Five trends to track in 2023
By ALLISON ROGERS
New year, new problems to face. Or you could try your hand at being optimistic and taking initiative to educate yourself on the road ahead. Either, or.
Using reports and information gathered from collision industry analysts and facility owners, Collision Repair mag has collected a list of five trending topics to keep an eye on in 2023. While many of these trends are topics we’ve been centred on for years, plenty of industry members foresee 2023 as the year where progress begins. See our findings on the following pages.
HELP, WE’RE HIRING!
The story goes like this: the young technician, upon completing their training at your facility under your staff, seeks a new opportunity and moves on from your business. Many collision centre owners will label this type of employee as ungrateful; after all, it was the businessowner that sponsored and trained them. The mistake made by the owner? Assuming the newly licensed technician would stay put for at least a little while after training was complete.
“Many of today’s workers regard job hopping as the new normal,” believes Paul Wolfe, senior vice president of human resources for job posting website Indeed.
“As shorter-term roles become a norm for today’s workforce, employers can no longer afford to discount potential candidates based on the length of time they’ve stayed in previous roles. Compared to how long they stay in a job, skills, aptitude and cultural addition are all better indicators of success in a job today.”
In fact, research from Indeed actually indicates 24 percent of Canadians have a positive view of the phenomenon dubbed “job hopping”; they say it’s given them the opportunity to learn new skills in short periods of time. On the contrary, 73 percent of Canadian employers admit to passing over candidates because of their extensive job history; 27 percent of employers say they have a negative view of job hoppers.
As noted by Wolfe, younger employees tend to place importance on workplace culture, though financial compensation obviously remains an important factor. According to the Harvard Business Review, the main reasons employees leave their roles lay in their feelings about their boss and management style; a lack of growth or lack of opportunity for growth or in offers of higher-paying options.
If you seek to retain a young staff member, make sure they know it. While financial bonuses and pay increases can be used to communicate your appreciation for their commitment to your business, be sure you foster a workplace where “props” are also a common occurrence.
BACK IT UP
As a result of a leaner workforce and ongoing parts delays, many facilities are recording higher-than-average cycle times. Plenty of collision repair centres across Canada have complained about booking repairs weeks out in the latter half of 2022. Add staff shortages to the mix and the equation checks out. In many cases these backlogs are unavoidable— you can’t wave a magic wand and make a parts order appear—but there are always steps to take.
There are backlogs in more areas than supply and materials; according to data from claims company CCC, claimants took longer to report losses in 2022, with the average driveable loss taking 8.6 days to report in 2022 (from January to September) and the average non-driveable claim taking 4.4 days to report between January and September 2022. CCC data says it took the average driver 7.6 days to report vehicle damage in 2022. The time from assignment to when the estimate is completed and uploaded also increased, though photo estimating did ease the situation. According to CCC and its 2023 trends report written by Susanna Gotsch the technology allowed for faster initial appraisals on losses.
“Photo estimation continues to see strong adoption,” wrote Gotsch. From the Romans Group’s perspective, such advances in technology will add delays as the new methods are rolled out to the industry. The company notes in its most recent whitepaper that “insurtech claims processing operating models [that] reinforce insurers’ preferred business economics, which are frequently at odds with the OEM repair model…will continue to have a material impact and influence on the collision repair industry.”
DROP IT LIKE ITS HOT
Some industry sources also note a marked departure from direct- repair programs (DRPs) in 2022. The Romans Group notes a “nascent movement” by several multi-location operators, away from DRP relationships while opting into OEM certification preference models.” Others cannot walk away from guaranteed work as easily; MSO scale “remains a competitive advantage,” notes the Romans Group.
Tensions regarding labour rates are also on the rise, with the collision repair industry poised to “aggressively pursue labour rates with insurers.” The industry is also hopeful insurer premium increases will allow for progress.
MIND THE GAP
There are knowledge gaps in the collision industry—and it’s not always the average collision centre owner or their staff dropping the ball. A recent survey conducted by Collision Repair showed results indicating OEMs often fail to provide education where artificial intelligence is concerned. Many still cite confusion on the topic, saying they know little to nothing about how the technology works or how it will affect their roles in the future.
Artificial intelligence, telematics and advanced driver assistance systems (ADAS) are three tech topics boggling minds in 2023. Plenty of claims today are incorporating artificial intelligence (AI) technologies. Solera’s Qapter platform has built-in AI capabilities, detecting damaged parts and recommending repair options from photos. Pro Spot demonstrated automatic welders, dustless sand systems and more at SEMA 2022. There’s no need for production floor folks to bite their nails yet, though; robots are far off yet from stealing your jobs.
ADAS is not a new concept, says John Marlowe of Level5Drive. In fact, Google will tell you the first piece of advanced driver safety tech came in the 1950s in the from of anti-lock braking systems. Nowadays, they’re a tad more advanced.
There is one thing the average collision repair will admit around ADAS: that they don’t know what they don’t know. In a nutshell, a considerable amount of industry learning is needed—both on the repairer and insurance sides.
Luckily for anyone scratching their heads on these topics, we have two articles in this very magazine—one on artificial intelligence and a conversation with ADAS experts. Check the contents page for further information.
In the face of the above-outlined challenges (and others not mentioned on these pages), many industry analysts and experts are confident that consolidation will continue. The Romans Group’s five-year industry forecast predicts that Canada’s top-three consolidators— Fix Network, Driven Brands and CSN—will continue to “aggressively grow their business while maintaining their significant market share lead.” The Group predicts the top-three consolidators will grow from 18.4 percent market share in 2021 to between 24 percent and 28 percent of the market by 2026.
The Romans Group estimates continued United States-Canada trans-border market entrances, as reflected by CSN’s merger with 1Collision; ProColor’s U.S. market entry and the Lithia Group’s acquisition of Pfaff Automotive Dealer Group.
One of the primary goals pursued by large consolidators is the ability to offer a one-stop-shop, or repair network wherein all bases are covered, including glass, express service, total loss processing, advanced repair, mechanical repair, diagnostics and more. The Romans Group suggests these groups will market the strength of these models to insurers.
Further, Romans predicts private equity to continue its displayed interest in the automotive aftermarket. “Despite the growing market share of the larger platforms and segments tracked and analyzed, there is still a long tail of smaller independent repairer fragmentation in the market, which will be the basis for the next wave of industry contraction and consolidation,” the Romans Group wrote in its recent whitepaper.