Service-sector crunch tightens

Employers play attraction and retention game

Mike Lohman is feeling like a VIP lately.

Lohman, an instructor in the Front Range Community College post-secondary automotive program, said area auto dealerships and service shops are glad to see him come through their doors. Glad, because he’s there to offer them some help.

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“At one time I really had to work hard to get kids placed,” Lohman said. “Now I can almost broker them. I’m a lot more welcome.”

Welcome because the area’s labor shortage has not bypassed the automotive industry. Automotive technicians (aka mechanics), auto-body technicians, drivers and even car washers are hard to come by when jobs are so abundant in Northern Colorado.

“The industry is ready to hire anybody right now that’s ready to come to work,” Lohman said. “At the same time there’s a shortage of qualified technicians. Every student I graduate from our program that has the skills and knowledge is snatched up real quick.”

Lew Wymisner, Larimer County Workforce Center assistant director, isn’t surprised by the warm reception Lohman’s receiving or by the rapid pace at which his graduates are getting jobs.

“The labor shortage is not selective,” Wymisner said.

Unemployment in the state was 2.7 percent in August – the latest numbers available – remaining unchanged from July. “Some economists say that anything under 4.5 percent is full employment,” Wymisner said.

And while a lot of attention at the local, state and national levels has been focused on high-tech jobs going unfilled, he said there is an even bigger pinch on retail and service industries. Those services grew in size by 10 percent from 1998 to 1999, Wymisner said, and make up nearly 50 percent of Larimer County employment.

“Any labor shortage in higher-tech, higher-paying job classifications will be, in some respects, more severe in lower-tech, lower-paying jobs,” he said.

The economic boom that kicks sales into high gear – and the automobile industry is one of the best examples – also means work forces grow just as the labor pool dries up.

“With the economy as prosperous as it is ä the competition is pretty fierce to get qualified employees,´ said Laurie Pedersen, general manager of Pedersen Automotive in Fort Collins. “You end up taking inexperienced people, if you think they’ve got the right values, and training them.”

Training inexperienced employees who demonstrate a good work ethic, attention to detail and conscientiousness is how Hans Schwarz, paint-and-collision center manager for Ferrero Auto Center in Loveland, keeps his body shop stocked with workers. Walking through the bays and work spaces, he points to employees who started as porters or car washers while they were high-school students. Now those boys turned men are some of his most valued employees.

“When you get people that want to work, you do everything you can to hang on to them,” Schwarz said. “You can train them to do anything. The biggest thing is a motivation to work.”

Pedersen said she’s not short on employees, but positions are always opening at the dealership as employees transfer from department to department. Some positions are hard to fill or to keep filled, though.

“Entry-level positions are hard to fill,” Pedersen said. “Detailers – they’re hard. You’re going to get anything from high-school to college-aged kids that work full time in the summer, part time in the winter. They tend to have a lot of (scheduling) conflicts.”

Mike Dellenbach, president of Dellenbach Motors in Fort Collins, said he has similar problems.

“Probably the worst problem is hanging on to entry-level employees – porters and car washers more than any other level,” he said. “There’s a shortage of people and plenty of work.”

Those problems are compounded by aggressive competition for those entry-level workers. Other service and retail employers, such as fast-food restaurants, need them, too. In such entry-level positions, 50 cents an hour can prompt an employee to abandon ship, Wymisner said.

Pedersen knows that.

“They will jump ship if somebody down the street is paying $8 an hour and they’re making $7.50 here,” she said.

Which takes her back to the philosophy of training and promoting from within when she finds good employees. She also tries to pay those employees more if they prove to be valuable.

Lohman said that’s what it takes to keep young employees.

“I don’t think anybody that expects to get any kind of quality employees can pay minimum wage,” he said.

“These kids are saying ‘I can go to work at Arby’s for $9 an hour.’ It used to be the automotive area (that paid the best). If they want to hold on to employees, theyre going to have to up pay very quickly.”

Pay is a big reason Garnsey and Wheeler Ford in Greeley has not been hit hard by the labor crunch, said director of marketing Brian Stott.

“We haven’t experienced any problems from the service or the sales side,” Stott said. “It’s very competitive, but it’s always been very competitive. I think our pay is very competitive with all the other dealerships in the marketplace. We offer excellent benefits packages. That’s why we’re able to retain senior staff.”

Ryan Ferrero, Ferrero Auto Center general manager, said pay combined with a quality work environment has helped his Loveland dealership retain and attract employees.

“I think we’ve been pretty fortunate,” he said. “We’ve been retaining our people. We focus on maintaining a quality work environment and taking care of people the best we can.”

But the best pay and benefits can’t address all the situations that a labor shortage creates. Nor can they address the scarcity of skilled employees.

“Techs are hard to find,” Pedersen said.

Gone are the days when physical strength and good hand-eye coordination were the prerequisites for a mechanic’s job. Sophisticated technology in most makes and models means technicians have to have mental muscle, too.

“It’s becoming so much more of a high-skilled job,´ said Paul Barrow, vice president of the Colorado Automobile Dealers Association.

Dealerships are struggling, he said, to find the highly educated, highly skilled employees they need in a competitive marketplace. “It’s a chronic problem in the industry.”

“Good techs are more educated and are demanding more in the way of salaries than they ever have,” Pedersen said.

“There’s a lot of competition within the state. Dealers will try to steal techs from their own manufacturer line. It just raises the pay scale even higher because there’s so few of them.”

As an example of how high the pay scale is getting, Lohman pointed to a former student of his that has been working as an automotive tech for one year. Barely out of school, the young man is pulling down $60,000 a year, Lohman said.

“The opportunities are there for anybody that has the skills and the knowledge,” he said. “It’s a wide-open field.”

It’s likely to stay wide open, too.

“The labor shortage is going to be with us for a while,” Wymisner said.