You Got The Job... What's Next?

The search is over... You finally got the job or the candidate that you been longing for and it/they starts Monday.

What's next is the question most will ask.

If you are the employee, there is tons of information you might need, from hours, dress codes, licenses, company policies, taxes, compensation, training, team hierarchy and the list goes on. As an employer, unfortunately most are just looking for their return on you. In layman's terms, how quickly can they start making money from you. This would be fine if you were treated and cultivated as an investment but in most case scenarios your traded like stocks, keeping the ones that shine and dump the duds all by inexperienced home-taught day trader.

This why the term Onboarding doesn't exist in our business. Hell, Orientation is hardly even there. It's more like... Great to see you showed up on time, let me show you around. There's your desk, I'll get someone to set up your computer & email (code for we didn't know if you'd show), your business cards will be in later this week (same code), that's Steve over there, he's been here for ten years, got a question ask him, over there is the key room, here's the code, go drive a couple of cars and let me know what you think. Sound familiar? Of course it does as it happens everywhere.

The worst part is this is just part of the reason why this business's is challenged by turnover. It all starts long before the hire and continues way after. Too many people look to this industry as the Car Lot and not the Car Business as it should be. We define our businesses as what we did in the last thirty days and what we can achieve in the next thirty. We feel if we hit OEM targets each and every month we'll make our year. It's reality but it's also true, the math works but its a horrible way to manage an operation. 

Let's look at sales for a moment as it's the glory child of the dealership. 

If we look at the numbers, a single sales person for example at an average store they would be assigned a target of 10 cars per month, 12 months and given the national average of $50,000 per new vehicle sold this would result in $6,000,000 in revenues. With the NADA average at $4,800 per unit GP, $576,000 annually in profits or $115,200 in earnings based on a 20% pay plan. A tidy income for most and one that should attract a lot of quality people, however it's also one that could create laziness as it's not hard to hit 10 units per month especially in the last three years.

If this is accurate and it is, why is it that we have problems keeping people if the numbers above are the average.

My answer is MANAGEMENT, and please do not misunderstand me as this is an all encompassing word not a person. We fail our people. We are driven by profit not purpose. We try to manage them not lead them. We look to the results as the gospel and preach to them as they were the almighty himself. Raising the question... If this is in fact the case, how can we change this? Simply put it's going to take a fundamental mindset shift.

We need to change how we operate, look to employee engagement and creation of culture. Look to community not just outside the dealership but the one that is needed within. This week, I have seen several posts and comments that struck home as ways to change. Kyle Mountsier and Paul J Daly of ASOTU | More Than Cars launched their series More Than Cars detailing behind the scenes coverage of what makes this an incredible industry to be a part of. It was a fantastic video showing great operators and ways to lead. Kyle furthered this with a post about looking outside the box to find talent specifically Hospitality. Personally I couldn't agree more but we will never attract them in the ways we need by continuing to operate as I stated above. They might come but they will leave shortly thereafter. 

So how do we do it properly? 

We need to take this time to revamp the business. We are coming off of record years only to find a tsunami coming directly at us. Yes, our people were paid handsomely, the turnover dropped to the lowest levels in years (because of income, IMO), and conversions were at an all time high. However as Charles Jones posted the discounts are here and they are large; the race to the bottom has begun. Given the industry is performance/profit based, discounts effect pay plans and the Great Resignation is full swing; how are we going to retain staff?

We have to change and fast... 

This means removing transactional from the equation. No longer are customers, staff or even vehicle just numbers. I am so tired of hearing it's a numbers game when it's not. The industry is a relationship business built on the power of people, products and services. We need to dial in on this. Is your best customer a one and done or repeat purchaser that refers business over and over again? Simple one isn't it... So why treat them as a transaction. Likewise, your best employee is one that has matured with the business providing bonafide value rather than the here today gone tomorrow transitional castaway. It's the dealers who ACTUALLY get this that lead the way. Great relationships are long-term and beneficial to all. 

Where does this leave dealers? As I stated before, we are not training, coaching or leading staff; as such, we are going to continue to spiral downwards unless we enact change. This change is not just for the new hires but for everyone in the dealership including stakeholders. We need to reset. The old adage of "We've always done it this way" is no longer going to cut it as we must start thinking outside the box to attract customers and retain staff.

Recognizing long-term customer value is our goal, we also must bring this to our HR mindset. Most will need a complete revamp of the way we operate, hire, onboard, train, coach and engage our team members. By providing a growth map with milestones to achieve career success we will gain trust and respect but most importantly employee engagement. Once established, accountability can be defined with business plans empowering team members to take hold of their own pathways reducing turnover. With reduction of turnover, the byproducts of improved customers retention, increased GP, CX and volume throughout the dealership are formed; proven by statistics through numerous studies conducted by NADA, Deloitte, Cox and the like. 

Sounds expensive is what most will say but is it when factoring the TRUE cost of a new hire. If we redirect our focus onto building and leading we will lower retention, marketing and recruitment costs guaranteed. Further with this mindset we will create growth opportunities with long-term goals. 

Knowing this... How are you now going to engage that new hire?

Peter Smith heads the Lion Partnership, a collective of Automotive Experts that specialize in improving dealership environments. Please feel free to reach out to Peter or his team at any time and we welcome comments and/or the reposting of any of our articles to your networks.