High Turnover: A Direct Result of a Poor Hiring and Onboarding Processes

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When it comes to building high-performing teams, today’s automotive dealerships face a consistent uphill battle. According to this year’s National Automobile Dealers Association (NADA) Workforce Study: 27 percent of all terminations (all job titles) happened within the first 90 days of employment. For sales consultants, 39 percent of terminations happened within the first 90 days. NADA also found that fewer than half of a dealership’s employees – 45 percent – stay with the dealership for more than three years, significantly less than the 67 percent retention rate seen in the U.S. non-farm private sector average.

The increase in early turnover and decrease in employee longevity have a rippling effect across the dealership community: the ever-decreasing amount of tenured employees results in reduced productivity and decreased dealership profitability.

High turnover rates, especially within the first 90 days, is without a doubt a direct reflection of your hiring and onboarding processes. Perhaps it’s time to reevaluate? Let’s examine what key elements can help reduce early turnover and increase employee retention.

Fine Tune Your Hiring Process

In order to build a better team, you need a solid hiring process. One with clearly defined roles and measurements designed to bring the right people to your table. Sure, it’s a little work upfront – but we’re talking about the future of your dealership – hiring the wrong people time and time again can significantly hurt the bottom line. A structured hiring process should include the following steps:

  • Define – Clearly define the position to be filled.
  • Source – Market and promote your open position and receive applicants.
  • Select – Evaluate candidates for the position and company culture.
  • Verify – Follow-up with ideal candidates to confirm the skills and information they’ve represented.

Starting with the job description, clarity early in the hiring process will narrow the field of applicants and improve candidate quality. From there, candidates should be interviewed carefully to ensure they have the right skills and will fit with the company culture, managers and co-workers. Lastly, don’t just contact references; go a step further and have the applicants complete a skill or personality test to make sure they’re a good fit.

Strengthen Your Onboarding Process

A great onboarding program is designed to educate and engage your employees so they can become productive members of your organization quickly and effectively. The more comfortable they feel, the more inclined they will be to stay employed at your dealership.

Beyond reviewing the employee handbook and clarifying the new hire’s job role and expectations, the onboarding process should engage employees early on and keep them interested in staying for the long-haul. Engagement builds company culture and rapport among new staff, in addition to directly driving your dealership’s growth. According to a study done by Gallup, employees who reported themselves as “highly engaged with their company” had 147 percent higher earnings per share than those who were “not engaged.”

Here are some key tactics to engage employees early on:

  • Encourage Open Communication – New employees may often feel scared or intimidated to share concerns or feedback about their new role and surroundings. According to a study done by the University of Missouri Business Development Program, two of the top ten reasons why employees quit their jobs were attributed to inadequate training and poor communication. Newer employees may not feel comfortable asking questions or expressing their opinions, and that could negatively impact their work as well as motivation to stay on board. Provide a communications structure to help them get answers to questions about their new workplace, without the unneeded pressure. Encouraging them to feel comfortable and honest can do wonders in creating a space where they feel secure and part of a team.
  • Build Strong Connections at All Levels – With an average employee count at automotive rooftops of 70 employees, it’s easy for new hires to lose track of who their key points of contact will be once they get settled into their role. Develop processes that help new employees foster interpersonal relationships with their superiors and understand what role their co-workers play in your dealership. This effort will help keep lines of communication open and create a stronger sense of community.
  • Assimilate Your Employees – Many times, the only way new hires learn about the culture or the subtle nuances of a dealership is after they have done something they shouldn’t have. This “trial by fire” approach is not conducive to helping create an employee that wants to stay with your organization and grow. Being unable to assimilate isn’t only frustrating for new hires; poorly assimilated employees can create a great deal of conflict within your organization and have a severe impact on the overall team morale. A defined approach to onboarding can serve to assimilate new staff members and provide them with clarity regarding their roles, responsibilities and team goals. This will help a new team member effectively work with other departments in your dealership to help them all reach the same page and best work together.
  • Offer Opportunities for Future Growth – Even at the beginning of an employee’s tenure at your dealership, he or she wants to know there is room to grow. Their career path should be clearly mapped out, with skillsets or requirements needed to be promoted to the next level. There should also be a clear review timeline in place. The more systemized your processes for promotions are, the better the response will be from staff.

Research proves that employees are not engaged in their positions. A fine-tuned hiring process and solid onboarding program can help your dealership properly facilitate early success and help to retain talent.