CRA Business News – Canada

By Gideon Scanlon

Toronto, Ontario — If there has been a theme in this magazine’s coverage of the Canadian collision sector, it has been its focus on the lasting consequences of social distancing.

It is the position of the editorial team that, while the challenges facing collision facilities during the COVID-19 crisis are immense, these problems will go away as quickly as they arose. The impact of the innovative solutions business owners are finding to overcome these problems will last far longer.

Even though business owners are still in the midst of a global crisis, there is already plenty of evidence that this is correct.

Prior to this virus, the qualified labour pool was not large enough to satisfy the demands of collision repair facilities. With social distancing, this problem was aggravated as understaffed collision repair facilities were forced to significantly reduce the number of people working on site.

According to a top-notch survey of Saskatchewan businesses conducted by the Saskatchewan Association of Automotive Repairers, almost three-quarters of facilities had let staff members go in the first month of the isolation era. Collision Repair‘s own research suggests that these figures are broadly representative of the situation across Canada.

Now, two months into this crisis, half of the facility owners Collision Repair has contacted about operating with a reduced team-size say that some of these cuts will be permanent. One-in-five facility owners or managers report planning to continue operating with significantly reduced teams.

It seems that these facilities have figured out a way to do more with less.

Of course, even for those facilities that plan to return to pre-crisis staff numbers, this news is significant. With permanent lay-offs throughout the automotive repair sector, the available labour pool will, for the first time in a long time, have a surplus.

This is not the only dramatic shift that will far outlast the social isolation era.

When collision repair facilities received the green light to continue to operate across Canada, many businesses immediately recognized the need to provide services that would dramatically reduce the infection risk (and the perception of an infection risk) consumers would face while seeking the services of repair facilities.

To accommodate this new consumer need, three-quarters of facilities report improving their approach to vehicle disinfection and six-in-ten repair business owners and managers report adopting new drop-off and pick-up services.

Most repair facilities that have made these changes expect them to be permanent. While one-in-three shops offering pick-up and delivery of vehicles expect to phase out the service after the end of social isolation restrictions, it seems hard to imagine all will follow-through on this plan. What business would willingly allow a competitor to out-perform them with a service they had previously offered?

A smaller, but significant number of shops reported other procedural improvements designed to reduce the amount of contact required of customers.

Close to half of the business owners contacted by Collision Repair reported making significant improvements to their payment infrastructure, a quarter had started providing more online reports to customers. Some have even reported coming-up with entirely contact-free repair processes.

As these improvements are likely to be one-off investments, it is difficult to imagine them being phased out, though it is still worth mentioning that no owner reports planning to reverse these improvements following the lockdown.

This is, of course, just the tip of the iceberg. Just as surely as many of the solutions collision businesses have found to operating through the crisis will last far longer than the crisis itself, so too will new procedures impact the way consumers and partner businesses will conduct themselves in the long-term.

Just this week, a major U.S. insurer–Nationwide–decided that its operations were not being significantly hampered by having the majority of workers operate out of their own homes.

Whether auto insurers and collision franchises come to the same conclusion in Canada remains to be seen. That some Canadian businesses will reach the same conclusion is almost certain. It has announced plans to sell-off the majority of its office space and keeping staff at home on a permanent basis.

While it may be difficult to predict exactly what impact this will have on operations, it is a safe bet that it will mean that a permanent reduction in the number of miles driven by Canadians–and the number of collisions– is on the forecast.

Credit to CollisionRepairmag.