Written by 12:40 pm Feature, Home, Service Operations

How can Service Orgs Succeed in a Time of Inflation, Labor Shortages, and a Workforce Skills Gap?

Aquant’s 2023 Service Intelligence Benchmark Report analyzed how factors like inflation, a labor shortage, and a knowledge gap are impacting the service industry.

Service organizations have been battling constant change. COVID-19 continues to impact everything from supply chains to labor, and now the industry is contending with another challenge: economic uncertainty.

Aquant’s 2023 Service Intelligence Benchmark Report analyzed how factors like inflation, a labor shortage, and a knowledge gap are impacting the service industry.

Take a look at this year’s data and highlights to learn more. 

Our analysis encompasses data from:

  • 113 organizations, including service divisions within OEMs and third-party service organizations across manufacturing, medical devices, capital equipment, HVAC, commercial appliances, and more
  • More than 16.2 million work orders
  • Nearly 125,000 technicians
  • Over $8.1 billion total in service costs
  • An average of 3.8 years of service data per company

This year, we learned:

  1. Service is picking up again. With a 5% increase in field events and a 3% increase in the number of technicians in the field, service is experiencing a post-pandemic uptick. Mean Time Between Events has also increased by 32%, indicating that orgs are utilizing remote and self-service solutions. First Time Fix Rates are even up 2.3% since last year. 
  2. But organizations are not safe from inflation’s impact. Even with a general uptick in service outcomes, rising prices are diminishing economic gains. Service costs shot up 7% in comparison to the previous year due to rising parts costs, supply chain shortages, and more. 
  3. Even with slightly-reduced costs between service heroes and challengers, the knowledge gap still affects orgs significantly. More-tenured technicians are retiring faster than their replacements can enter the workforce—so the challenge is to upskill less-experienced workers quickly. On average, bottom performers cost organizations 67% more than top performers. In addition, the variance between top- and bottom-ranking companies has increased. The bottom line? Companies need to pay attention to the skills gap more than ever. If everyone had the knowledge and skills to perform like the top 20% of the workforce, service costs would be reduced by 21%
  4. Service organizations can’t control parts costs or inflation, but they can focus on areas within their control, like managing their workforce’s performance. With the correct tools under their belt, organizations can prioritize:
  • Closing the skills gap by hiring new techs and getting them ramped up faster. 
  • Reducing parts shotgunning by determining the best and most cost-effective part for the fix.
  • Solving equipment failures on the first visit — as opposed to making quick, short-term fixes that address symptoms but not the root cause.
  • Adopting a laser-focused approach to spending by reallocating resources and cutting costs where necessary. 

So, is it possible to set your organization up for success?

The short answer? A resounding yes! 

In fact, companies that embrace data-backed approaches are ensuring a path to success—especially because these insights allow them to measure every part of their workforce’s performance. They are able to see the entirety of their business model, take stock of what’s working, and make adjustments where necessary to preserve costs. Successful organizations are able to leverage technology to make the right fixes the first time around, utilize the right parts for a fix (which keeps costs low!), and allocate their resources appropriately. If service organizations hesitate to make changes now, they are risking greater economic impact in the long term. 

Ready to understand your business on a much deeper level? Read Aquant’s 2023 Benchmark Report to get an understanding of the state of today’s service industry and how your organization stacks up in comparison.

Want to stay up-to-date with the latest industry news for free? 

Sign up for our free newsletter by using the form below and we will send you our weekly newsletter that brings together our key weekly content as well as an update every time we publish a new industry resource. If you are a field service management professional the FSN Newsletter is an essential free resource you need. Join over 30K of your peers and sign up on the form below now!