2006 Benchmark study: Inside the AGR industry's HR departments

Editor’s note: This article is the second in a series examining the results of the National Glass Association Competitiveness Survey. The survey is intended to provide a comprehensive view of the performance and business practices of U.S. auto glass retailers and dealers, distributors and wholesalers, manufacturers and fabricators, and others related to the industry. The majority of survey respondents consist of privately held dealers/retailers with annual sales of less than $5 million that depend on auto glass replacement sales for the majority of their income.

While the pressure is on to find new technicians, it is just as important to retain existing staff. This extends beyond techs to include salespeople, customer service reps and office personnel. To meet the needs of all employees, a good retention plan should include financial incentives, professional training and employee empowerment strategies.

Although compensation is not the only reason employees stay with a company, it does factor into their decision. As of May 2005, the national estimated salary for auto glass repair and replacement technicians was $30,510, up 5 percent over the previous year, according to the Department of Labor, Bureau of Labor Statistics, in Washington, D.C. This breaks down to a mean hourly wage of $14.67.

Respondents to the National Glass Association Competitiveness Survey reported the approximate average wage for all full-time employees—hourly rate without overtime—was $16.50.

Coupled with fair compensation, financial incentives such as year-end or performance-based bonuses can boost company loyalty. More than 56 percent of survey respondents said they offered a bonus plan to employees, with nearly 30 percent reporting they had a profit- or revenue-sharing plan in place. See chart No. 4.

At Lee & Cates Glass, Jacksonville, Fla., employees are financially rewarded for meeting profit goals. “We put goals at each shop,” explains President Tom Lee. For example, if a shop exceeds its profit goal by 2 percent, part of those proceeds is shared with everyone at the location, he says.

Bill Evans, president of Evans Glass Co. in Nashville, also offers bonuses based on the company’s success, according to an article in e-glass weekly, Feb. 29. “Last year, bonuses ran from about $6,000 to $1,000 a person,” he said in the article. “This year, they’re going up from that.”

Employees police one another to maximize productivity, because bonuses ride on the company’s overall success, according to the  e-glass weekly article. To read the full report go to http://news.glassmagazine.net/issues/2007-02-06/.

Training
An investment in training can positively impact employee retention.

“The more you train, the better off you will be,” says John Brandt, president of The MPI Group, Shaker Heights, Ohio. “When I talk to small firms, I often hear that they can’t afford to train their employees. Their excuse is that every time they train somebody, he or she leaves.” Their retention strategy: Keep your employees so ignorant that nobody will want to hire them, he says.

Overall, respondents to the National Glass Association Competitiveness Survey reported a median annual labor turnover rate of 10 percent. Survey respondents who provide employees with formal training experienced fewer turnovers.

“Companies training 16 hours or more per employee report annual labor turnover of 8 percent, while those that train less than 16 hours report labor turnover of 10 percent,” says David Walker, vice president of association services for the National Glass Association, McLean, Va.

On average, respondents reported offering a median 16 hours of formal training per full-time employee, per year. However, despite the positive effect employee training can have on retention rates, the majority of survey respondents said they allocate just 1.0 percent of revenue to training programs.

Employee empowerment
“Empowerment strategies are very important to the success of your business,” Brandt says. “First, you must hire well. Then you’ve got to train [your employees]. Your next job is to get out of the way.”

Personnel who have the opportunity to learn new skills and grow with the business are more likely to stay with the company. “Employees are increasingly looking for employers where there is an opportunity to grow and learn,” Brandt says.

In addition to technical training, teach your employees how to read financial statements, Brandt advises. “We are seeing more companies decide that they need to teach employees about the finances of the business. If you put employees close to your customers, they are going to be making financial decisions every day.”

At Lee & Cates, employees at each shop know their break-even point.  As a result, they are better equipped to make quick decisions on whether to take a job. “Every employee has seen what it takes to make money at their location,” Lee says.

As pricing pressures mount, more companies are falling into the “commodity trap,” Brandt says, neglecting their most valuable asset: employees. “Roughly 70 percent of the firms MPI surveys say they need to cut costs to be the low-cost provider. You’ll have to cut somewhere, and typically it will be in customer service or innovation. Eventually, your employees will see that the opportunities are not as good at your business as they are elsewhere, and your best employees will leave. When a ship sinks, the rats leave last.”