According to the latest NADA Dealership Workforce Study, the average dealership has a 72% turnover rate in variable operations. And if you’re having trouble with turnover, that means you’ve got issues with the way you hire.
Without some form of process for your hiring, you increase your chances of making poor decisions that can turn your dealership upside down.
To help avoid turnover, here are five mistakes dealerships make while hiring, as well as some tips on how to resolve them.
#1 Wasting Time & Money
Most dealerships rely on paper applications, on-location interviews only and don’t conduct background checks or candidate screening. When a hiring manager lacks the resources to conduct a proper hiring process, he or she has a tendency to make rushed or uninformed decisions, resulting with bad hires and employee turnover (which is pricey, like $12,000 pricey, on average).
Hiring shouldn’t waste anyone’s time or money. Get away from paper applications and utilize a hiring process that allows you to access candidate information and conduct all types of interviews under one platform, accessible through your computer or mobile device. Hiring technology can save your dealership time and money, as well as help you figure out who is best fit to work at your location so you can reduce your chances of bad hires.
#2 Inconsistent Process
Hiring is a challenge across different locations or when multiple people are involved in hiring employees. When everyone’s not on the same page, it can cause frustration and bad decisions. And naturally, this all adds up and leads to wrong hires and yes—more turnover at your dealership.
Regardless of how many dealership rooftops you run, there is a way to work in unison with all of your hiring managers. Make sure you’re using a hiring platform that works across all of your dealership locations and allows you and your hiring managers to access all candidate information and collaborate. This lets everyone to track and take notes on all of the people in your candidate pool, which also gives your hiring process much more consistency.
#3 Too Few Strong Candidates
If your application process isn’t user friendly, candidates won’t even bother completing the form. If you’re not posting your job descriptions in the right places and not writing job descriptions that best represent your open jobs and dealership brad, how can you expect great candidates to be interested in your jobs?
Studies have shown that job seekers prefer a shorter application process. This is especially true for the most talented ones. If they’re not already being recruited, the last thing they want to do is fill-out a long and tedious application and have to re-create your resume. And it’s crucial to post job descriptions that attracts the applicant’s eye with the right keywords, titles, requirements, and responsibilities. Posting jobs is really a marketing exercise. Get them excited about the opportunities you have to offer.
#4 Poor Hiring Decisions
According to a recent BBC article titled, “Science of Hiring Smart,” the author stresses the importance of a strong process to evaluating job candidates, saying that: “Managers responsible for bringing in new personnel can’t rely on a recruit’s resume and past history. Instead, it comes down to an often–difficult–to–gauge combination of motivation, skill set and personality.”
The author continues, saying: “For many companies nowadays, hiring is seen more as a science than an art, relying heavily on personality tests and day–in–the–life tryouts. But any manager who’s recruited regularly knows that, even with those tricks, hiring remains perhaps the business world’s biggest gamble. Successful hiring relies on both science and intangible qualities.”
Dealerships that lack a structured, scientific hiring process risk making poor hiring decisions, such as making a rushed hiring decision because of pressure, foregoing background and skills verification or hiring a candidate because of a “gut feeling” just to name a few.
Having structure for your hiring process is essential to making good hiring decisions and lowering turnover. An easy way to help you avoid poor hiring decisions and make sure you’re selecting the right people for your dealership is by using a hiring process that helps you identify candidate behaviors, work styles and personalities. It’s also crucial to make sure you’re using hard skills tests to help you identify candidate strengths and areas of developmental needs. This way, you can lower your chances of making poor hiring decisions.
#5 Inadequate Training for New Employees
There may be numerous reasons why your employees are leaving your dealership, but if they’re continuously disengaged with the job during the first few weeks of employment, then you’re at fault. According to a recent article from Automotive Management Online, “The first 90 days is critical to reducing sales staff turnover” and “that the average franchise dealership loses nearly a third of its sales staff every year.”
The first 90 days is supposed to be the onboarding period at your dealership for your new employees. It’s on you to make sure you’re making your best effort to educate, build the right skill sets and develop your new hires. Otherwise, you can count on—that’s right—even more turnover.
If you’re experiencing turnover in top performers, you might want to re-evaluate your training and career advancement opportunities. Most turnover occurs in low performing or new employees, so when a salesperson leaves a position in which they are successful, it’s likely because they feel undervalued. Don’t assume that your top performers are just as satisfied as you areoffer incentives, bonuses, and room for promotion to maintain a high level of motivation. In the end, this will be beneficial on multiple levels as you see an all-around increase in motivation and competitive desire.
Compensation matters also. Great salespeople rarely leave a job that they’re succeeding in—unless they are lured away by something better. If you want to attract, and subsequently retain, high-quality sales personnel, you may need to up the ante. Creating a positive work environment can help if your company simply can’t afford to increase compensation, but it’s hard to argue the fact that better candidates expect better pay.
When It’s All Said and Done…
Don’t write-off turnover as an unsolvable problem. The key to fixing this issue is by having structured hiring process that gives you, your hiring managers and dealership the framework to bring aboard people who’ll stick around and build your business.
Give your dealership a competitive advantage by utilizing a modern hiring process before your competitors do; you’ll be glad you did.
As VP of Business Development at Hireology, Kevin’s focus is to help their retail automotive clients to improve the people side of the dealership. Kevin was employee #3 at Hireology and has spent his entire 15-year career in sales and sales management for entrepreneurial and start-up companies. He has interviewed thousands of people and is passionate helping organizations build great teams. He volunteers countless hours mentoring and coaching entrepreneurs on hiring strategies. Kevin resides in Milwaukee with his wife and daughter. Outside of Hireology you can find him in an airport near you, on a Harley, or surfing on Lake Michigan. Kevin’s first car was a 1984 Dodge Aires.