Toronto, Ontario — If you haven’t heard it enough yet, Tim O’Day from Boyd Group is here to say it again; the industry needs to do much better about compensating technicians if it wants to keep its collision centres staffed.
“It’s still a very, very tight, competitive labour market so even as we’re receiving price relief from our clients, we’re still under cost pressure,” said O’Day, CEO of Boyd Group, during the company’s Q2 earnings call.
“It’s dependent both upon our success in the timing from getting increases from clients—kind of leveling out client pricing a little bit more—and when the wage pressure softens up… It’s our belief that the industry needs to raise the bar on compensation for skilled labour to retain what we’ve got and to attract that labour from other industries because there’s just not enough capacity right now in the industry and the U.S. to service even reduced levels of demand.”
Aiming to address the issue from the other end, O’Day says Boyd plans to expand its Technician Development Program by doubling the number of apprentices it accepts by Q2 2023, from 200 to 400.
“Thus far this year we’ve made progress from where we started the year,” said O’Day.
“We really reinitiated this program at the beginning of last year and it’s an 18-month program. Over the next year, we’ll see more and more graduates come out of the program.”
In regards to the company’s Q2 financials, Boyd reported a record $612.8 million in sales for the quarter, up 37.8 percent from the same period last year.
O’Day attributes the company’s ability to keep repair costs down to its use of aftermarket parts, as well as what he considers “good estimating processes and repairing what can be repaired.”
He says the company is “very motivated to drive the repair costs down as low as we can get it while still performing a quality repair and having adequate returns for our shareholders.”
CFO Pat Pathipati also noted on the call that Boyd is starting to see increased revenue from calibration scanning, which he regarded as “important from a quality perspective as well.”
In response to a question about labour rates and parts price increases, O’Day said that while these things tend to vary when dealing with larger clients, discussions with larger-scale parts carriers are “very frequent” and the company expects to achieve more consistent market-by-market pricing in “a number of months.”
“We’ve made good progress with many clients but have not achieved the level of pricing that will return our margins to historical levels,” O’Day said. “…[W]e’re experiencing pricing variability between clients, which in addition to receiving sufficient pricing overall, is a key area of focus in our ongoing pricing negotiations. The fact is a higher level of pricing is critical for our industry to attract and retain the skilled labor that’s needed to meet even reduced levels of demand.”