The dealership world has become burdened with government regulations affecting every part of the operation. One often overlooked is the human resources department.
Dealerships not large enough for a separate HR department and director typically add that responsibility to an already overloaded controller or office manager.
At what point do you need a separate department or position? There is no clear-cut answer. It depends on your situation. But if you have more than three or four dealerships or a single store with more than 150 employees, then you would benefit from a dedicated HR director.
Either way, the person assigned this responsibility needs to be adequately trained in HR matters.
Too many times, the office manager is burdened with the HR role, but receives no further training. This can lead to disasters.
The following highlights some of the functions handled by an HR department. Think of your dealership and how these functions are currently performed.
- Payroll processing and compliance: This is typically an accounting department responsibility, but should be part of the HR department, if you have one, because of needed compliance with government regulations.
- Benefit administration: Maintaining insurance coverage, communicating issues with employees, and overseeing tax-deferral programs, pension plans and the like need persistent attention.
- COBRA administration: The turnover at a typical dealership results in quite a responsibility for Consolidated Omnibus Budget Reconciliation Act claims. Is your staff trained to handle this?
- 401(k) administration: This can be the most under-managed function at the typical dealership. Rules and regulations are extensive. It can't be handled as an add-on responsibility. Someone needs to take ownership.
- Hiring methods: Does your dealership have hiring policies and procedures? Do you require a job application for every position? Do you have position descriptions readily available? Have you a form that each new applicant must sign authorizing you to do background and reference checks? Do you do those? Is drug testing required of every new employee? If multiple individuals are involved in the hiring process, is everyone fully aware of what can and cannot be asked of job applicants?
- Employee orientation: Who meets with new employees, communicates company policies and introduces them around? If individual departments handle this, how do you guarantee that a consistent message is delivered? Do new hires get written materials detailing benefits, policies and procedures?
- Employee discipline: Before you prematurely terminate an employee, consider the legal ramifications involved in inadequate documentation. Have you provided your employee with a plan for corrective action and a timetable for expected improvements? Have you had a follow-up meeting providing feedback on progress? Is all this documented?
- Harassment policies: Are detailed policies in place and documented? Are employees required to sign off that they know the policies?
- Discrimination policies: Are your anti-discrimination policies clearly outlined? The cost of losing a discrimination case involves time, money adverse publicity and loss of credibility. It is an issue management cannot ignore!
- Employee terminations: Many lawsuits are born of mistakes made in dismissing an employee. Meanwhile, exit interviews are a great opportunity for feedback about your organization.
If you have an HR director, I would suggest he or she report to the chief financial officer or dealer principal.
If your organization is not large enough to support an HR director, then include the HR function in the accounting office under the supervision of the controller. Again, continual training is mandatory to assure compliance.
Remember, no matter what the business, it is all about the people.
John A. Davis is a CPA with Dixon Hughes PLLC. He's at 404-575-8910 and [email protected].