In 2023, better hiring and retention is critical for dealership success

Hiring and retention in the auto industry

The auto industry is facing plenty of challenges, not to mention widespread economic volatility. To survive and thrive, your people are your most important asset. How are you improving your approach to hiring and retention to stay at the top of your game in 2023?

2021 saw record-high earnings and record-low employee turnover. But, “the shift isn’t permanent” advises Automotive News. They predict prices to fall, inventory shortages to ease, and the easy-selling conditions to harden throughout the rest of 2022 and beyond. 

All that to say, perhaps 2023 will be a much tougher year not just for sales, but also for hiring and retention at car dealerships. Even now, 71% of dealerships said hiring challenges negatively affect customer experiences (Hireology). 

Here’s how you can:

  • Stand out to job seekers from all industries
  • Attract more, better applicants
  • Hire tech-savvy, customer-centric talent
  • Elevate customer experiences
  • Improve employee happiness
  • Reduce employee turnover

Respond quickly

Reply to your job applicants within 24-48 hours and cut the red tape to get through hiring in days, not weeks. Just like car buyers, prospective employees want a fast, convenient, and easy experience. Hireology’s survey found that 30% of respondents had lost out on great candidates because they reacted too slowly.

And if you get ghosted—hear nothing back from an applicant—try reaching out in a more direct way, such as calling or texting. 

To make things even smoother, you can complete HR and certain onboarding tasks digitally, before the employee’s first day. 

Provide flexible schedules and work-life balance

Much of the country’s workforce is now used to the flexibility of working from home. But in car sales, working remotely typically doesn’t fit in the job description. Yet flexible scheduling can still give employees the freedom they crave to have healthier work-life balance. 

You may have already adjusted your showroom’s hours or reduced work schedules to a more manageable 40-hour standard. But the ability to dynamically adjust schedules to suit appointments, lifestyles, and family responsibilities takes the concept a step further. 

In addition to flexible schedules, you can compete with other non-automotive employers by offering similar benefits, including:

  • Paid vacation and sick time
  • Paid parental leave (roughly 8 weeks)
  • Paid bereavement leave
  • Low insurance premiums
  • Wellness programs
  • Product discounts

In 2022, 65% of dealers who attracted applicants from higher-paying jobs offered flexible schedules (Hireology). 

Clearly map out 1-2 year career development 

Hireology’s study also explored the impact of educational opportunities. Of dealers who were chosen by applicants over higher-paying offers, 35% provide career development benefits. 

Dealership skills training expert Fleming Ford tells Automotive News that “people want more emotional salary.” they’re asking more forward-looking questions: “Are you going to value me? Are you going to care about me? Are you going to engage me? Are you going to grow me?”

And perhaps most important to the employee and the dealer’s future: “What’s my career path?”

Employees want to know that you actually have a plan for developing their careers. Clearly outline the opportunities they have, including details on job roles and compensation. Chart a realistic path employees can follow.  Give clear milestones to track the journey. Explain exactly what resources, training, and guidance you’ll provide to help them earn promotions. 

Empower more personal fulfillment

With flexible schedules and clear growth opportunities, employees will look next to personal fulfillment. It’s your job to communicate to them the power of their role and how they affect people’s lives in big ways. Salespeople want to feel good about the work they do. Leading with integrity and recognizing exceptional customer service helps reinforce their value. 

Nurturing and empowering employees to build a legacy of human connection and positive impact can make a big difference.The heart in automotive

For more on this topic, check out our blog, The heart in automotive: celebrating human connections and legacies.

Provide digital tools to simplify the job

Are you equipping sales teams with innovative digital tools that make their job easier? Are you leveraging technology to make onboarding faster, richer, and more engaging? The right digital tool also empowers better performance and accelerated growth. 

Del Grande Dealer Group (DGDG), which uses Upstart Auto Retail, reports their lowest-ever employee turnover in 2022. The group’s vice president of team and culture, Andrea Schulz, explains to Automotive News that the company “embraces training and technology.” She’s also careful to point out that “she doesn’t believe the reduction in turnover is because of increased learnings alone.”

This digital retail case study with DGDG makes it clear that Upstart Auto Retail played a hand in both elements—better training and higher earnings. After implementing the tool, the group saw:

  • 75% increase in online lead close rate, from 8% to 14%
  • 69% higher PVR for new cars
  • 44% higher PVR for used cars

Upstart Auto Retail’s own Erin Fallon, who oversees customer success across numerous national dealership groups, also sees major improvements in:

  • Speed and quality of employee onboarding
  • Higher retention rates 
  • Lower employee turnover

“I’ve seen some dealers cut down their onboarding substantially—from 90 days to 60 days, for instance,” she explains. She also calls out key features employees love, such as turn-over requests, custom deal links, easy desking, and flexible software integrations. To learn more about how digital retail makes the job easier for new and existing employees, read Erin’s blog.

Hire from outside the automotive industry

Putting a helpful digital retail tool in place provides structure and guardrails for everyone on the sales team. Regardless of their background, they can quickly learn the tool and accurately run through the transaction workflow. 

One dealership in Los Angeles even published job postings that only stated “customer service” roles, omitting “car sales.” The result? Its top nine salespeople are from non-automotive backgrounds such as hospitality, acting, and insurance. Particularly, former restaurant servers—with their well-honed customer service skills—were found to be exceptional car-buying consultants. 

Restaurant servers make good car salespeople

Other successful non-automotive hires are savvy with digital tools, online communication, and social media. Del Grande Dealer Group models its product specialist job descriptions after those of nearby companies like Apple, Google, Facebook, or even Tesla.  

So consider more than just employment history when vetting recruits. Hire personalities that know how to connect with and satisfy customers. Customer satisfaction and sales team performance can improve while digital retail keeps your workflow running smoothly. 

Lean into salary and hourly pay structures for salespeople

Post-pandemic times have been extra lucrative for dealers and salespeople. But as the economy softens, those high commission checks might start to go back to normal—or worse. What’s more, younger generations and those from non-automotive backgrounds might shy away from the unreliability of commission-based pay structures.  

Whether you ditch commissions in favor of flat pay structures, or simply readjust the balance between base pay and commission earnings, embracing salary and hourly pay can attract a new crowd of talent. It can also help evolve from the traditional sales mentality to a more modern consultant or product specialist role. 

As a starting point, $15+ an hour is becoming an industry standard, but sales team pay will need to be higher, either hourly or with a combination of hourly or salary wage plus commission. This balances stability with the motivation to sell more.  

Promote your employer brand

Marketing and branding isn’t limited to your car-buying audience. Just as important is your brand as an employer. You can create a positive, empowering working environment, but you can’t rely on word-of-mouth alone. Employer branding strategy can use many of the same strategies as consumer brand-building. 

But you can leverage online resources to solidify and advance your employer brand. Sites like Glassdoor allow you to respond to employee reviews. You can empathize with dissatisfied employees and explain how you’ve adjusted your practices to solve the problems they address. You can also amplify positive reviews by engaging with the review and promoting it on other channels. 

Social media is also a successful channel for employer branding. Share your team’s professional achievements to not only boost morale, but show prospective employees how you develop and celebrate your people. You can also share photos from company events to show off your vibrant culture. 

And don’t shy away from sharing your own insights on the industry. Acting as a thought leader will attract talent interested in working for confident automotive experts and innovators.

 

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