Over the past two years, pay rates for mechanics right across the board have gone way up. This has left unionized shops in a bit of a disadvantage. In the past, shops that were unionized could be counted on as higher paying roles than other shops. There was usually a stigma involved with working for a unionized company and it was not always the most desirable, but typically the pay rate and the benefits package made up for that.
The problem started around March 2020. When the pandemic hit a lot of companies were unsure of how it was going to affect their business, and many decided to lay off technicians. This was especially the case with dealerships and large transportation companies. Only a few months later these very same companies scrambling to hire technicians but at that time much less were available for work.
For a variety of reasons, including stimulus packages, extended unemployment insurance and the need to stay home to take care of family, many technicians chose to take time off. To entice mechanics back many shops resorted to raising their pay rates.
This was easiest to do for a smaller independent shop, larger companies struggled took a little bit longer to adjust but by the end of 2020 right across the board mechanic pay rates had gone up. The only place this was not true was with Unionized companies. Union’s negotiate collective agreements years out with scheduled increases, usually these are very beneficial for technicians but in this case the non union shops leap frogged them. In a collective agreement an annual increase of 2-4% is fairly standard but from 2020 – 2021 Mechanic Pay ranges have jumped by 15-20% in many shops.
On top of having a hard time attracted new staff many mechanics also chose to leave the Union and join a private company who could offer a much higher pay range. HR has been scrambling to fill these roles. In the past they could call the Union hall or put up a posting but this was no longer getting the job done.
Over the past year we have fielded more calls from Unionized shops than I can ever remember, as part of our intake call we discuss what steps they have taken to fill the role as well as the specifics. Almost every time the reason for the opening was obvious, it was payrate. These shops were falling behind often by as much as $5.00/hour.
It is unlikely that there will be a true return to normal and much more likely that we will have a new normal. This is also a problem that is affecting Union’s in general, not just with Mechanic shops, as covered by the HR Reporter. It will be interesting to see how Unions adapt and what strategies they can adopt to become more attractive. I have seen many suggestions thrown around but not much action yet, I for one will be watching with interest. If you have any more questions feel free to give us a call at 1-833-937-3546.
