You know it. I know it. We all know it. Turnover in retail car dealerships is and historically has been high. It seems as if the struggle never ends. NADA’s 2016 Workforce Study recently came out and my reading of it kind of went like this: Read a sentence, sigh—Read—Sigh—head shake…You get the picture.
When I read that average tenure at dealerships has steadily gone DOWN (sitting at 2.4 years for 2015) I decided to write this article. Why? Because I believe that there are simple and easy to implement ways to reducing turnover at dealerships. I believe this because I have experienced it. I’ve experienced working for a dealer as head of HR with an impressive 26% turnover rate across three stores.
When looking at turnover departmentally, sales has the highest turnover. NADA states that overall sales turnover is 67%!!! (Luxury lines at 47% and non-luxury at a whopping 72%) We’ve all read the statistics about the thousands of dollars turnover costs an organization. While these are all true there is another soft cost not as often talked about. Loyalty. Customer Loyalty is built upon relationships…if sales staff is turning over before they have the chance to reach maximum productivity (3 years if NADA is to be believed)…how are they building strong customer relationships for the dealership? Why are they turning over? Is it because they aren’t loyal to you, their employer? Employee loyalty leads to customer loyalty. Loyal employees lead to lower turnover. Lower turnover leads to higher bottom line.
So, how can dealers effectively tackle turnover and begin making headway? It can be done.
- Make the decision. Sounds simple, right? But all action begins with a decision, followed by the commitment to follow through. So, make the decision to act for your organization. Make the commitment to your decision. That’s the easy part.
- Measure your turnover. It’s a simple calculation and easy to analyze and annualize. These numbers can be drilled down by department, position, voluntary termination, and involuntary termination with simple excel calculations. I also like to add a calculation for length of service. The patterns will emerge and tell the story of where your dealership needs to focus its program.
- Training for managers to slow down in the hiring process—hire for fit, aptitude, and past performance. In our industry, often managers make a hiring decision based on the first interview and they seem to want that warm body on the floor or in the bay. It’s been my experience that providing tools and training to assist managers in the interview process not only slows the process down, but allows them to delve deeper into the candidate’s past performance. I’m a firm believer that past performane is the best indicator of future performance—teach your managers how to dig down with behavioral interviewing questions. Hiring managers should also be well versed in your company’s culture, benefit offerings, and policies. The interview is the first impression for a new candidate and the really good ones want to know these things and they want to know what to expect. New employees are making a decision in the first few days after they are hired—Should I stay or should I go? If they decide to go, they will be looking for the next gig immediately and be gone within 30-60 days. What does your turnover report tell you?
- Create and implement a fantastic first day orientation for your new hires. I like to call it the “day before the first day” because while it is their date of hire, a good orientation should take at least most of the new hire’s first day. Be creative! Be welcoming! Heck, give them a company pen! There is a lot that can and should be included in a new hire’s first day. Get the some of the boring stuff out of the way—I9’s & W4’s for example. Throw in a PowerPoint presentation that explains the company history, culture, core values, awards etc. Does your dealership have a fabulous holiday party? Talk about it or other fun events. Talk about community involvement. Talk about why it’s great to work for you! Don’t forget handbook distribution, specific policy acknowledgements, and explanations. Some dealers are paper based, some have electronic polices and some even have it all in a 3rd party software. No matter the method, you can come up with a process that works for your company. It’s also a great time for new hires to complete any mandatory trainings; for example, techs and lift training or sales and service safe driving training. Since the implementation of Obamacare, many companies went to a 60 day wait period for benefits—the day before the first day is also a great time to explain the benefit options and enrollment method to new hires. In the end, your new hire’s day before the first day, should be authentic, welcoming, a little boring, and very informative and given by someone enthusiastic about working for you. A great first day goes a long way in turning that stay/go decision into YES, I am staying.
- Follow up with your new hires. Don’t send them off after a great introduction to your company with just a good luck wish. Introduce them to their new team (maybe even have employees lined up who will show them around) and take them to their manager for specifics on the next day. Check in on them, see how they are acclimating, if they have questions etc.
Make a commitment to follow through with your new hires for at least their first 90 days—it will make a difference.