Last May, I served on the Motorcycle Mechanics Institute's Performance Advisory Committee (PAC). This annual event invites industry veterans like myself to review their curriculum and observe classes in action to determine what works and what could be better. The 2016 PAC was represented by employees of American Honda, BMW, Harley-Davidson, Kawasaki, KTM, Suzuki and Yamaha manufacturers along with aftermarket businesses and dealership employees. We were a diverse group of motorcycle enthusiasts with common life stories. Our personal and professional experience ranged from 15 to well over 40 years. Old-timers like myself enjoyed reminiscing about the good old days when professionalism was second to having fun and pay was better than it is today.
That's right, in the '70s and early '80s technicians were paid better than they are today (when compared to living expenses). Back then many dealerships paid their technicians a 50-50 flat rate, the dealership charged the customer $40 an hour for labor and the technician was paid $20 an hour. The quicker the technician completed the work, the more money he made. Because techs fixed their comebacks on their own time, the program was pretty much self-policing. This was the pay plan I left in January 1981 to start my career at the Motorcycle Mechanics Institute.
About two years later I bumped into a colleague from the dealership I previously worked at and learned he was now a private investigator. With my mind blown, because he was probably the best tech I had ever worked with, I had to ask — why? I learned that shortly after I left the dealership the owners hired a business consultant. Many things changed as a result. One being the technician's pay plan. The dealership stopped paying 50-50 and started paying a salary with incentive. My friend had always tracked his compensation and when he compared the old system to the new he discovered the new program was paying him 30 percent less for the same amount of work he had done on the old 50-50 plan. He brought this to the owner's attention to no avail. So he quit and pursued a whole different career. A loss to our industry. That dealership went out of business a few years later — just sayin'.
There is a crisis brewing in our industry. At the MMI PAC my fellow volunteers and I unanimously agreed that technicians and, service and parts personnel in general, are not compensated well enough to attract entry-level applicants and retain them for a career in that job description. Looking to the Bureau of Labor Statistics for May, 2015 the median pay for motorcycle technicians is $16.45 hour (www.bls.gov/oes/current/oes493052.htm). Keep in mind that's for all levels of techs, currently entry-level techs out of school start at $10-12 hour. Hell, In & Out burger and Starbucks pays that well and the employees don't have to spend $25,000 in tuition, nor are they expected to buy $10,000 in personal tools in their first year of employment.
Furthermore, it was found that enrollment in motorcycle technical training schools is way down. MMI told us that they have over 500-job openings they cannot fill because they are not graduating enough techs. It seems the low enrollments are caused by a combination of the high cost of tuition and that motorcycle dealerships and independent shops are developing a reputation for low pay with no career path. Add to that the restrictive regulations on private technical schools and you have a collision course. In truth, the crash has already happened and the players are spinning out of control.
It comes down to this, the same guy or gal who loves motorcycles and who would love to work in your shop are not willing to forfeit $5-$10 an hour just for the love of the sport. Yes, dealerships can hire retired police, fire fighters and veterans for low pay because they have pensions to rely upon, but most of these folks are older, which means they'll offer a limited employment longevity and, they don't relate well to the youth that we desperately need to replenish the baby boomers that are dying off. The industry needs young men and women to make a career in the motorcycle industry.
This can strike a nerve for business owners who are stressed to the financial max. But the reality is if they don't start paying their parts and service people better, and provide a career path, pretty soon they won't be able to replace the ones who quit, the work won't get done or it won't it get done right and they'll seed the reputation that motorcycles are fun, but not a good way to earn a living.
The best compensation program for attraction and retention of good technicians is a competitive hourly pay plus a laddered incentive. Hourly pay must, at the least, be in line with auto techs, truck drivers and construction workers in your area. A good incentive plan rewards minimum performance objectives and encourages working towards achieving the next increase. For example, in a two-week pay period when a technician bills 60 hours of billable labor he could get a $1-2 bump in the dollar per hour earned. The ladder continues as the technician hits 80, 100 and 120 hours. This program makes the first bump achievable for most good technicians and rightly rewards the best technicians with the best pay. The hourly rate is correlated to the technician's status as an A-, B- or C-level tech. Service and parts managers, service advisors and parts associates would also be paid an hourly rate plus an incentive on sales. Most shops focus on individual sales, but if this causes morale issues you could base it on team performance.
Today, we're engaged in a collision course with no happy ending. If we don't correct our path, if the day comes that it's universally known that our wonderful motorcycle industry is a pitiful place to work in, it won't be just difficult to find good parts and service applicants — it could become impossible. And, if good technical schools like the Motorcycle Mechanics Institute cannot earn a profit, they may no longer be in business to provide the entry-level enthusiasts that are crucial to yours and our success. The time for real change is now. The romance of working in a motorcycle shop is not enough to overcome the shortfall of decent compensation.
Dave "Dako" Koshollek has worked in the motorcycle industry since 1971 as a motorcycle mechanic and service manager, as a technical trainer and national director for MMI's Harley-Davidson training programs and as vice president for Dynojet Research's motorcycle division. In 1998 Koshollek formed the DAKO Management company that provides sales, management and product training both in print and in person. He has written over 200-articles for Harley-Davidson's dealer publication, ShopTalk, has developed and taught numerous Harley-Davidson University courses in dealerships and at dealer conventions around the world and has authored a column titled "Dako's Fuel for Thought" for over 10-years that delivers proven parts and service operations best practices. Dako lives by the principle, "Ride Well - Be Profitable," which applies to all things in life.