How Do Your Shop’s Experiences Compare? New England Automotive Report’s Inaugural Survey Results: Part One

New England repair professionals share their insights on parts delays, the tech shortage, insurance relations and more.

Collision repair shops contend with more challenges than many industries on a regular basis, but the past couple years have seen unprecedented developments – from technological advances to the increasing prevalence of OEM certifications to escalating concerns with insurers, it seems like you’re forced to deal with all of it. But you’re not alone in your frustrations! How are other shops in Massachusetts attracting new talent? Are they experiencing the same parts delays? Does anyone in the Commonwealth collect an acceptable Labor Rate? The answers to these questions and many more fill the following pages, so keep reading to check out the results of the inaugural New England Automotive Report Industry Survey. Thank you to all the shops who participated in this survey. We hope that you find this information enlightening and useful.

How long have you been in business?
1-5 years: 3%
6-10 years: 3%
More than 10 years: 94%

Are you on a referral or program?
Referral: 9%
Program: 12%
Both: 27%
No: 52%

If you selected “yes” to being on a referral, how many referrals are you on?
1-5: 83%
6-10: 17%
More than 10: 0%

If you selected “yes” to being on a program, how many programs are you on?
1-5: 100%
6-10: 0%
More than 10: 0%

How many employees do you have, including yourself?
1-5: 27%
6-10: 27%
11-20: 37%
More than 20: 9%

What is the age of your oldest employee?
30-40: 0%
41-50: 6%
Over 50: 94%

What is the age of your youngest employee?
18-25: 64%
26-35: 18%
Over 35: 18%

How many employees have you hired in the last year?
None: 18%
1: 43%
2-4: 33%
5 or more: 6%

How many employees have you lost in the past year?
None: 33%
1: 24%
2-4: 40%
5 or more: 3%

Where do you look to hire new employees?
Word of mouth/referrals: 39%
Online: 42%
Local vocational schools: 21%
Everywhere: 9%
Not searching: 9%

Articles have been written and songs have been sung about the ongoing technician shortage. It seems that fresh talent is nowhere to be found, yet 82 percent of survey respondents indicated that they hired at least one person in the past year, which begs the question – how did you find them?! The answer seems to be “perseverance.” Of the 39 percent of shop owners who reported hiring at least two employees, 62 percent indicated that they look multiple places to find qualified workers, but their efforts appear to be paying off! Of course, that’s not the case for everyone; one shop owner who lost an employee this year admitted, “I’ve given up for now,” while another lamented, “It’s just about impossible to find workers at all.”

Have you found difficulty in refilling positions due to the COVID-19 pandemic?
Yes: 67%
No: 33%

Although some survey participants believe that the pandemic has presented additional challenges when it comes to refilling positions, blaming unemployment extensions and “a lot of excuses,” the majority believe that the hiring difficulties they’ve faced correlates directly to the suppression of Labor Rates in Massachusetts. Some of their comments included:
“It’s difficult to fill a position at ANY time, due to low pay.”
“Employees expect higher wages based on other industries, but our ability to pay has remained the same.”
“Nobody wants to work for the salary we are able to offer.”

How has your ability to attract and retain employees changed over the past year?
While 24 percent of respondents indicated that they’ve seen no change in their ability to attract or retain employees, 38 percent of that group also acknowledged their internal efforts that have improved their ability to hire and retain employees, such as by investing in tools, equipment and training and through team building activities. One shop owner suggested, “Paying them a higher salary gets them in the door and keeps the current employees here.”
But that’s not always possible. In fact, 21 percent of surveyed shop owners feel that their inability to offer higher wages prevents them from attracting quality employees.

“Most want more than I can afford to pay, plus I cannot offer the benefits that other trades can offer them,” one shop owner acknowledged.

“The margins are too tight; I can’t pay these guys what they are truly worth,” another shop owner agreed.

Conversely, some survey participants (18 percent) believe the problem lies in a lack of skilled workers, while 21 percent blame a lack of interest in the trade.

“Nobody wants to work,” one shop owner claimed. “Sign-on bonuses aren’t even attracting prospects.”

Several respondents suggested that “Many are leaving our industry for better opportunities.”

What is the annual salary of your lowest-level employee?
Less than $25,000: 6%
$25,000-$35,000: 39%
$35,001-$45,000: 39%
$45,001-$55,000: 13%
$55,001-$65,000: 3%

What is the annual salary of your highest-level employee?
$50,001-$70,000: 39%
$70,001-$80,000: 16%
$80,001-$99,999: 16%
$100,000 or more: 29%

Are you familiar with AASP/MA’s legislative agenda for the current session?
Yes: 100%
No: 0%

Do you feel that your customers care about the issues facing the collision repair industry?
Yes: 46%
No: 54%

Survey participants were nearly equally divided on this issue, and although several responses suggested that consumers have noticed the low Labor Rates written on insurer estimates, others disagreed:

“They already think it’s too expensive.”
“Unfortunately, many think we are just whining. They see thousands of dollars in costs and think, ‘They must be making money.’”
“Most consumers just want their vehicle fixed with little hassle. Safety takes a back seat because the customer is not informed.”

As an industry, how do you think we can better educate customers?
About half of surveyed shops agreed that the responsibility for educating customers falls on the shop on a case-by-case basis, but others suggested that more can be done, such as “Ask all TV stations to do a special investigation segment on this topic,” send standardized emails and utilize targeted social media messaging.

“Shops must be educated first,” a respondent noted. “Then, the shop needs to educate their customers.”

Alternately, one shop owner believes the answer is simply refusing to entertain the insurers:

“Stay away from insurer programs completely so we are all on the same playing field. Get certified so you have the respect that will make customers listen to you.”

What do you think is the most pressing issue affecting shops today?
Not surprisingly, over half of survey respondents indicated that the suppression of the Labor Rate in Massachusetts has the largest impact on their businesses currently, especially in combination with trying to stay up-to-date with the technological evolution occurring on modern vehicles.
“The fact that our operating costs have significantly increased without the Labor Rate increasing has made profitability and obtaining new required equipment very challenging,” a participant observed.

The staffing shortage, lack of available parts and issues with insurance companies also continue to negatively affect shops.

Are you currently certified/recognized by an OEM to perform collision repairs?
Yes: 38%
No, but I’m working toward it: 27%
No, and I do not plan to become
certified/recognized: 35%

If you answered that you ARE certified / recognized by one or more OEMs, please list them below.
Certified shops mentioned a dozen manufacturers for which they’ve received the necessary training, tools and equipment to achieve their certification. The most prevalent OEM certifications referenced by survey participants included Nissan, Subaru and Honda/Acura.

If you answered that you ARE certified / recognized by one or more OEMs, what is your incentive to continue with the program?
OEM certification can offer many benefits for shops. Survey participants indicated that the main incentives for maintaining their status with these programs include access to the OEM repair information that allows them to ensure they’re making safe and proper repairs, improved access to parts needed for those repairs and leverage that can be used when billing insurers. The image it presents to consumers is another important incentive for these shops.

“We receive recognition from the customers, insurers and our industry as a qualified collision repair facility who is committed to quality and safe repairs,” one shop owner commented. One of his peers agreed: “It places us a level above the competition in the eyes of the consumer and insurance carriers.”

How do you feel OEM certification programs will impact your business?
My business will be affected in a
POSITIVE way: 58%
My business will be affected in a
NEGATIVE way: 11%
My business will not be affected: 31%

More than half of survey participants indicated that their businesses will be impacted positively by OEM certification. Those who do not believe their businesses will be affected offered comments:

“If the OEMs would provide actual hands-on training and check on the shops on their program, then the OEM programs would most likely be beneficial. As of now, they are just another form of DRP with the same players on them. VERY FEW of the OEM certified shops even follow the manufacturer’s repair manuals.”

“Unfortunately, OEMs are more concerned about aligning with insurers rather than our industry. They are not as loyal to the collision repair industry as the collision repair industry is loyal to them.”

“I will not even entertain one certification until Labor Rates are brought to a level to justify the added expense.”

A shop owner who believes OEM certification will negatively impact his business offered a similar viewpoint:

“We as shops can spend thousands of dollars getting certified to fix a certain brand. The cost is too much.”

How would you rate your current state of business?
1-3: 4%
4-6: 39%
7-8: 41%
9-10: 16%

Survey respondents rated their current state of business at an average of 6.7. While four percent of responses indicated business is at its worst (a score of one), no one gave a “best” score of 10.

Over the past year, have your sales increased, decreased or stayed the same?
Increased: 54%
Decreased: 11%
Stayed the same: 35%

Businesses worldwide took a huge hit last year when the COVID-19 pandemic hit, but as restrictions eased up in 2021, employees returned to the office. With more vehicles on the road, over half of surveyed shops reported an increase in business and more than a third remained stagnant, while only 11 percent saw a decrease in business this past year.

In your experience, which insurer do you find the most difficult to deal with, and why?
Shop owners identified 10 insurers in response to this question, but the three most commonly mentioned carriers were Allstate, GEICO and MAPFRE.

“GEICO and Progressive have been my most difficult to deal with because they’re not interested in a quality repair.”

“Allstate writes for the use of the lowest possible parts prices from multiple vendors – including vendors that are located outside of our state!”

“MAPFRE and GEICO are neck and neck; they attempt to dictate the repair process, regardless of their ignorance of proper repair methods. They break the laws and are a general nuisance.”

“We do not accept work from Allstate or State Farm as they do not send appraisers out to inspect the vehicles, and they baulk at Massachusetts appraisal law.”

One survey respondent expressed sympathy for insurance appraisers:

“I get along with their staff appraisers. Many of them understand our concerns, but they can’t pay because their hands are tied by the claim handlers.”
Additional insurers who were identified as creating difficulties for shops include Vermont Mutual, State Farm, Progressive, Travelers, Liberty Mutual, USAA and Hanover; however, 15 percent of survey participants make no differentiation between insurers.

“They’re all the same,” one repairer claimed. “Faster, cheaper…Hooray for them and the hell with the body shop and their own policyholders.”

“They constantly mislead customers, twist truths and sometimes flat out lie about regulations,” another repairer agreed.

What is the current Labor Rate you are being reimbursed by insurers?
Less than $40: 12%
$40-$59: 88%
$60-$79: 0%
$80 or more: 0%

While a handful of shops (nine percent) acknowledged that they are reimbursed at higher rates by certain insurers on specific vehicles/repairs, all surveyed respondents indicated that the common Labor Rate paid by insurance companies to shops in the Commonwealth hovers around the $40 mark. Several shops are receiving as low as $39, while a few outliers’ Labor Rates begin as high as $42.

This travesty justifies one survey respondent’s belief that:

“The auto body industry is on a borrowed lifeline here in Massachusetts. Shops will be forced to close or sell if the industry does not receive a competitive Labor Rate like that of other trade industries. We cannot compete for good employees since they can receive better pay and benefits in a different industry. Today’s vehicles are more complex than ever, and accurate repairs to ensure occupant safety is a must; however, that requires major investments in training, tooling and equipment, which is harder than ever to afford and is simply not an option for many shops. Yet, we MUST repair vehicles properly and safely – not just for mutual liability reasons, but due to the simple fact that we owe it to our customers, friends, families and neighbors who are fellow motorists within the communities we serve.

“There is only one solution to keep the auto body industry from going extinct in Massachusetts: An immediate real Labor Rate increase that puts the industry within the competitive landscape financially to operate our businesses as necessary to attract and hire qualified employees who can make this industry a career, rather than a stepping stone job,” he continued. “The time has passed to discuss and negotiate what the Labor Rate should be. ACTION IS A MUST. We are all out of time!”

What do you think your Labor Rate should be?
$50-$59: 23%
$60-$79: 42%
$80-$99: 23%
$100 or more: 12%

Look for Part Two of our Inaugural Survey in our February issue.


Want more? Check out the January 2022 issue of New England Automotive Report!