At first glance, the outlook for the rental environment should be a cause for celebration, especially when viewing the statistics.
According to recent industry research, the equipment market worldwide is in the midst of an uptick that’s expected to reach an estimated $145 billion within the next four years. Year over year, many rental companies have enjoyed record revenue each quarter this year.
Indeed, the rental market has shown a resilient bounce back from the pandemic. And the growth could be even greater if it weren’t for one ongoing challenge: labor shortages.
It’s a crisis that finds rental businesses on the short end of available skilled workers. It may, in some instances, be even worse for this industry than others. That’s partly because every transaction requires labor on the ship out and pick-up or return. Some rental operators tell us that if they could hire 50% more staff, they could increase revenue by 100%.
We see three problem areas that rental operators can tackle to address the labor crunch: recruitment, ramp up, and retention.
Recruitment
Talented people want more than a paycheck — they want to build a career. That means learning skills, working with high-growth teams, and adopting the best practices that make industry leaders.
Employers who have a forward-looking mindset that embraces modern technology and optimized processes will attract candidates with “the right stuff” to drive growth.
Ramp-up
We’ve heard rental operators estimate that it takes 3 to 6 months for a new employee to become fully productive in a sales operations role. That’s a huge burden on the company. The reasons for the long ramp-up in many cases are manual processes, distributed and siloed information, and outdated systems.
If a new employee has to ask a different person, hunt down a different spreadsheet, or read another old manual for each new process, then not only will the ramp-up take too long, the retention rate will suffer as well.
With a modern rental management solution fully integrated with an e-commerce storefront, all the information a new employee needs to learn and do their job is at their fingertips. Automated workflows can guide them through each step of each process.
Retention
Every employee has a maximum frustration threshold. It may be different for each person, but eventually people either leave, explode, or withdraw. None of those results are good for your company.
Employee burnout on sales ops teams leads to turnover, which diminishes the team’s capacity. If those headaches were bad enough to make an employee leave, they’ll be a lingering problem for the next one as well.
The best way to retain talented team members is to remove the blockers, headaches, and obstacles that prevent them from doing their job efficiently.
Rental Companies Have Longer Hiring and Training Cycles
Unlike other industries that might have a seamless transition, once an employee quits a rental company, they’re tough to replace due to their specialized skill set. Imagine having an employee who understands various audio/visual components and your complete catalog of products, then that employee quits abruptly.
To replace them, you have to find someone with the domain knowledge you need and then train that new employee on your entire product catalog and business processes. That’s what takes 3-6 months. And if the root causes aren’t addressed, the cycle will start again when the new hire burns out.
Owners Wear Too Many Hats
It’s one thing for the ownership to spend some time here and there on the warehouse floor.
Doing that type of labor every day, though? Not a good sign for your business.
Often, a rental company’s warehouse doesn’t have resources to enable speedy and reliable operations and delivery. Owners have to come down to the floor and pitch in to stay on top of order fulfillment.
Without consistent labor support, you’ll be stretched too thin. Management gets forced into multiple roles, and you almost certainly lose potential business.
Technology Tensions
Quite often, there’s a dynamic in the rental industry that plays out between two different generations.
On the one hand, veteran owners often place great value in personalized service and decades of industry knowledge. They would rather invest in customer relationships than in expensive technologies such as rental management software.
On the other hand, younger employees see the business value in modern technology and software. They bring a high level of enthusiasm for gaining new technical knowledge and want to use automation tools to improve the customer experience.
Younger employees don’t have authority to make purchases and owners don’t have the interest. As the generations increasingly find themselves in conflict, the stress and frustration erodes at the work culture, leading to more churn.
The Bottom Line Of Burnout
When people are burned out and exit the company, it doesn’t take a mass exodus to create a ripple effect that negatively impacts the business from a financial and operational standpoint.
While turnover can have a negative impact on a rental company, there is promise for those who choose to combat this by embracing technology. When technology enhances the customer experience and strengthens loyalty, it bodes well for retaining quality people.
One of the key ways technology can make a profound difference for rental companies is through automation solutions. Rēlentless provides rental systems integrations that streamline your operations, making work more productive, easier, and less stressful for employees. Not only does retention increase, it also improves your customer’s purchasing experience.
