O R E TO G R O W THE NUMBER OF QUALIFIED MECHANICS IN A U S T R A L I A”
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LEADERS BAU AT RISK
77% 84%
87%
83%
Base: 2020; n=201 (Leaders n=34, BAU n=102, At Risk n=65). 2020 data weighted. Q21. Which of the following statements apply to your business? % AGREE
ROLE OF GOVERNMENT Looking at the form that support might take, many workshop operators suggested some type of incentive, either for the business to help them take on additional staff, or for employees (particularly apprentices) to improve their remuneration A S S I S TA N C E S O U G H T F R O M T H E G O V E R N M E N T LEADERS
More benefits for a small business, grants to help out financially, incentives to put on new staff
31% 26% 23%
LEADERS BAU AT RISK
26%
2 6 % O F WO R K S H O P S WA N T THE GOVERNMENT TO HELP BY PROVIDING INCENTIVES
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More incentives for apprentices wages, the award is disgraceful, it needs to be higher so they can survive and to make it more attractive to be an apprentice mechanic
BAU
AT RISK
Subsides training and give incentives to help small business employ apprentices
Tax incentives for the business because it is very tough for SMB’s and money is tight
More incentives into joining industry more encouragement to get young people into trades. Encourage more apprenticeship via employer incentives and promote through schools
Subsidies/ incentives/ relocation allowance for rural or remote places.
More incentive to reduce power bills
Better incentives for employers to take on apprentices
Help pay for tool allowance
Base: 2020; n=201 (Leaders n=34, BAU n=102, At Risk n=65). 2020 data weighted. Q20. What is the one thing that you would like government to do to help you find or keep employees going forward?
The structure of paying people so that we can keep them on, the wages are so low that they don't stay here for us to keep them on, low for this industry
Give employers more financial incentives to take on new staff / e.g. with apprentices get money after 6 months maybe do that every six months they stay on, helps offset the cost of a new apprentice
ROLE OF GOVERNMENT Workshops are also looking to the government to support the industry by providing assistance with training, ensuring workshop employees can stay up to date with the latest technologies and innovations A S S I S TA N C E S O U G H T F R O M T H E G O V E R N M E N T
LEADERS
19%
22%
AT RISK
16%
20%
2 0 % O F WO R K S H O P S WA N T T H E GOVERNMENT TO HELP WITH T R A I N I N G A N D E D U C AT I O N
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BAU
LEADERS
BAU
AT RISK
Training/ I would like to see mechanical and auto electrical become the same qualification, there is less mechanical parts in a car now
Provide better opportunities for them to be trained in the latest technologies / more courses available / they could absorb some of the costs, keep the costs down
TAFE could provide more support for apprentices / MTAA provides better support, one on one activities and they visit / I don't think TAFE is strict enough and don't give enough support to students that need it
Offer more training, subsidised courses for mechanics to be able to do additional qualifications, make it more attractive for a young mechanic to upskill so they are worth more to an employer. For TAFE, the courses have to be paid unlike uni where they can get HECS, and not all employers pay the fees. Make sure the apprentices have up to date skills, keep up with the trends and not teach them the old way things are done
Base: 2020; n=201 (Leaders n=34, BAU n=102, At Risk n=65). 2020 data weighted. Q20. What is the one thing that you would like government to do to help you find or keep employees going forward?
Offer more upskilling courses and not charge an arm & a leg for them Get some better specialised training and a longer apprenticeship, can't learn everything in that time The requirement for traditional mechanic is going to taper off i.e. electric/ talk more to business owners and help with more specialized courses allowance
There needs to be more electronic training for the future There are not enough suitable supervisors to guide the apprentices / the advances in electronics and technology are hard to keep up with, the apprentices we see are all school drop outs so don't have the education or ability to do the work
SUMMARY
SUMMARY Our key themes can be summarised across these six topic areas SUMMARY THEMES
WORKSHOP PERFORMANCE
MARKET SENTIMENT
EMPLOYEE PROFILE
RECRUITING STAFF
RETAINING STAFF
GOVERNMENT INTERVENTION
Australian workshops are operating in an increasingly challenging and competitive market. This means further growth in our At Risk segment, with many workshops ‘feeling the pinch’.
Plans will evolve after the global pandemic, but prior to this, the greatest concerns were recruiting and retaining staff, managing costs, and keeping up with technology.
As we know, most workshops have older staff on their books, with those aged 50+ making up almost half of the At Risk workforce.
When it comes to recruitment, finding and keeping employees is a key issue for many workshops.
Leaders clearly offer a superior working environment, with high levels of flexibility, and consideration of the needs of their staff.
Given the challenges they are facing, workshops are clearly in favour of increased support for the sector from government.
Leaders are again the most confident in their future profitability, with one in three At Risk workshops unsure of their viability over the next 12 months.
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On the other side of the equation however, Leaders (and to a lesser extent BAU) are more likely to employ mechanics from diverse backgrounds, and ‘second chance’ employees such as ex-offenders.
They continue to rely on word of mouth, typically sourcing staff from other independent workshops. Leaders are both most active and effective in this space, while At Risk appear to struggle to hold onto apprentices should a ‘better’ offer turn up.
Key here is that despite the quality of the package on offer, many don’t view it as being anything special – they appear to view it as an appropriate reflection of the respect they have for their workforce.
While specific suggestions vary, many workshop operators are in favour of: ▪ Employment or labour incentives ▪ Funding for, or assistance with training
THANK YOU C O N TA C T U S : James Organ B E N SDirector, E LW Y N ACA Research D I R E CE:Tjorgan@acaresearch.com.au OR / 02 9927 3303 bselwyn@acaresearch.com.au Joanne Rozos L I Z Z I Account E D A WManager, SON ACA Research SENIO R A C C O U N T M A N A G E/R02 9927 3342 E: jrozos@acaresearch.com.au ldawson@acaresearch.com.au Level 6, 107 Mount Street, North Sydney, NSW, 2060 HANNAH LEMON ACCOUNT MANAGER hlemon@acaresearch.com.au