Industry pressures also affect the retail side. Dealers are seeing markets consolidate and product sales margins decline. That’s why the human capital side of the automotive equation is becoming more critical than ever to the industry’s success.
In taking a look at the dealers who made it through the recession, a common theme in their strength is how well these sellers support their employees when the company isn’t as successful. Those that adopted the people-first strategy weathered the economic downturn.
Today, while sellers may not be faced with extinction because of insufficient sales, they’re still facing problems addressing the costly talent gap, struggling to find top salespeople and company technicians, and attracting millennials from all other fields. That’s no surprise in an economic climate with the unemployment rate at the lowest in nearly five centuries and companies such as Amazon apparently determined to upend the minimum wage.
No matter the financial conditions, you need good people to support your business. And these talented employees are going to be in demand.
At Hireology, we have an expression for this phenomenon: the Applicant Economy.
I believe that developing a hiring sales process to target high-performing human capital not only will factor into the biggest trends for 2019 but also will serve as a key aspect in the industry’s success over the following five years. Here’s what we see as the three biggest trends within 2019.
1 . Addressing the “Brand Tax” in finding and retaining top talent in the car industry
What happens when automotive retailers — an industry that does not have the best reputation or even recognition with consumers, especially millennials — have job openings? They will pay a steep “brand taxes,” by both paying more than market value on recruitment efforts and promotion via job posting systems.
To circumvent the particular brand tax, dealers need to much better commercialize their website and external-facing brand. Just like it’s important for the consumer aspect of a dealership website to be convincing, dealers need to ensure that jobs may be easily found on the career section of their website. The career section should include an overview of the car dealership culture, strong job descriptions and an overview of career paths and benefits. To further avoid the brand taxes, dealers need to make sure they’re optimizing their recruitment spend similar to how that they’d optimize their consumer advertising spending budget.
2 . Adopting the people-first strategy
In the current labor market, there is a top echelon of talent for which all companies should compete. Top talent tend to be not just browsing job boards. They may be leveraging multiple channels to search for work and will have many choices and expectations.
Implementing a people-first strategy helps dealers build and engage a larger pool of these candidates. Beyond recruitment marketing, dealers should showcase a strong company culture, ongoing learning opportunities and other perks that can help their brands compete in the market.
Dealers that attract and hire talented applicants are not only investing in their people but in the dealership. In time, these employees will bring their own passion and energy to the company and make clear that they value their own work.
- Increasing the HR function to a management role at dealerships
Payroll can account for at least fifty percent of a dealership’s operating costs — if not more — so there’s small margin for error with bad hiring practices, weak onboarding, higher turnover, etc . Yet, when I speak with human resources professionals at dealerships across the nation, I constantly hear their annoyance at lacking the bandwidth in order to strategically approach talent acquisition and retention.
In the applicant-driven economy when human resources must put on so many hats — compliance, functions, etc . — dealers must place HR to succeed by investing in attracting, employing and integrating new personnel to their dealerships. This includes adding a HUMAN RESOURCES expert such as a chief human resources official to the leadership team.
By elevating the HR functionality and prioritizing company culture, sellers will decrease the time needed to employ and onboard quality employees.
If dealerships want to draw in top talent, 2019 needs to be the entire year that they shift their approach about how they market job openings. Sellers must market their open opportunities in the same way that they would the cars on the lot in order to win the Candidate Economy.