The Independent Garage Association (IGA) recently released its ‘UK Independent Garage Labour Rate Study’ to put the value of technician labour into perspective. Here, PMM has pulled together the study’s key findings.
The IGA released its ‘UK Independent Garage Labour Rate Study’ at the beginning of November 2020 with the intention of highlighting how garage labour rates have changed over the past eight years. Back in 2012, the organisation ran a similar study named the ‘2012 Average Labour Rate Study’ and it is this that acts as the basis for the comparison. By comparing the results of the two studies, the IGA has uncovered crucial insight into the value of the garage sector.
The survey was conducted through 3,338 garages from across the UK. Despite the total average labour rate across the UK increasing by £5.88 from the rate recorded in 2012, this has not kept up with the rate of inflation. As it stands, the average labour rate is 6.7% below UK inflation.
What exactly does this mean?
Stuart James, IGA CEO, expanded on the findings in the Executive Summary within the report: “When comparing the two sets of data, it is clear that the independent garage sector continues to offer exceptional value to its customers. However, in real terms, the sector is falling behind inflation, meaning garage businesses are seeing diminishing returns year on year.”
It appears then that the sector is undervaluing its skills, content to put the customer ahead of the service providers. Another interesting finding adding fuel to the fire is that the actual cost of carrying out maintenance on vehicles is steadily increasing, largely due to the advances in technology – cost of parts, tooling, data licences, etc. all going up. However, if this is working in unison with inflation, then the question becomes, how is the sector adjusting for this? Well, the answer is that many garages are absorbing the increase in cost. A situation that simply cannot last in the long term.
Significant regional differences
Aside from the major finding highlighted by Stuart James above, the study also revealed the regional weighting of labour rates. It found that Northern Ireland had the lowest average labour rate of £40.55, closely followed by Wales at £40.61. Scotland and England (excluding those garages within the M25) had averages of £45.52 and £47.90, respectively. The highest by quite some margin were those garages located within the M25, at £55.48.
The report then goes on to break down these areas into smaller regions, analysing the results in comparison to 2012.
The report concludes by presenting the somewhat stark reality that garages cannot continue to absorb the increasing costs of vehicle maintenance. Although low labour costs may be appealing to customers in the short term, in the long term, such an approach may result in closures and increasing the ever-widening skills gap.