Why Would I Work For You – Part 1

This is Part 1 in a two-part article.

Throughout each year I am in numerous dealerships, and the one topic that always comes up is the shortage of qualified job candidates. This shortage encompasses every position in every department to include technicians, service consultants, parts employees and warranty administrators.

Let’s think about this for a few minutes; we are discussing an industry that 20 to 25 years ago had an abundance of candidates to choose from. What has changed?

Perhaps the biggest reason there is a shortage of skilled trade workers is that high schools, counselors and parents have for many years put an emphasis on pushing young people to obtain a college degree as opposed to training at a technical school. Additionally, many young people are attracted to white collar jobs because they allow them to work comfortably in a climate-controlled office year-round and avoid physically demanding labor in potentially tough environments. Hands-on jobs are generally stigmatized and many feel that only “low-class” people without other job options work in technical fields, but this is far from the case. White collar jobs are no longer by default the best paying jobs with the most opportunities. There are more qualified graduates for these jobs than there are job openings, creating the current situation where we have too many overeducated and underemployed college graduates.

As an industry, we must change the attitude that our team members are just an expense on the financial statement. They are our greatest asset! What would customer satisfaction, productivity and profitability look like if as an industry we spent as much time attracting, recruiting and training existing and new team members as we do recruiting new customers? Your dealership is only as successful as your team, something to consider!!!

Entrepreneur Richard Branson, who is celebrated for running incredibly successful companies built around happy workforces, writes, “Your team members are your dealership’s real competitive advantage. They’re the ones making the magic happen – so long as their needs are being met.”

A radical concept I always recommend is to treat your team members as well as you do your best customers and your dealership will reap rewards beyond your wildest imagination. Take care of your team members, they will take care of your customers, and the rest will take care of itself.

Take a few moments to discuss some things that have led to this shortage and what initiatives can be used to help retain our current team members while attracting new candidates.

The first thing to examine is why we are losing employees at an alarming rate:

  1. Lack of opportunity
  2. Bad Management
  3. Toxic workplace and company culture
  4. They feel unappreciated
  5. They feel as if they have no value to the company
  6. Long work hours
  7. Lack of compensation
  8. Lack of rewards and benefits
  9. Inconsistent earning potential
  10. Lack of retirement options
  11. Lackluster Benefits
  12. Increase equipment/tool demands

Turnover is costly. It costs nearly three times an employee’s salary to replace someone, which includes recruitment, severance, lost productivity and lost opportunities.

Over 50 % of people recruited into a dealership will leave within 2 years.

  • One in four of new hires will leave within 6 months.
  • Nearly 70% of dealerships report that staff turnover has a negative financial impact due to the cost of recruiting, hiring and training a replacement employee and the overtime work of current employees that is required until the organization can fill the vacant position.
  • Nearly 70 % of organizations report having difficulties in replacing staff.
  • Approximately 50% of organizations experience regular problems with employee retention.

Statistics show us that it is important to develop a retention plan to retain employees and keep turnover as low as possible.

Understanding your store’s performance is critical. An evaluation of your store’s percentage of staff turnover is a task that must be continuously performed. A 10.0% turnover ratio is considered a normal “healthy” business percentage. If your turnover ratio is higher, there should be an audit of each employee exit to help identify the reasons and look for trends. There will always be some employee turnover, but as owners and managers we really need to know how much it costs the business when an employee is lost.

Studies predict that every time a business replaces a salaried employee it costs 6 to 9 months of salary on average.

Continued in Part 2!

Written by Kemp Evans

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