Dateline: NH, Summer 2016

Understanding NH's Labor Supply and Demand

Peter McNamara
Peter McNamara

Peter McNamara, NHADA President

In recognition of the continued concern with the labor shortage, the NHADA approached the Community College System of NH (CCSNH) in late 2015 to help its membership understand the labor supply and demand dynamics in NH for occupations critical to their operations. Of specific interest were the following occupations:

  1. collision repair technicians,
  2. service advisors,
  3. service managers,
  4. parts counter workers,
  5. sales associates,
  6. entry level automotive technicians and
  7. advanced-level automotive technicians.

Below are excerpts of the final labor market analysis of the industry, conducted by CCSNH, as well as the next steps NHADA is planning.

Industry Employment Outlook

The motor vehicle retail and repair industry is a significant contributor to the NH economy, providing a wide range of high-quality, well-paying employment opportunities. In 2014, there were approximately 1,500 NH-based motor vehicle businesses employing 13,900 and paying $700 million in wages.

An occupation forecast issued by New Hampshire Employment Security (NHES) was used to develop an estimate of employment growth and job replacement for the motor vehicle and repair industry. It is anticipated that approximately 300 total jobs will open between 2015 and 2017 for the identified occupations within the motor vehicle retail and repair industry.

A survey of the NHADA membership was conducted in December 2015 by CCSNH to "ground truth" the forecast, based on NHES occupation projections. A total of 151 valid survey responses were collected from businesses and included both franchises and independent firms and new, used and other motor vehicle dealers.

The survey indicated that NH motor vehicle dealers are currently experiencing challenges in acquiring the skilled labor they require. Based on the survey results, it is possible there are as many as 900 unfilled positions across all of the surveyed employers or approximately six unfilled positions per business. Specific occupations experiencing high levels of unfilled demand are: 200 automotive advanced-level technicians, 200 automotive entry level technicians, and 250 sales associates.

Survey respondents anticipate that the total number of employees in the occupations of interest will increase from current levels at 4,300 to 5,100 by 2020. This is approximately the same size as the current number of unfilled positions at surveyed industry members. Based on the survey results, the total net increase expected in employment across the entire industry could be as high as 1,600 from 2015 to 2020.

Unfilled positions for other occupations reported in the survey were: sales associates, 245; parts counter workers, 82; service advisors, 76; collision repair technicians, 69; and service managers, 22. The projected increased demand for auto technicians and other key occupations coupled with several opportunities identified in this report could serve to cost-effectively increase the supply side of the labor force.

Through strategic interactions, CCSNH and NHADA could help to reduce the current imbalance in labor supply and demand. This would serve to provide NH citizens with high-quality, well-paying jobs while boosting the financial health of a key industry sector in the NH economy.

Key Recommendations

The report's key recommendations include:

  1. CCSNH and NHADA should utilize the basic findings of this report to investigate changes to training capacity in the NH marketplace related to the motor vehicle retail and repair industry. A next step could be a more detailed market analysis that clearly identifies recruitment and program design opportunities. An outcome of this analysis would be to identify geographic regions that feature labor pools where there is the potential to increase enrollment in the CCSNH but that are missed by the current training programs available. CCSNH and NHADA could also examine strategies to increase the number of automotive students retained in programs and promote program completion.
  2. Considering the costs of adding new community college auto tech programs, CCSNH and NHADA could explore the use of existing Career and Technical Education (CTE) centers, especially in populous areas like Rockingham County where there is no existing college program. CTE centers may already have all or most of the needed equipment and could partner with existing CCSNH instructors if the availability exists.
  3. Explore the possibility of expanding the current two-year high school auto tech training programs into three-year programs. The additional year would result in more experienced high school graduates and possibly allow more advanced training beyond the current maintenance and light repair.
  4. Another area of opportunity involves training sales associates, parts counter workers, and service advisors through formal, but accelerated training programs through CCSNH. The training could include both sales techniques combined with the development of domain knowledge in automotive technologies. This would provide a higher skilled sales associate, service advisor, and parts counter worker, who would generate additional revenue for dealers through increased upsell. Stackable certificates and credits could be applied to these programs to provide career pathways for furthering an employee's education to the Associate's and Bachelor's degree level.

The NHADA workforce group will work on implementing the above recommendations along with other steps to help improve the workforce. The shortage is substantial and the labor pool competition is fierce. This project of improving the workforce labor pool will be an ongoing process over many years. This report provides the NHADA with a strong foundation from which to improve its existing efforts.