Socrates Says

High Demand Jobs

September 29, 2020/in #MondayBlogs, Don Shilling, Guest Bloggers, Personnel, Training/by learningwithoutscars

High Demand Jobs

This week brings our second guest post from Don Shilling. He talks about the not-so-glamorous world of high demand jobs. Don was born to this industry. In his own words:

I grew up in a construction family and worked for my Dad several summers during and after high school. Then while working on my degree at North Dakota State University I was hired by a construction equipment dealership. I started in their service department part time until I finished college. Then full-time service employment for a couple of years then transitioned into sales management. During the recession of the early 1980’s myself and three other managers started General Equipment & Supplies, Inc.

First as Sales Manager and eventually as President we grew our business from one location and 20 employees to 10 locations in four states and two Canadian Provinces and over 250 employees. Along the way we developed relationships with area Technical Colleges and created a College Tuition Reimbursement Program where today we Recruit a handful of new technicians annually into that program. Our company has also developed two Department of Labor Certified Apprenticeship Programs to fill hard to find skilled positions. I am currently semi-retired as Chairman of the Board.

High Demand Jobs

In my initial blog I discussed the fact that we need to be able to find good people and then train them. This seems simple enough, except what the Workforce Development Council defines as “High Demand Jobs” typically are not considered glamorous. High Demand Jobs don’t get a lot of attention when our youth are exploring their future careers.

Why is that? We find it easy to blame our educational system and all the College promotional materials out there that tout the excitement of degrees in computing or high tech. But, as they say, maybe it is time to look in the mirror if you want to lay blame. The “High Demand Jobs” are typically tied to industries who have allowed this to happen. Owners and managers within these industries have not taken the time to engage the educational system and demand equal time with our youth as they select their career options.

How Do Young People Discover Us If We Don’t Tell Them We Are Here?!

However, thanks to the Pandemic . . . maybe, just maybe, we have reached a time where we can turn that corner. What we have found in our local Workforce Development Council is the jobs that were lost during the Pandemic were tied to people who are perhaps under-skilled. In some cases, these were people who made employment choices early in their careers that were not focused on these high demand employment positions. In fact, most of the jobs that were considered “essential” during the Pandemic are also on the “High Demand Jobs” lists. Perhaps with only a little additional skills training we can help the now under-employed find a stable career that is also considered “essential”.

Industry needs to react to this immediately! As Ron Slee says at the end of each blog, “the time is now,” especially for all of us who employ people in these “high demand jobs.” It is time for us to pull together to support the Career and Technical Education sector as it begins the process of re-tooling our unemployed or under-employed.

By support, I mean something very simple: you need to get involved. Perhaps you can start an apprenticeship program, or connect with your local Career and Technical Education system and see what they might need to start a program that would benefit your labor shortage areas. You can work at recruiting our youth and consider helping the right candidates with educational expenses. Bring them into your businesses and show them opportunities they might have never imagined. Let’s get started! You are going to like what you see in the mirror when you do.

For further information on re-tooling your skills, please visit us at Learning Without Scars.

TESTIMONIALS

Why is calculating Absorption Rate so important for Equipment dealers?

Guest writer Tom Montgomery writes about absorption rates as a measurement tool in this week's blog post, "Why is calculating Absorption Rate so important for Equipment dealers?"

Absorption Rate Calculation has been a measurement tool used by equipment dealers since the 1960's. It is still a valuable measurement today.

In my work with equipment dealers all over the world I have found that the dealers that I consider to be on "the leading edge" measure their absorption rate every month.

This measurement tool is driven by the senior management of the dealership - it is not to be taken lightly. When senior management finds that the rate falls below their standards they immediate action to improve it.

Absorption Rate Calculation - here is the definition!

It is the percentage of dealership expenses absorbed by the gross profit generated from Parts and Service sales.

Sounds easy doesn't it!?

Not so fast!

Dealer's accounting methods vary greatly.

One example is the way the cost of goods sold is calculated in the Parts department. There are some dealers that include the cost of freight in the cost of goods sold to determine gross profit in the Parts department.

Is this the correct method? Many dealer principals insist on including all costs associated with running a Parts department. I believe it is the dealer’s choice. Most importantly, the dealer should be consistent in their measurements.

Another accounting variance among dealers is the calculation of Service gross profit. There are dealers that include all “benefits costs” in the calculation of cost of goods sold.

Again, if that is the choice made by the dealership then remain consistent every month.

Other dealers chose to account for this as an expense. What is the correct method?

The answer to that is found in another question.

What is the dealer trying to measure by calculating absorption rate?

The answer is, "Will the gross profit coming for the Parts and Service departments pay the expenses for the dealership"?

Some dealers might ask, "Are there any expenses that should be excluded in the calculation or is it all dealer expenses?"

Great question!

How should "interest expense" and "allocated expense" and "administration expenses" be treated"?

The dealer must be certain that interest, allocated and administration expenses are reasonable, controllable, and justifiable?

What does that mean?

Interest rate should be associated with accounts receivable and accounts payable (but exclude interest on mortgages).

Allocated and administration expenses should not exceed 10% of sales.

So, what is the target for Absorption Rates?

Is it 80%, 90% or 100%?

The answer is 100%!

Why 100%?

The dealers should want all expenses to be “absorbed” by the Parts and Service departments.

What advantage does the dealership gain if absorption rates are at 100% or greater?

It allows the Sales department to be more competitive in the marketplace.

There are numerous ways for a dealership to increase absorption percentage. The first thing that dealer principals may rely on to increase service absorption is to write more repair orders for higher amounts — sell more service.

Tweaking pay plans, training service writers, changing processes, and focusing on recalls make sense, but a great way to get a jump in absorption is to focus on your used equipment inventory.

Everyone in the equipment business already knows that used equipment sales generate more gross profit than new equipment sales, but sometimes they forget that the used equipment department should be the service department’s top customer.

That will start a sales cycle that will grow labor and parts sales and allow the sale of service contracts that increase future service absorption.

Lastly, loyal service customers is a constant producer of labor hours and parts sales for the used equipment department.

It’s important to support the service department through your used equipment; it will make the equipment more saleable, road-ready, and at the end of the day, the extra money will not affect the gross profit but will affect the bottom line for the service department.

The dealership’s goal should be to recondition more equipment in less time, because getting the equipment in the dealer’s inventory sooner will increase sales and profit for all three departments (Parts, Sales and Service).

Did you enjoy this blog? Read more great blog posts here.

For our course lists, please click here.

April 11, 2023

It is interesting watching two grown men argue about higher education. Santorum has called Obama a snob as he said that he wanted everyone to have a four year college education. The Obama backing off and saying he wanted more than just high school highlights a serious subject to consider. What should you do after high school?

I was with a client last fall and the room had about eight people. Three had Doctorates and four had Masters Degrees. I was the only person in the room without a degree, although I did have four years University training. I was wondering with all the educated people how were the “non-educated” going to make out. The problem today is that for many bachelor level degrees the level of Actual knowledge is not far above that which a high school leaving delivered several decades ago.

I keep watching the debates about education. We need smaller class sizes or higher teacher salaries. Several years ago I was asked to look at a project for the Los Angeles Unified School District. I think this is still one of the largest districts in the country. They asked me to look at their mobile equipment, school buses and the like, for maintenance and repairs. I asked to see the inventory list. They said they didn’t have one. Perhaps that is the first indication of some the problems in education. How is it being run? Well the first obvious area to look is at the school board level. Now you have to remember I am biased. I am a teacher. But one of the first places I would look is the school boards – or more importantly all positions in education that are not in the classroom. The ratio is all upside down. We have too many people doing things that are not in the classroom and not enough in the classroom. But that is the result of the political position for education. Everyone wants a job but not enough know what to do.

Which brings me back to the current debate university or everything else?

Look at the cost of a four year “College” education and compare that to the earnings of four more years of a work life. Today there is almost a $500,000 difference. At university faculties we are starting to have more vigorous debates about the value of the junior colleges and trade schools. The American public has been conditioned over the past four or five decades to want to have a degree for their children. Consider that an article in a recent Forbes magazine noted that 15% of parking lot attendants have a college degree. I don’t think that was what was intended with the push of parents to have their children have a degree.

Today there is what is called a “skills” gap. We have lots of job openings which for one reason or another go unfilled.

There is a huge need for technicians in America. Where are we going to get them?

This is a problem that won’t go away. In the 1900’s the under educated could pursue a worthwhile career and life in agriculture. In the 1950’s that became the production line. What is the prospect today for the under educated? We need to get our arms around this problem and start to fix it or ewe truly will have a lost generation… or two. The time is now.

February 28, 2012

High Demand Jobs

High Demand Jobs

How Do Young People Discover Us If We Don’t Tell Them We Are Here?!

For further information on re-tooling your skills, please visit us at Learning Without Scars.

Discover more from Learning Without Scars