Taking On Employee Turnover

I have facilitated hundreds of dealer and manager meetings during the past 20 years, and one subject has been included in all of those sessions: sales personnel. Sure, we may discuss sales productivity, attracting new talent, training, turnover, motivation and the like. But seldom does the discussion get much more in-depth. When I began writing a monthly article for this publication, I made a promise

I have facilitated hundreds of dealer and manager meetings during the past 20 years, and one subject has been included in all of those sessions: sales personnel.

Sure, we may discuss sales productivity, attracting new talent, training, turnover, motivation and the like. But seldom does the discussion get much more in-depth.

When I began writing a monthly article for this publication, I made a promise to myself that I would not focus on selling cars and trucks. Since you are the experts, there is probably little, if any value I can provide in this area. So, I'm going to keep my long-standing promise and not offer any advice on selling vehicles.

I began my career as a salesman and have often commented on what a great job it was. There was no formal sales training at the dealership but fortunately a very successful 70-year-old physically handicapped salesperson, who worked strictly on referrals and appointments, took me “under his wing” and taught me the business.

Daily, we had lunch at his desk where he would patiently answer my “dumb” questions and teach me the basics. Each day, we would begin by discussing my previous day's activities and results.

He was tough, demanding and had no time for any excuses I might try to introduce for anything.

I can honestly say, 42 years later, I owe my considerable success in this great industry to that gentleman who, for whatever reason, generously took the time to mentor me.

I often wonder if I were to fast-forward from 1968 up to today, would I enjoy that same success. What, if anything, is different today considering all of the available technology and resources?

In our meetings, when we discuss attracting qualified candidates for sales positions, the discussion quickly touches on the subject of employee turnover.

Unfortunately, as noted, we discuss the symptoms and rarely do the discussions progress to the real question:

Why are dealership turnover rates so high?

Is it our hiring process, a lack of training, our sales management team's possible lack of discipline and consistency? Isn't it amazing how excited we are when we hire a new sales person and, quite often, how soon our enthusiasm for that same person is quelled.

Considering the high unemployment rate nationally, I personally see today's unemployment situation as an opportunity for the retail automotive industry to attract persons to this business who might have never considered it.

I think we would all agree that it takes about two years for sales people to get firmly established in this business. A period of about two years is necessary before they can realistically expect their production and income to be at an acceptable level.

So, for dealer operators, the question becomes:

“What can I do to get a new hire through the first two years”?

We all know the high cost associated with turnover and it's not only a salary and wage item.

In a recent trade publication article entitled “Life at 11 million U.S. sales” there is a statement which suggests a degree of hope for those sales personnel struggling to stay in this business and for new hires to be drawn to it.

“The combination of lower sales and shrinking margins has led dealers to experiment with new ways of paying salespeople,” said the article.

Pay options I'm hearing discussed as possibilities range from a competitive hourly wage plus incentives and a 40-hour work week, to a representative salary plus commission and performance bonuses to a salary and a flat commission for each vehicle retailed.

I don't know how or when this salesperson turnover issue will be resolved, but I am excited to now see dealers taking actions which will result in a better industry for all of us.

Good selling!

Tony Noland is a veteran auto dealership consultant. He can be reached at [email protected] associates.com.

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