OPE Dealer Labor Rate Study

According to an Ideal and c-Systems survey of dealers across North America, 56% said being short-staffed/hiring new talent would be a challenge in 2024. This is especially true with service technicians.

With this scenario on the horizon, the emphasis on retaining existing talent has never been more critical. OPE dealerships seem to be lagging in updating their labor rates, which may contribute to retaining talent becoming even more challenging.

Check the complete 2024 OPE Trends Report from Ideal.

Is it the work or the pay?

Adjusting labor rates isn’t merely about increasing pay. It’s about aligning your dealership’s compensation strategy with market realities and the value technicians bring to the table.

Taking a look at the labor rates in similar lateral markets, such as power sports, tractor, construction, and marine, the OPE industry is lagging behind. By adjusting the labor rate closer to standards in other parallel industries, dealers can increase their profitability without adversely affecting their customer base.

Labor rate comparison

Raising labor rates does not necessarily result in a loss of customers. The quality of service and overall experience you provide plays a more vital role in customer retention. For OPE dealers, this is an opportune moment. Consider reassessing your labor rates in the service department and evaluate what the going rate is in your region.

Labor rate by region

When contemplating a rate increase, ensure you:

  • Communicate Effectively: Before implementing any change, communicate the reasons and potential benefits to both your team and customers. Transparency fosters trust.
  • Maintain Quality: Remember, raising rates must always be complemented by delivering top-notch service.
  • Benchmark and Review: Continually monitor the market and customer feedback. This will help you make informed decisions and ensure your rates are competitive and fair.

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