The Greatest Inefficiency of the Car Business – Compressed: Episode 6

The Greatest Inefficiency of the Car Business – Compressed: Episode 6


Dale comes out swinging in this chapter as
he calls dealers’ human capital management strategy “The Greatest Investment Inefficiency
of the Car Business Today”. And the data backs him up. Citing 2015 NADA reports, turnover for sales
associates is 71% and service advisors came in at 41%. To Dale, this borderlines being an industry
embarrassment and is the single biggest issue facing dealers who are operating in a market
with increasingly compressed margins. With the average dealer payroll at $3.5 million,
most dealers agree that it’s their single greatest operating expense and an even greater
burden on cashflow. When was the last time you could push your
payroll expense by a week? NADA offers a possible answer for the turnover,
but Dale quickly dispatches it saying the real answer suggests several things: The need
for increased attention an accountability to the manager who made the hire, the systems
of on-boarding, and the clarity of the career advancement track. Revisiting his own personal hiring experiences
as a dealer, Dale recounts situations where he ignored hiring best practices. He hired charmers who turned out to be chumps
and accepted the extremely high turnover as the nature of the car business. 20+ years later, Dale recognizes and laments
the opportunity to have been a better boss AND a better businessman if he had only paid
attention to human capital management. Because of this, Dale is committed to sounding
the alarm to help dealers more toward a tighter process which creates a desirable culture
of advancement for employees who will in turn provide a better experience for customers
and a great ROI for everyone. Acknowledging that dealers have typically
considered this the “soft-stuff” of running a dealership, Dale says that investing in
the discipline of sound hiring practices, company culture, and career advancement generate
the fullest possible return on their dealership fullest possible return on their dealership investments. Culture matters! I see the evidences within our company and
within the many others we help through our creative agency, Congruent Story as we produce
creative content and branding material that help communicate value, hire better, and bring
value to employees. It’s a greater ROI all around. Dale turns to Adam Robinson, founder and CEO
of Hireology, the forefront hiring platform for dealers, for some clear direction. Mr. Robinson says that self-assessment is
a critical first step for every dealer to make progress in hiring, retention, and employee
satisfaction. He goes on to say that hiring process is no
different than pricing used vehicles. Specific methodology and process increase
your chances of being better off. Dale concludes by highlighting the fact that
nearly every dealer represented by Automotive News “Best Dealerships To Work For” event
pointed to defined career paths and related training opportunities as critical to their
success. These opportunities are especially welcome
amongst millennial employees. The closing question is how soon can you turn
your dealership into a truly “people-first” organization? What will the consequences be in terms of
missed opportunity, ongoing headaches, and less-than-optimal performance the longer it
takes to get there? What is YOUR answer?

About the Author: Michael Flood

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