Australia is currently suffering through cost-of-living pressures that we have not seen in decades (if ever). A trip to the grocery store and petrol station, topped off by a mortgage repayment or rent will have you quickly realising that your wage isn’t going as far as it used to. The result of this in our industry? Wage growth that would have seemed incomprehensible to all of us before the pandemic.
2023 has seen a perfect storm of factors that has resulted in candidates having all the power in the recruitment process, which naturally results in higher salary demands and thus wage growth. In addition to the cost-of-living crisis causing employers to increase wages in line with inflation just to keep their staff from looking elsewhere, we have also seen the continued trend brought on by COVID of people leaving the industry to pursue careers that provide more flexible work arrangements.
The dealership model makes it difficult to offer flexible work or work from home options and employees end up spending a lot of time in traffic and working long hours. Many people have noticed their friends and family working remotely and avoiding commutes, which has made them consider leaving their current jobs. We have observed this trend among both junior and senior employees.
However, this situation presents a great opportunity for businesses that are willing to break the norm and create an appealing work environment. Companies that adapt and excel in this aspect will thrive in the coming years. On the other hand, those that don’t make changes will struggle to attract good employees and will be forced to offer much higher wages to attract good staff.
To put it simply, there are a lot more available jobs in the industry than there are suitable applicants, and we aren’t just talking about technicians anymore.
Speaking of technicians, nothing has changed here. As the industry continues losing skilled staff to the mining industry, the dealership industry is still suffering from a major skills shortage. There is only one long term solution to this and that is apprentices! If you aren’t investing the time and money in bringing on more apprentices, you need to start ASAP.
Outside of apprenticeships, just about every position across dealerships and OEMs has seen an increase in the market rate required to attract talent and be competitive. As was the case last year, parts interpreters and service managers have led the charge.
Parts interpreters have started down the same shortage trend as we saw with mechanics 5+ years ago and as a result, salaries are starting to increase drastically to attract and retain good ones. It is a simple case of supply and demand. As employers struggle to find skilled interpreters, those that are applying for jobs will demand more money in order to make the move. Just like with apprentices, our best tip is to start investing in junior interpreters to train up, as well as targeting automotive interpreters looking to make the switch to our more exciting, heavier gear.
Service management is possibly the most loveless role within a dealership, working long hours and copping abuse from customers, resulting in many seasoned operators being burnt out and leaving the industry. As they have been for the last 5 years, service manager salaries are rising in line with the rates of their mechanics. Ultimately you need to be paying your manager more than their reports; therefore, the worse the shortage of mechanics is, the more you will inevitably have to pay your service manager to keep them happy. Incentivising service managers is becoming a lot more common. Whilst a high base is required, giving them a percentage of the profit of the department, or having a KPI structure is becoming standard across the industry – food for thought if you don’t already have this in place.
Salespeople are again not in as short of supply as some other roles; however, there is still some reluctance to move roles due to uncertainty and cost of living pressures. Manufacturing delays and stock shortages have somewhat improved so there’s now less risk in losing a pipeline of deals from their existing employer.
The issue around financial stability and cost-of-living is still of concern. This provides an opportunity to set yourself apart from your opposition by offering financial security by way of sign on bonuses or guaranteed commissions to entice new employees to their dealerships.
More generally speaking, we are seeing the trend of companies offering vehicle allowances instead of company vehicles as they are unable to get their hands on stock. Whilst this is understandable, you must keep in mind that a candidate who already has a company vehicle but is looking at your job will also not be able to get their hands on a new vehicle and as such will be deterred by the vehicle allowance.
We have seen many candidates withdraw their interest from a role on that basis, so where possible we strongly encourage you to do whatever it takes to offer a company vehicle instead of a vehicle allowance. If you are going to offer an allowance, make sure it has been increased in line with 2023 cost of living as running costs have gone through the roof and so has the cost of vehicles.
We signed off our 2022 Salary trend article last year by saying “It’s a candidate’s world: we’re just recruiting in it” and absolutely nothing has changed. Whilst we have found a slight increase in application numbers compared to the lows of COVID recruitment, the cost-of-living crisis has resulted in candidates typically only applying for a new job for one reason: to increase their earning capacity. Keep that in mind as you navigate recruitment and retention as it is important to put yourself in their shoes as their mortgage or rent skyrockets.
All challenges bring opportunity, and this is no different. The companies that are empathetic and adapt will stand out from the crowd and find it easier than before to attract the best talent. We encourage you to reach out if you have any questions about how your business can become the market leader.
Salary Trends for Financial Year 2022-2023
Salary Trends for Truck Dealerships in Australia for FY22/23
NOTE: All figures are excluding superannuation.
Salary Trends for Construction Equipment/Earthmoving Equipment dealerships in Australia for FY22/23
NOTE: All figures are excluding superannuation.
Salary Trends for Agricultural Equipment dealerships in Australia for FY22/23
NOTE: All figures are excluding superannuation.
Salary Trends for Manufacturers & OEMs in Australia for FY22/23
NOTE: All figures are excluding superannuation.
Teamrecruit is Australia’s most established recruitment agency specialising in truck, earthmoving and agricultural machinery dealerships in Australia, New Zealand, the South Pacific and Southeast Asia. Find out more about Teamrecruit and how we support employers and candidates in the dealership industry.
