With the plateau of car sales in 2017 and margin compression in full swing, dealerships need to look internally to identify new ways to save costs and protect their bottom line.
A recent Cox Automotive Dealership Staffing Study found that the average turnover rate at a dealership is 40 percent for employees and 67 percent for salespeople. With every new hire costing a dealership $10,000 on average, the high price of hiring new employees will continue to be a burden for dealerships. That is, unless they get ahead of the problem and focus on employee retention.
How can dealerships work to retain their employees and, in turn, lower their costs and increase their profitability? By being proactive about employee retention.
Dealerships today are seeing changes to how cars are sold, how many are sold and the decreasing margins on each car sold. In order to get ahead of the ever-evolving industry, dealerships need to look at their culture and operations and determine the best ways to keep their best employees.
Dealerships also need to cede control to their employees and empower them to proactively make the right decision for the customer. Therefore, continuous and effective training is vital to keep employees up-to-date on the latest trends, best practices and technologies. Training employees to ensure that they have the skills, tools and knowledge to do their jobs effectively and efficiently will keep them engaged and committed. Similarly, using technologies for reporting and employee goal planning are key to helping employees stay nimble and innovative.
With all this in mind, it’s also important to remember the basics. Taking care of employees’ needs, such as hours, pay plans, staffing, processes, setting metrics and goals and ensuring a work-life balance is essential to retaining happy employees.
Additionally, happy employees start at the recruiting process. Dealerships need to recruit employees who will buy into and fit with their culture. Although having industry knowledge is important for any new employee, that should not be a determining factor. Employees who fit a dealership’s values and goals that are then reflected in the customer experience need to be brought in. If that does not happen, turnover will continue to be high.
If a dealership has employees who are working hard for them and making a difference, they need to fight to keep them before someone else takes them away. Investing in ongoing training and hiring the right people for the right roles will decrease turnover and positively impact the dealership for current employees, potential employees and, most importantly, customers.