In November, UAW leadership successfully ratified a new 4½-year contract with Detroit’s Big Three—Ford, GM and Stellantis—after six weeks of targeted strikes that stopped production in the most profitable plants for all three manufacturers and expanded to include 45,000 UAW workers at its peak. The deal will collectively cost billions in increased labor costs over the term of the agreement, with Ford estimating that the deal will increase labor costs by approximately $900 per vehicle.

Brands directly impacted by the strike are already feeling the pinch on monthly allocations, and this, combined with high interest rates, means fewer new cars on the road in 2024. On top of that, ongoing supply chain challenges mean that repair work is taking longer and is sometimes a temporary break-fix rather than one-and-done.

Bottom line? All of these challenges are going to put a strain on people, operations and profits as dealers fight on the front lines of customer engagement and retention.

So, as dealers, what are your options?

Focus on what you can control inside of the house.

Better Hiring

For 2024, recruiting will focus more on finding the right people rather than just finding people. Many dealerships will benefit from working with outside partners to accomplish this, and a carefully defined recruiting strategy and plan make all the difference.

The Job Description

Great recruiting starts with a great job description. If you’re like most managers in a dealership, you probably can’t remember the last time you looked at one.

A great job description includes an overview of what the job is supposed to do as part of the overall organization, describes the essential job functions (not goals or tasks) and outlines the key knowledge, skills and experience required from the incumbent in order to be successful.

The best job descriptions include information about the dealership, what’s important to you and what kind of person will be successful. Employer branding—the work that we do to differentiate one employer from another to candidates—is some of the most undervalued marketing work that you can do, both as an employer and for the business.

Customers want to come to dealerships with great people and they will studiously avoid those that don’t, especially for service.

In a recent job description review that we did for a dealership, service roles lacked a clear description of the essential job functions, including physical demands of the job. It seems obvious, right? Unfortunately, the omission left them vulnerable to a lawsuit based on requests for accommodation under the ADA. Be sure to include whatever is reasonably necessary to do the job. Think lifting and how much, bending, standing for long periods, etc.

Additionally, they didn’t highlight the amazing culture that this dealership enjoyed both locally, as an employer of choice, and nationally, as one of the top performing dealerships for the brand. We added a section at the top of the job description titled “Who We Are” and told the story in 150 words.

Every dealership and every management team are a little different. Figure out what’s important to you and what you’re great at; it’s your DNA and it’s unique to your organization. Put that in the job description and you’ll find better quality candidates who genuinely want to work for you, not just whoever has the highest hourly rate.

The Interview Process

Generally speaking, the interview process in dealerships is often… a little light. Most post a job on Indeed and then invite applicants to an interview that focuses on biographical information and skills but doesn’t really evaluate anything. Then, 60 or 90 days later, they’ve got a different problem.

At its core, great recruiting is all about getting the candidate to tell a story. It’s called behavioral interviewing and statistically, it’s the greatest predictor of performance.

Behavioral questions ask the candidate to “Tell me about a time when…” and insist that the answer is both specific and individual to the candidate and their achievements. You’re not looking for the right answer, you’re looking for their answer and how well that answer fits with how you work.

At a management level, assessments can also be helpful. We use them to inform the interview process and ask better questions rather than as elimination criteria, which we generally don’t recommend for dealerships.

You can opt to dig into behavioral competencies to decide what you want to evaluate for each job role or you can start with core organizational competencies that describe the behaviors that demonstrate your culture. For most roles, we recommend Korn Ferry’s leadership architect for their Behavioral Competencies framework and interview questions.

Alternative Sourcing

Aside from job posting, consider employee referrals and direct sourcing.

Outsourced recruiting is all about finding the right person for the right job at the right budget. Direct sourcing is gaining ground in automotive, and the best dealerships are reaching out and contacting candidates directly through referral networks, social media outreach, and employee referrals. Think of it like cold calling for a job opening with some online collateral to back it up.

Better Performance Development

Customer engagement and retention will be increasingly important as allocation and parts issues increase over the coming months. The fact is, customers will only wait so long (for most brands) and once past that time frame, they will move to another brand.

However, properly trained sales and management teams can work to protect the customer relationship by proactively and transparently communicating with the customer about what is happening and why.

In fact, the number one issue facing GMs isn’t finding people—it’s keeping good people engaged and knowing when and how to develop them. CSI and sales performance are a good starting point for diagnostic information, but what do you do when you know you have a problem?

Two years ago, dealerships hired people relentlessly to meet growing demand, however, few offered structured development plans that created consistency in the customer experience. Many new hires were left to their own devices.

Next year will be the reckoning. The best dealerships are already implementing processes to onboard consistently and manage training more effectively—sometimes leveraging tech and nano learning opportunities to meet the employee when and where they need it.

Onboarding is another key to success. A 30/60/90 day onboarding program goes beyond typical administrative onboarding and focuses on what’s required for effective performance—technically and relationally. The peer relationships are especially critical because they underpin employee engagement.

Better Layoffs

The reality is many dealerships are looking at layoffs in 2024. These may be driven by organizational or individual performance issues—but in both cases, preparation is critical. Plan it with an experienced HR partner or legal counsel and prepare the conversation in advance.

When we are supporting a dealership with layoffs, we script the conversation in advance. Even now, decades after my first restructuring, I still read and review scripts before layoffs.

Termination conversations are typically 5-7 minutes long. The script keeps us from getting off topic during the meeting, ensures that we cover all key points if there is a separation agreement, and it helps us to deliver a difficult message with kindness, regardless of the circumstances.

Even in cases where we are terminating for cause, the notification is about the performance issue, not the person’s value. We do this for the benefit of the impacted employee but, even more importantly, for the retained organization that will see, feel and identify with the way we treat people on the way out.

Better HR Partners

Lastly, the best dealerships are reviewing how they handle HR.

Some will continue to manage it in-house but engage outside support for project-based or strategic work to augment and develop their internal teams. Others have decided to outsource it completely to a partner who works and acts as if they were inside the house. While these are not, strictly speaking, cost saving initiatives, they do save money in the long run through fewer mis-hires, fewer performance issues, and lower legal costs.

Whatever the approach, it is clear that it’s much harder to go it alone. A vendor that truly operates as a partner makes all the difference.