Attention to Retention: Current Trends in Fixed Operations – Part II
Years before the current market called for escalated recruitment and retention efforts such as those I mentioned in Part I, we’ve been discussing the cost of turnover in the dealership. When you look at everything start to finish, it can be incredibly expensive. For starters, the investment of money and time spent on running ads on platforms like Indeed.com and other hiring websites, time spent interviewing, background checks, drug screening, and other tests you might conduct, such as personality profiling of applicants for certain positions. Once you've made a hire, there's typically a learning curve. Onboarding, training and common mistakes made during the learning curve all cost the dealership time and money.
What is the True Cost of Hiring and Turnover?
To put it in perspective, the true cost of hiring and turnover can be anywhere from 50-200% of what that person earns on an annual basis. For example, a parts counter employee might earn $60-80K/year. That employee is more likely to make mistakes (mis-order, forgot to order, etc.). Other examples would be technicians damaging a part, not torquing something properly, or other potential errors. Salespeople on the showroom floor might be missing opportunities because they lack situational awareness or training, and are therefore unable to convert a customer. The same thing goes for service advisors and their menu presentations or multi-point inspection reviews.
Onboarding and turnover doesn’t just affect the employee going through the process, it can have a negative impact on the rest of the staff as well. In recent conversations, it seems that at any given time, a lot of stores might be running on 80% of staff because of turnover or other issues (illness, training, family, etc.). That tends to put more pressure on the remaining portion of staff doing 120% of the job, which can cause burnout, more turnover, etc. That doesn’t mean we need to overstaff, but we need to ensure that we have properly staffed to prevent compounding turnover.
It all boils down to the true cost of turnover within a dealership being a lot higher than most people perceive.
What is the Most Important Factor When It Comes to Employee Retention and Satisfaction?
At the end of the day, retaining employees is imperative, and we must remember it’s not all about the paycheck. I spend weeks out of every month in dealerships, staying in tune with techs, advisors, and so on. When I get feedback on their challenges and struggles, a lot of the time something that comes up is the feeling that they’re not making a difference or receiving proper recognition, or do not feel their contributions are significant to the organization.
Often, it comes down to a lack of internal communication. Recognizing people for their efforts and sharing with them the vision and strategy for the business requires involving them in conversations and keeping them engaged. Let them know how you’re progressing together, the successes you’re experiencing as a result of their efforts, and the struggles you’re running into they can help you solve.
One primary reason for frustration isn’t about pay – it’s about inclusion. How do you foster an inclusive environment? For one, regular meetings with engaging information and updates (and not just one-on-ones – though still incredibly important). It’s also important to ask about any personal challenges they’re experiencing. Hopefully you’ve created a space where they feel comfortable enough to express those things without feeling like they’re risking their job or showing weakness.
People want to feel significance. They want to know and feel like they’re making a difference and progressing in their careers. Regardless of what you make, if you don’t enjoy what you do and don’t feel like you’re making a difference, you’re eventually going to look for employment elsewhere.
Another thing to genuinely ask yourself is “Would I want to work here?” Walk through your store and look at a few things:
- What is the current cleanliness of the store?
- Is the equipment up to date?
- How is the lighting throughout the front and back of the store?
- Is it an inviting environment to someone on the outside?
Lastly, education can play a big role in someone’s overall satisfaction. It’s easy to plateau and stagnate within a career path. That’s why we encourage things like cross-training within the dealership, which not only allows others to learn new things or get any needed help but gives them a better perspective on how all the dealership operations integrate. It can also give you bench strength if things change within one of your departments.
You can also look at outside options for training. At NCM Associates, we offer a number of training opportunities across all areas of the business. View our full schedule here. Even internal training can help foster and promote retention in the long-term and provide potential career opportunities for people who work within your organization.