University of Leicester research reveals 187% ROI on training in the motor industry

Posted by pt91 at Jul 08, 2011 01:52 PM |
Automotive companies that invest in training are reaping the benefits, new study reveals
University of Leicester research reveals 187% ROI on training in the motor industry

The University of Leicester's Dr Paul Spear.

Issued by University of Leicester Press Office on 8 July 2011

A study by the University of Leicester into skills-based training in the automotive industry has shown a return on investment ranging from 98% to 187% with benefits across the board, including raised technical standards, professional status, productivity, profitability and customer satisfaction.

The Institute of the Motor Industry (IMI) teamed up with leading players in the automotive industry (Allparts Automotive Ltd, Halfords Autocentres and Mercedes- Benz UK) to commission the independent piece of research assessing the impact of their skills accreditation programme, known as Automotive Technician Accreditation (ATA).

The University of Leicester research, over a 12 month period, covered accreditation programmes for a number of disciplines, from parts advisors to light vehicle technicians and customer service advisors.

The research findings highlighted the following:

· Increased profitability

· Improved Productivity and Employee Retention

· Enhanced Customer Service

Dr Paul Spear, from the University of Leicester conducted the study. He said,

“The use of ATA as a management tool to improve the performance at technician and customer service levels demonstrates clear benefits for each business and should encourage other automotive companies to engage with the IMI.

“The University of Leicester brought significant expertise in measuring and assessing the ROI of training to the IMI. This partnership has demonstrated the benefits of employer investment in skills and professional development to grow capability and develop commercial advantage. These results clearly demonstrate that personal development can be both enriching and rewarding for companies and communities.”

Sarah Sillars, OBE FIMI, Executive Chair of the IMI said:

“The study has concluded that the introduction of specific training and skills accreditation has provided a cross range of benefits to both individuals and the businesses who have invested in them.

“Accreditation has brought about a step change in the automotive sector’s attitudes to qualifications and skills. It has provided significant returns to both the employer, in terms of return on investment, but more importantly, to employees for their self - esteem, professional development and long term career path. It also continues to improve customer confidence in the industry. This is absolutely vital when competition is so fierce and many businesses are struggling to survive in the market place.

“We urge all businesses in the motor industry to read the findings and see for themselves the benefits of training and accreditation – this is undoubtedly bringing significant commercial benefits whilst also raising customer confidence in the industry.”

Linda Stansfield, Chief Operating Officer for the IMI said,

“The return on investment results show that accreditation makes sense for business performance. We now urge all employers who have supported ATA to continue investing in skills through accreditation, ensuring the technical competency of their staff remains current and up to date.”

Ends

NOTES TO EDITORS

For more information, please contact Dr Paul Spear on:

+44 (0)116 252 5988

Additional information:

IMI commissioned The University of Leicester to conduct the independent research over a 12 month period. The research findings highlighted the following:

Profitability

Allparts Automotive Ltd is a leading distributor of automotive parts, based in High Wycombe and distributing quality components through 9 branches in London and the Home Counties. In February 2009 Allparts opened a dedicated training centre at its existing premises in Hayes, West London. From this centre Allparts set up a structured training programme for all of their sales advisors, which culminated in Allparts being the first parts distributor to achieve 100% ATA parts advisor accreditation.

The study showed in 2010, the year after completion of ATA accreditation, the number of returned parts fell significantly - this provided considerable savings to the business and a return on investment of 136%. In real terms, ATA accreditation demonstrated that the parts advisors at Allparts were accurately fulfilling the vast majority of their sales orders first time. Allparts believe that good training aligned to ATA certification is the right formula for providing exemplary customer service levels and sustained industry leadership. It remains committed to the programme for its future sales advisors as its business continues to expand.

Adam Pucknett, a parts advisor for Allparts in Oxford, who was interviewed as part of the study said, “It’s good to have something to show for 18 years of selling car parts. It’s like CORGI (Gas Safe) for the motor trade – I’m very happy that it’s come along.”

Productivity and Employee Retention

Halfords acquired Nationwide Autocentres in 2010 and rebranded the business Halfords Autocentres. Nationwide Autocentres had introduced ATA Light Vehicle (mainly passenger car maintenance) in June 2005, shortly after the launch of ATA itself. One of the study’s findings identified that employee retention tended to be much higher amongst ATA accreditees.

Nationally, over 20% of Halfords Autocentres’ technicians have ATA. Comparing the performance of technicians with ATA accreditation to those without, the benefits were clear. Taking weekly gross profit performance as the metric, for example, ATA technicians, on average, performed better than non-ATA technicians: 

· ATA technicians, on average, returned 7% more gross profit to target than their non-ATA counterparts

· For every £1 invested in ATA the first year’s benefit to Halfords Autocentres exceeded £2. 

As part of the study, Stephen Prime, a Halfords Autocentre’s manager from Chelmsford, was asked what he perceived to be the benefits of ATA to his technicians. He said,

“They have a lot more confidence in their job role. Increased output to a higher standard and consequently better profit and earnings for all concerned.”

Customer Service

For customer service, the study partner was Mercedes- Benz UK. Research focused upon the role of “Customer Service Advisor” in the retail automotive sector. It looked at the performance of customer service advisors (known within Mercedes Benz UK as Service Team Managers). Their role is to interface directly with customers, managing the vehicle service and repair work process from initial customer contact and qualification, right through to the safe return of the vehicle to the customer. A comparison was made between those who had undertaken ATA accreditation and those who had not. The study showed a positive correlation between improvements in the Customer Satisfaction Index scores of their advisors and uptake of ATA across the Mercedes-Benz UK after sales network. The average increase also included vital measures such as customer retention and “fixed first visit”.

Service Team Managers (STM) and site branch managers reported very positively on the merits of ATA. Simon Barry from Mercedes-Benz UK Ltd of Cardiff said,

“It gives us credibility with customers and shows that we are willing and able to train our staff to the highest levels and ATA is the tangible evidence to support that. It helps us with our training process and to prepare staff to deal with our customers’ needs.”

The IMI opened its Professional Register on 21 April for applications from individuals who have proven they have the right qualifications and knowledge to practice professionally within the automotive sector, abide by a code of ethical conduct and continually maintain their professional standards by proving current competence. Accreditation demonstrates current competence and competence over time.

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