High employee turnover is affecting dealerships and dealer groups across the U.S. — and if you’re a dealer principal or general manager reading this, then it’s very likely that you’re struggling with this too. Dealers average over 73 percent nationally across ALL OEMs. It’s so prevalent in the industry that FCA made it a major focus of their 2018 national strategy. While many in the industry, including OEMs as well as NADA, have tried to help dealers and draw attention to this issue, it’s still a major problem area for dealerships and groups nationwide.
Now, let’s explore some factors contributing to high employee turnover:
Not Investing in TRAINING: Dealers spend approximately $64,000 per month in marketing/advertising but they invest LESS than $1,000 in training or professional development for their showroom sales team, internet sales/BDC team, and even LESS for management teams! A key question here is, Why? Why spend $64K to drive traffic but less than $1K in the people on the front lines, talking to prospects, using all of the expensive technology purchased by dealerships (i.e. CRM, call tracking, DMS, etc.)?
Mediocrity: The average sales consultant delivers LESS than 10 units per month, while there are people who deliver 30, 40, 50, and even 100 units per month. If someone is working 40+ hours per week and only delivering eight units out for the month (when others have proven deliverability of units well beyond that) the dealership needs to train and help that person to be successful in his/her role. When employees do not see the potential for them to be successful, they will eventually leave to pursue other opportunities, without ever having the time and training needed to ‘Master their craft.’
Unfortunately, many dealerships tend to throw money against the wall rather than focusing on personal development and training for their people. (Check out the NADA 2018 Statistics.) This brings me to my next point, which needs to be addressed before anything else…
EXCUSES: Dealers/GMs need to understand the real reasons behind their organization’s turnover and to stop making excuses as to why they can’t find super awesome people. Instead of pointing the blame on your sales team, management team, BDC, etc., you must first ask yourself if you’re really doing EVERYTHING possible to attract, develop, and retain talent.
Here are some questions and areas to explore in your assessment:
Do you have an organization that talent would want to work for? Before answering this, take a fresh look at your:
- Employee Value
Package Proposition - Pay plan and benefits (i.e. are they appealing?)
- Organization’s level of appeal to female automotive sales professionals, as well as millennials, etc.
Do you have an awesome career page for your
business with…
- Employee video testimonials
- Five-star employee reviews from Glassdoor and Indeed.com (For some examples, check out the career pages for Nike and HubSpot.)
Do you have an onboarding strategy for each candidate (meaning strategies for brand new, no auto experience, etc. or do you have just basic training; or training for only one type of candidate?
Do you invest in training from this century?
Quality training should include information and materials with up-to-date content relevant to the current automotive retail landscape. Similar to how cell phones have come a long way from the ones on the market 20 years ago, automotive training has significantly changed too. Businesses that neglect to focus on perfecting their processes and training to meet the needs of today’s modern-day consumer, will not be able to compete with others that do. As an example, just think about Blockbuster and Toys “R” Us.
Do you have the right Curriculum?
Is your curriculum extensive, offering more than just the “Road to the Sale,” OEM product training, and basic CRM training from your CRM company? Do you have resources and training to build up each member of your team in all essential areas important to his or her specific role?
As an example, the training for a sales consultant should offer much more outside of the training offerings mentioned above. Important subject areas include entrepreneur/personal development insight on “How” and “What” to invest in for themselves when it comes to marketing/advertising, education, etc. They need to master ‘people skills’ (to communicate with prospects/clients, as well as with co-workers) and ethics.
Do you show your team that you’re there for them? Consider if and to what extent you do the following:
- Invest in them
Provide a clear career path/trajectory for them to follow that guarantees success and financial freedom.
How effective is your staffing approach?
First, do you have an untrained person in your organization handling H/R? If they aren’t trained, certified, experienced, or proving to be successful with this responsibility, why would you continue to approach staffing this way? Next, “How” extensively do you recruit? Are you just recruiting from websites like ZipRecruiter, Indeed.com, Craigslist or CareerBuilder; or from your employees? There is nothing wrong with those resources, but there are other important areas to focus on, such as:
- Developing relationships with universities, trade schools and high schools
- Intern programs
- Going to ALL of the local career day events to showcase your AWESOME job opportunities
- Recruiting for talent like professional sports scouts do with attractive offerings (i.e. sign-on bonuses)
- Offering referral incentives for HR candidates (only need to pay out if you hire someone and payout is over one year)
- Exhausting all possible options to discover potential candidates, including every single Best Buy, AT&T, Apple/Verizon store, restaurant, and bar in a 30 to 45-minute radius
- Leveraging conventional media campaigns (broadcast TV, radio, billboards) dedicated entirely to hiring/recruiting. (I’m not talking about adding a blip in a commercial that’s mainly focused on a sales campaign.)
Are you using social media’s paid and free tools?
Social media has free resources, beyond just posting on your page. For example, there is a feature you can activate on a Facebook business page that allows someone to send a resume directly to your inbox! You can also use the Facebook Ad Manager tool to run paid ads that target potential candidates.
Are you running campaigns that target people CURRENTLY employed at a dealership?
As an example, your ad copy might be something along the lines of, “If you are at a dealership (sales or service or even technicians) and you are not making the money you want, need, and deserve or they aren’t treating you right… CALL US.”
In closing, the key point is this: If you do not invest in building your team, you cannot make excuses about not being able to find or retain good people.