Written by ‘Forty’, a Progressive Estimator
Chances are if you are reading this article you are experiencing daily struggles in three main areas of collision shop management. A lack of skilled staff, a lack of labour rate increase and the resistance to change from insurance ‘partners’ is slowly destroying this industry one retired tech at a time.
I’ve been in this industry for my entire life. I have always heard from my peers that, “someday there will be nobody skilled enough to fix the cars, what will the insurance companies do then?” paired with, “well if they don’t start paying higher rates, there will be no techs to hire and no shops to send their cars to.” Are these the problems of the future? I think the ‘future’ we have all been talking about isn’t the future anymore, I think it is the here and now. The changes that need to be made are up to us, wouldn’t you agree?
Challenge yourself with these questions and see if you disagree.
- Are you having difficulty hiring technicians?
- Are you having an issue getting paid for the operations that you need, paired with an unwilling attitude to accept change from your insurance ‘partners?’
- Cost of doing business, OEM Certifications, OEM Repair Information. Are these costing the same as they have in the past, or are they all going up at exponential rates?
- Are the increased costs of sustaining your business being fairly compensated by your insurance partners?
Let’s be honest—we are all in the same industry and I most likely already know your answers to each one of the questions. We are each suffering the consequences of a tech shortage. We all struggle to get paid for the correct operations that we need to fix the car properly. I can’t count how many times someone has told me, “they just aren’t going to pay for that.”
What can we do about it? The facts are that we are experiencing extreme changes in our industry and we all need to work diligently to solve the so-called ‘future’ problems that haunt us today. With the increased cost of purchasing a product follows with a respective inflation in cost. What happens now that you invest in the hundreds of thousands of dollars to repair cars to the certified level only to be told, “no, we do not pay for that.”
Simply put, Progressive Estimating is the answer. Stop thinking that you will only be told “no.” Start asking for the operations required to fix the car. Start asking for ‘OEM Safe Repair Lookup.’ Start being the change that you want to see in the industry.
Remember, you lose 100 percent of the dollars you don’t add to your estimate. Most importantly, progressively improve your craft.
Dollars left on the table
I was recently told by an insurance partner that “some shops just want to be paid to turn the lights on” and “I can’t pay you to move the car to the next bay—some things are just included in the repairs.” This was his response after I proved an operation as not included by Audatex, but required to complete the repair. What was that operation? Setting up a welder to perform the repair. I couldn’t believe that Audatex does not include setting up your welder when replacing a weld on a body panel.
Page 44 of the Audatex Reference Manual under Labor Exclusions will express that “setup of welding equipment, welding materials and/or test welding” is a labour exclusion. Think about this, how many times has your shop used a welder? The answer to that times a .5–Setup Mig Welder or Setup STRS will be the answer to how many dollars you have left on the table. Even worse is that your $20,000 resistance spot welder, that you had to purchase as a result of an OEM Certification, is being used free of charge. Remember what I mentioned earlier about increasing the costs of doing business?
Educate yourself
I hate reading, I always have, but when it comes to reading up on my profession and bettering my craft, I will read novel after novel—and you should too! Two exceptional places to start are the Audatex Database Reference Manual and the Mitchell CEG P-Pages. In here you will learn about operations that you have been doing for years without fair compensation. Beyond setting up your welder, it is also not including a two-stage setup when you paint the interior, jambs, edges and undersides in Audatex. Read up further on the two-stage interior to see the explanation of this. You may think that you understand what these operations are until you read the definitions carefully, then you will see the opportunity that is ahead.
Safe Repair Lookup
It is no secret that cars are getting more technology involved, to say the least. If you do not take it upon yourself to search repair information on every car before each repair; you are just leaving the opportunity on the table to make a mistake that could be as simple as a comeback to reprogram, or as serious as a motorist injury or death. The bottom line here is that you are not smarter than the manufacturer and you will not be any time soon. You need to protect yourself, your tech and your business by doing the research and following through that the tech has completed the repairs as per the manufacturer. Only once you invest this time into this area, will you notice the large burden that it puts on your administrative staff. Both Audatex and Mitchell have unofficially shared that the time required to find OEM Repair Procedures is not included in repair times. Therefore you need to charge for your times to do this and rightfully so.
“We don’t pay for that”
To insurers: Why don’t you? Do you not care about a safe repair?
This is very possibly the reason I wake up in the morning. I am lucky enough to have the personality that provides me with a surge of energy towards ridiculous statements like this, as well as the constitution to see it through. What do you mean you don’t pay for it? As ‘insurance company X,’ you don’t support a safe and proper repair completed to OEM specifications? As ‘insurance company X’ you don’t find it fair to compensate your ‘partners’ with the allotted time to complete the tasks? They can’t have both—it is simply not sustainable.
Don’t take no for an answer. Provide insurers with the documentation proving why you need the reimbursement of your time. Send them a copy of the page in the Audatex Reference Manual proving the operation is not included. Prepare to take the time to explain in detail, as well as the liability concerns if you don’t! Be knowledgeable, be respectful and be confident in what you are asking for. You will be challenged—how the changes are accepted depends solely on your professionalism in this conversation.
If you enjoyed this article, please keep an eye on future content by ‘Forty,’ the Progressive Estimator of Canada. Also please drop a comment below the online article—I want to hear your feedback. I want to hear what issues you are experiencing. I want to hear what you think of my vision. Most importantly I want to create a unified front that works together to change this industry for the better.
7 Responses
Truer words have never been spoken. This is very well put and I applaud this initiative. Here’s my 2 cents…
The cost of the industry’s idiosyncrasies are immeasurable. I am proudly the 3rd generation of collision industry entrepreneurs and there are more than 10 trained and skilled professionals in this industry in my family alone. For us, this craft is a labour of love, not just a job or a career. I am at the point in my life where I am looking at starting my own business venture. Am I going to follow in my father and my grandfather’s footsteps and make my own mark on the collision industry? No. My decision has been to look to other industries with higher profit margins and less uphill battles to invest in my, and my families future. I to, am incapable of accepting when “bad becomes normal” and fought hard to restore common sense back to the insurer-facility relationship during my time in the industry. As much as I want to tackle this issue with you, I’m not interested in missing a better business opportunity, so that I can fight the good fight.
We need more of this.
Who will ask the insurers these types of questions in a public forum?
Very well written.
Very well written. You are saying what we all think.
But choose to do nothing for fear of creating conflict.
Nor do we have the time with the shortage of manpower
to educate the Insurance Companies. The Insurance Companies are
in the same boat as us and should be educating their people.
I would suggest that the image desk Appraiser’s have not read the P-Pages. They educate their Staff on the repair procedures(I CAR) leaving out the actual set ups for the operation of repair same.
I have been on both sides and doing this for 42 years
Agree This boils down to fair wages for the Employees and Educating the Public.
This a rewarding Trade if Trained correctly
The Vehicles are evolving at an alarming rate and with the shortage of Manpower
as an Industry we are in serious trouble.
I do believe a Unified front is the answer . This would also have to Include every Insurance Companies
What a great theory. Try to educate the nameless faceless money printing machine. Good luck. They are educated. But for their own cause. Do you know how they silence independents like me, with our family business? “If you wont do it, or do it for that price, our shop will.” (Meaning CSN, FIX, Carstar etc…) They’ve created an environment where the shops their contracted with outnumber independents. Majority rules. Even though a quick google search will reveal that those contracted shops have a google rating of 3.5 stars or less. Quality does not matter to them. Just numbers. If you were set on fire, and they were standing there with an OEM fire extinguisher, they’d put it down, and let you burn, to go find an aftermarket one, that might not work.
well finally somebody put the right words on the page. I too have 40 plus years in this industry and have jumped through every hoop possible except paying protection fees to a banner to secure my workload at yet another discount. In my communtity we are the leader in our feild and were one of the very first to tool up, educate our staff and follow the lean journey. For every technition we have 1.5 people in support to tackle excactly what the writer is saying. We as an industry are on a sinking ship and I for one am not going to be able to hand my operation down to my kids and have them take the risks required to survive just to see your bottom line slowly disappear into the tank. You are absolutly right, the time is up! wouldnt it be nice if the Alberta government would allow us to increase our rates like they did for the poor insurance industry.
This is the most thoughtful & insightful article I have read regarding our industry.
You have addressed some critical points & I very much appreciate it.
Thanks for sharing this information.