Article

Employee Retention Impacts Owner Retention

August 2006, Auto Dealer Today - WebXclusive

by Don Reed - Also by this author

In my previous article, I wrote about top performers versus underachievers. I hope I ignited a fire in some of you, whom for some inexplicable reason do not tolerate underachievers in your sales operations while at the same time you maintain a safe haven for underachievers in your fixed operations. Let’s explore the reasons why your goal for 2006 is to recruit and train your entire dealership team to become top performers.
In the sales department, they become a top performer by selling to repeat customers (owner retention). They are able to do so because top performers tend to stay at a dealership for a longer period of time (employee retention), thereby giving themselves the opportunity to continue to sell more vehicles to the same customers, as well as their families and friends over a period of years. These employees also maintain an ongoing relationship with their customers in order to insure owner retention. They enjoy working with their customers to provide the highest level of service they possibly can. These are most likely your highest paid sales people, and they have strong roots in your dealership.
 
Conversely, underachievers are performing at below average levels because they are not selling to repeat customers. Chances are they have not worked in your dealership for very long. (turnover) They feel that following up with their customers is too time consuming so they won’t bother to do that either, which simply means their customers—actually your customers—will find a top performer at another competing dealership and take all of their business. Of course the underachievers will complain about the number of “ups” they’re getting and possibly wait for the “grass to get greener” at another dealership, and then they’ll leave.

Now, let’s move to the “backbone” of the dealership-fixed operations. Most dealers have the same scenario I just outlined taking place in their fixed operations. Underachievers, meaning advisors, selling at 1.5 HPRO or less, technicians producing less than 120 percent flat rate hours to clock hours, service managers losing money, parts managers losing money, poor CSI, etc. So what can be done to reverse this cancerous condition called underachievers?

It all begins with the recruiting and hiring process. Spend the money necessary to recruit as many applicants as possible. Complete a thorough screening. Administer a psychological personality profile test. Make sure you have more than one person participate in the interview process. Look for the best of the best and make your choice. If the applicant has not been a top performer in any previous position they’ve held, what makes you believe they are going to start doing so now at your dealership?

Next, evaluate your existing staff by asking yourself one question: “If I were interviewing this person today for the first time, for the position they are currently in, would I hire them?” No “buts” here, just “Yes” or “No.” If the answer is “No,” then start the recruiting process now.

For maximum employee retention, you should not only make sure you hire the right person for the right job but also insure that they are properly trained to proficiently handle the responsibilities of the job. Remember what I wrote last month: “There are only two reasons why any employee is not a top performer: a.) They don’t know how to be one or b.) They don’t want to be one.
If they don’t know how to become a top performer, you can correct that with training. If they don’t want to improve, you must start the recruiting process and get ready for the exit interview.

Once you have the right person, you must make certain they clearly understand, by detailed written job descriptions, what is expected of them on a daily basis. So, if they are properly trained and they know what is expected of them, you must then hold them accountable for their performance both good and bad. This must be done on a regular basis and should be a consistent process.

Correct poor performance NOW! Employees want to feel like they are “in” on things. Let them know their contributions are important to your overall success or failure. You are doing them and yourself a disservice if you are not straightforward and truthful with them. Performance-based pay plans are an essential part of the accountability process and provide incentives for the employees to focus on their individual performance as well as those working with them.

If you really want to make an impact on employee retention in a positive way then you might consider what I call an “Employee Council.” Once a month ask each department to elect one person from that department to attend a council luncheon with the dealer principle. This luncheon should last no more than one and a half hours. No managers are allowed to attend. Each council member must bring an idea for improving any department in the dealership. They can also bring up any concerns they may have regarding any department. The council must provide the solution for any concern presented. The dealer must listen and not dominate the conversation. This is not meant to be a complaint session but a concern resolution session. Believe me you will be amazed at how many good ideas are presented and how well the employees will work together to solve the concern by themselves. Most concerns are caused by “bad processes” not “bad people,” which means it rarely requires any monetary investment from the dealer to follow their solution. Remember, once a month with NO managers. Of course, it would be nice if the dealer picked up the check.

Something exciting is about to happen to your employee retention, which will result in ongoing owner retention.
The biggest room in the world is the room for improvement.

Vol 2, Issue 12

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