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How much the tech shortage is costing
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According to a new study, the ongoing automotive technician shortage is costing Ontario dealerships around a half million dollars a year per missing tech.
A study from business advisory firm MNP about the skilled labour shortage of technicians conducted for the Motor Vehicle Retailers of Ontario (MVRO), with support from the Canadian Automobile Dealers Association (CADA), reported that there were 3,000 vacancies as of Q1 2023.
Depending on labour rate, the estimated annual revenue loss of one technician vacancy for a dealership is between $429,600 and $644,440 per year.
“Just about every new car and truck retailer I speak to can’t hire an automotive technician today,” said Todd Bourgon, executive director of the MVRO, “We know there is a massive shortage of automotive technicians, and the problem won’t be solved overnight.”
Not just an Ontario problem but a Canada-wide one is the aging labour force of the automotive trade with a declining number of people entering apprenticeships is declining.
“As a result, the number of people in the automotive trades labour force is declining and vacancies are increasing,” the report said.
Employers are training apprentices and recognize the need to attract youth to the industry, the report observed, but acknowledged that it takes time to train technicians. There is concern that there are not enough apprentices to fill current and future labour needs.
The report noted that employers have increasingly been using the Temporary Foreign Workers program to fill vacant positions. But, it added, the process is costly and extends the hiring timeline.
From 2016-2021, the number of technicians and mechanics in the 15-24 age group declined by 2 per cent. In the 25-54 age group, the drop was 8 per cent. The number of technicians and mechanics aged 55 and over went up by almost 13 per cent.
“This indicates that the workforce is aging and that the number of people entering the occupation is not sufficient to replace those that will be retiring between 2022 and 2032,” the report said.
“This report underscores that careers are plentiful for the next generation of automotive technicians. Our members are ready and willing to train and hire workers for the long term,” said Bourgon. “I encourage students, parents and educators to give a hard look at the tremendous career opportunities in Ontario’s world-class auto sector. In the short term, we can address this crisis by cutting red tape in the [labour market impact assessment] process to save time and money for employers and technicians coming from abroad.”
The main problem with the automotive trade from what I’ve seen, is that on one hand the shops and dealerships are crying about the shortage of people in the trade but then on the other hand they don’t want to pay a decent rate to attract/keep people, on top of the massive investment by techs required to be in the trade. I just had an interview at a dealership and they wanted to pay me less on flat rate than what I’m currently making hourly.
Alex is correct.
We have a specialized shop.
We have a labour rate that enables Us to pay good salaries.
Education starts young in schools…
The curriculum in schools should include the ability to learn not only tech but also a hands on skill.
We need to be less pessimistic and deal with the elephant in the room.
Todays politicians collect Our money..call it theirs and throw it back to the Bling….
Looks good on the outside but not alot of substance inside!!!
That is pessimistic because it will be a Hard Fix!
Go Jays Go!!!
Just from the $ numbers quoted here, the solution is obviously straightforward.
If the dealerships can earn another 4-500 K a year, put a 100 k of that directly on top of what the techs already make.. Both parties win, The dealers make a lot more money, the techs get a better share, and you will have a LOT more people entering the trade.
There is a big reason why I decided to become self employed for the last 40+ years of my career. I love the trade, but the employee-employer dynamics have always been out of kilter