Workshop Study 2020

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

50

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