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The Great Turnover Challenge: Investing in People for the Long Term

Successful dealerships should share a commitment to fine-tune hiring practices, cultivate talent that already exists internally and prioritize learning.

It’s no secret in our industry that finding skilled staff today – and keeping them – is a challenge.

Nationally, 73% of automotive salespeople stay in their role for less than two years. Why?  For many, a dealership job is seen as a short-term opportunity; yet, a job at an auto dealership historically, and today, is one of the great employment opportunities that offers a level playing field, culturally and economically, where work ethic is as important as high-flying credentials. – At many dealerships, you can start by washing cars and rise to a sales or management position with a six-figure salary.

I started at my company 17 years ago as a manager. While I dreamed big, I never imagined becoming president. But what I was empowered to imagine was the diversification and development of my skill set, because my company – which had its own road upwards from a two-employee lot to one of the top automotive groups in the country – was committed to investing in its human capital.

In today’s immediate-gratification world, I worry that many dealerships are reluctant to invest in their people because results are demanded now. On the other hand, I have seen dealerships that are tuned in and focused on the human side of things struggle to achieve high performance. Finding the balance – the sweet spot where personal development and business success meet – is key and should be a shared commitment to fine-tune hiring practices, cultivate talent that already exists internally and prioritize learning.

Here are five proven tips (and one key acronym) that have been successful at my company for decreasing turnover and investing in employees for long-term success.

  • You never get a second chance to make a first impression: On your first potential employee interaction, be clear about what your company expects and the benefits it offers. Take the time to get to know the applicant. Have a clear set of parameters outlined that will help you clarify what a “great fit” for your team means. Ask the right questions and add your instincts to that equation. But also be sure to encourage the prospect to ask questions about your culture, values and priorities, so he/she can evaluate if they can commit for the long term. No matter how perfect that person might appear to be, if what you are offering does not fit their plan it will end as a mismatch. And remember, don’t rush the process take your time to fill a position.
  • Be a ‘Strengths with Opportunities’ Matchmaker. You have hired your team, and the next step is keeping them. To do that, identify each employee’s strengths and match them to opportunities. Make the discussion of talent and potential part of your leadership team’s monthly meeting agenda. A system we have found to be successful is ‘PEDAL’ – a scoring system for each team member in five competency areas.
      • P: Professionalism, Presence and People Skills. How does the employee interact with and treat customers, supervisors, vendors, OEMs and fellow employees? Do they exhibit humility? A positive attitude? Do they listen as much as they talk?
      • E: Expertise. Encourage your staff to be experts in their field. Identify those who will take the time to educate themselves about the products, processes, systems and people who influence their jobs. These are your future leaders.
      • D: Delegation and Development. Leaders look for opportunity and raise their hands to take on bigger roles. They set audacious goals, enthusiastically accept stretch assignments and demonstrate that the best way to learn is by doing. They also support others who are doing the same.
      • A: Accountability. There is no better professor than failure. Value those who learn from mistakes, and who can give and receive feedback professionally and have the difficult conversations necessary for personal development. Listening, collaborating to find solutions and balancing bravery with compassion are important characteristics to develop in employees.
      • L: Leadership. Have a clear mission and vision, one that your team can engage in with passion and enthusiasm, and around which you can develop a group of high performers.
  • Invest in your people.  Focus on promoting and developing from within, using tools such as PEDAL. This positions you to reduce turnover, unify your team around a long-term and sustainable mission and, ultimately, increase performance.
  • Eliminate the politics. Promotions should always be based on skill and performance, never as favors, or on factors such as race or religion, etc. Commit to a level playing field with opportunities for employees to fine-tune their skills. Car salespeople can have a turnover rate between 30%-100% it is impossible to excel when you are always starting over, which is why promoting stability and fostering a learning environment is so important.
  • Prioritize recognition. From noticing and complimenting a job well done, to rewards of additional time off and pay increases, find ways to show your appreciation for hard work and dedication, and include public acknowledgment. Recognition boosts morale and improves motivation for everyone.

Juan Alarcon of Car Pros.jpgShifting focus to developing long-term employees takes effort, discipline and commitment. But, as we have learned at my company, the results can be priceless, both in the personal fulfillment we get from seeing employees grow and excel to the business rewards of becoming a national sales leader. Employment at a car dealership opens the possibility of a permanent and rewarding career for anyone in any position. With the right tools, training and a deep investment in the wheels that literally keep your profit engine turning – your people – your dealership can increase retention and get you off the hamster wheel of constant turnover. 

Juan Alarcon (pictured, above left) is president of Car Pros, an automotive group with nine dealerships in Washington and Southern California representing Kia, Hyundai, Honda, BMW and Mini.

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