Navigating labour market challenges in Canada’s auto care sector
It is no secret that the auto care industry has been affected by labour market challenges, which especially impact productivity and profit. In order for the industry to successfully combat these issues, there needs to be an understanding of why this is happening, and what needs to be done moving forward.
On November 29th, 2023, AIA Canada hosted a webinar, based on the Labour market research report, to provide audiences with the “why” behind these challenges. Hosted by AIA Canada President and CEO, Jean-François Champagne, CAE, this webinar provided attendees with insight on the current state of the automotive labour market.
Jean-François Champagne was joined by AIA Canada’s Vice President of Government Relations and Research, Alana Baker, and Dr. Mauricio Zelaya, partner and national economics leader at Ernst & Young LLP to help further understand these challenges and where the sector can go from here.
Labour trends in Canada’s auto care sector
Canada’s auto care sector has been experiencing numerous labour market challenges. These challenges are primarily due to a significant talent shortage and the slowdown of apprenticeship programs.
Dr. Mauricio Zelaya emphasized the importance of the lack of apprentices—where are they going? What other programs are they seeking out? And, without new talent from these programs, says Dr. Zelaya, this is concerning for the future.
“It appears that workers are attracted to industries such as construction, manufacturing and transportation—primarily due to better compensation. The skills acquired in auto repair, like mechanical aptitude and manual dexterity, are transferable and valuable in these fields.”
In addition, the shift to electric vehicles (EVs) has been a significant player in these labour market challenges. EVs are evolving at an incredibly fast pace, resulting in the need for constant up-skilling and continuous training from experienced technicians and new technicians that have just entered the industry. In turn, some may choose not to enroll in continuous or up-skilling training, causing a shortage of workers that are certified to work on EVs.
Collision and repair shops reported difficulty finding qualified or experienced applicants for automotive service technicians, automotive tire technicians, and body repair and paint technicians.
Identifying barriers in the auto care sector
While the trends and challenges in the labour market have been identified, Dr. Zelaya and Alana Baker dove deeper into the why behind it all. Aside from emerging technologies and slowing apprenticeship numbers, why is there a shortage?
It can come down to a few deciding factors, said Dr. Zelaya. This can be because of the industry’s reputation, lack of diversity, entry costs, wages, and low retention rates.
“Why are these technicians leaving? Our industry has made some interesting findings regarding this high turnover. For example, 47 per cent of technicians said higher-paying job opportunities elsewhere was a factor. When faced with better compensation, naturally, it is not a surprise that some technicians choose to explore these opportunities.”
“But it is not just about compensation. Technicians are also leaving due to a lack of a clear career path in the industry. For example, we found that many felt that there was limited room for growth or some feel stagnant in their current roles.” says Dr. Zelaya
Low employee retention is one of the dominating factors in the talent shortage today. According to the report, 56.2 per cent of workers between 18 and 24 years of age switched industries, and for those aged 25 to 54, 28.4 per cent have left the industry.
“We also discovered a significant difference in turnover rates between different age groups within the industry. Specifically, the turnover in the younger age group was nearly double that of those in other age groups. This finding further confirms that they need to prioritize efforts to attract and retain younger talent in the auto care sector.”
Overall, broader economic issues are impacting the auto care sector. While one reason is due to the rising costs of living, other reasons include:
- The slowdown of the used car market.
- A decrease in vehicle registrations.
- The added expense of repairing and maintaining older vehicles.
To solve these issues, and to ensure that Canada’s auto care sector thrives in the future, there are a few factors to consider, says Dr. Zelaya.
“For one, the first thing to do is empower tradespersons—this will be the biggest factor in driving change. Secondly, there should be enhanced collaboration between the government, academic institutions, and other organizations for cross-trade partnership, training opportunities, and career pathways. This will help attract more talent across industries and carve clear career paths for a wide demographic. Finally, careers in the auto care industry should be broadcasted—there should be increased awareness to improve the perception and access to the industry.”