As we all know there is an ongoing tech shortage and with the recent pandemic, it hasn’t gotten any better. In fact, it may now be harder than ever to find qualified techs to bring on to your team. Pay rates can only vary so much, so shop owners need to get creative if they are hoping to attract (and keep) the right people.
- Health Insurance – If you only offer one benefit, it should be health insurance. This can be a huge deciding factor for potential employees because health care can be so expensive. It is such a large out-of-pocket expense if not offered by an employer. By picking up the health insurance as an employer, wages aren’t being increased which means payroll taxes and workers comp is not increasing, so that’s a nice little perk for you as a shop owner. Also, take the time to educate your employees as well – what they pay on health insurance is a deduction for them on their W2 payroll. So, if they make $1000 per paycheck, but $200 goes to health insurance premiums, they are only being taxed on $800. (This will also save you some FICA and Medicare taxes by offering it pretax for the employees.) Remind them that only company-sponsored plans offer this deduction – if they go elsewhere for health insurance, even if it is cheaper, it will cost them more in the long run because there is no deduction. They would be using after-tax dollars to buy that vs pre-tax if done through the company.
- Dental Insurance – This is low cost for you as a shop owner, and arguably just as important as health insurance.
- Vision – This is the cheapest insurance out there. We even offer it to team members who do not participate in our health insurance. Vision is so important to the success of your business, and this is one more thing setting you apart from your competition.
- Retirement plans – Any sort of tax deduction always means you are spending money, but with a retirement plan you are essentially paying yourself. Offering this is a great way to entice new employees, especially with a company match. Think you can’t afford to match contributions? Raise your labor rate! Even raising it $2 per hour will cover more than enough to implement an employer match for retirement accounts. See our blog post on the best retirement accounts for shop owners here: https://paarmelis.com/retirement-accounts-for-shop-owners/
Other types of fringe benefits:
(Don’t be so focused on finding new talent that you overlook the team members you already have!)
- Tech training – Offer reimbursement for local or online courses to further your team’s education. Pay for them to attend educational conferences and events. To see why this is a smart investment, check out Hunt’s recent podcast episode with Travis Troy, owner of Honest Wrenches in Des Moines, IA. Travis shuts down his shop and takes his entire team to the VISION Training Expo in Kansas City each year. Listen here: https://paarmelis.com/business-by-the-numbers/
- Other team education – Help your bookkeeper, service advisor, or marketing assistant continue their education as well.
- Mileage reimbursement – Reimbursement is an expense, not income, so this is tax free money to the team members – and a tax deduction for the business. The current rate for 2022 is $0.582 per mile. If you need someone to go and pick up tools, or if your techs are taking tech classes, reimburse them for the miles they drove. You can also consider gas cards, especially right now with gas prices being so high.
- Tool reimbursement program – You can do an “up to” dollar amount per month. (Plus, find out if your insurance covers your team’s tools!)
- Cell phone reimbursement – If team members are using their phones to take photos for digital inspections, or make business-related calls, reimburse them for that. You don’t have to take care of everyone’s entire bill but consider a certain dollar amount per month.
- Have food/snacks available for your team – It may seem small but having snacks and drinks available to your team at the shop can go a long way as far as them feeling appreciated and cared for.
- Creative hours – Many shops have moved to a 4-day work week. Some are only closed on weekends. Others are open seven days but offer rotating schedules so not everyone is working weekends all the time.
- Gym membership – As long as it’s offered to everyone, the cost can be deducted. Some gym memberships can be pricey, so offering that to your team is a great benefit.
- Buyer’s Club – Costco or Sam’s Club. These stores can save people lots of money but come with hefty membership fees. Taking care of those annual costs is just one more way to set yourself apart.
You may think you can’t afford to offer these benefits in your shop, but truthfully, you can’t afford not to. It is not going to get easier to find qualified techs or other team members, at least not any time soon. Set yourself apart, take care of your team, and the rest will take care of itself.