Retirement Funds Are A "No-Brainer"
Everyone hopes to retire comfortably. But not enough businesses and employees are setting themselves up to do so.
According to the 2020 Ratchet+Wrench Industry Survey, only 44 percent of repair shops offer a retirement plan or 401(k). That’s roughly six percent lower than the national average, according to an ADP study. And for many in the industry, there’s a general sentiment that saving is “for the birds.”
But with the repair industry struggling to bring in enough new talent to fill its positions, offering incentives for technicians to choose your shop is going to become more important, says Greg Skolnik, an industry coach and owner of Motor Works auto repair in Rockville, Md. The dwindling talent pool means the best candidates will be hard to get without incentives.
“If you don’t have (retirement) benefits in place, you’re going to be left out in the cold,” he says. “Realistically if you’re a technician and you’re looking at Shop A and Shop B and Shop A just says ‘I want you to work hard and I’ll pay you pretty good,’ and Shop B says ‘well we have a 401(k) and health care coverage,’ … that’s important."
Skolnik has offered retirement benefits at his shop for more than 20 years. To him, it’s a no-brainer. It incentivizes prospective technicians and service advisors to work for the shop and provides tax breaks for the company.
“It’s not common enough,” he said. “Why would you not want to take care of your employees?”
Skolnik believes all that’s needed is a shift in mindset. Many companies have the ability to offer retirement plans, but don’t do it. And for shops that are living along the margins, there will be a cost in setting up retirement plans and committing money towards your employees’ retirement funds, but tax breaks will help offset the costs.
“A lot of owners can’t see in front of them,” Skolnik says. “Especially the ones living out of their checkbook. Their eyes are not up looking at the future. They’re not managing, they’re reacting. All of us have been there at some point. We just have to learn.”
Ratchet+Wrench will have more coming soon on profit-sharing incentives, including options other than retirement plans. Stay on the lookout for articles and podcasts on the subject in the near future.