Hiring, Training, and Retention, OH MY!
Staffing changes … we’ve all been there. A manager gets a promotion, or someone just isn’t cutting it and “gets the axe.” Or an excellent employee who’s worked in the business longer than anyone can remember decides it’s time to retire. While most situations allow time for those exiting to train their replacements, it’s nearly impossible to pass on years of knowledge and experience in just a few short weeks.
Where does that leave you and your business? Are you confident in the training structures you have in place? The way in which you and your management team oversee the transition of staff members dictates whether the change will have a negative or positive outcome. It also dictates whether you retain that employee or find yourself in a turnover spiral.
The Story of Joe and Sally
One of my clients, we’ll call him Joe, underwent a tough staffing change. Joe's dealership employed a controller who had worked for the business as long as Joe. This controller, we’ll call her Sally, knew the dealership's books better than anyone. If Joe asked an accounting question, Sally was immediately there with the answer. But it was time for Sally to retire. She gave Joe ample notice of her retirement and he began the process of finding and training her replacement.
Still, after several months of training and working with a new hire, it was clear this new individual was having a difficult time keeping up with Sally’s workload. As an NCM client services and meeting coordinator, I called about a missing financial statement one month, and Joe expressed his frustrations. He felt they’d made a good hire and that this new controller was doing the best she could, but she just didn’t have the experience he had grown accustomed to with Sally in command.
I informed Joe of the training courses NCM offers through our Institute that may prove beneficial to him and his new controller, specifically, our Financial Management I & II courses. Many of our clients are familiar with the NCM Institute and are aware that NCM offers a wide variety of classes for dealership managers, employees, and owners to brush up on their most important skills. The testimonials on the website speak for themselves. The courses I recommended to Joe walk students through the steps to structure a financial statement, discuss the basics of dealership balance sheets and accounting schedules, and help students understand the “big picture” of financial ratios. He was grateful for the suggestion and signed up for both courses! It was a game changer for his new controller. She returned from training with a better understanding of the role she played at their dealership and was better equipped to handle the demands of the position.
The dilemma Joe found himself in is one dealerships often face; not just finding the right person for the job, but providing adequate, up-to-date training. Turnover has long been a problem for many dealerships in the automotive industry. According to the 2016 annual National Automobile Dealers Association Dealership Workforce Study, turnover is costing the average dealership half a million dollars per year. That’s an expense that is directly taking away from your overall profit. A mere 10% increase in turnover could equal up to $7,500 in lost gross profit per employee, per year. With national turnover as high as 67% for automotive sales consultants, costs start to pile up fast. Investing in the growth and training of the right people has the potential to save your dealership a lot of money. So … are you investing in your team?
You might be thinking, “I already spend $XX on salaries and commissions and now I have to spend more?!” Instead, take a moment to explore a different train of thought. You are allocating $XX to payroll and gaining $XX in profits. If you rework those numbers just a bit and invest an additional $3,000 to train your team, you could reap 10 times that amount in profit! Develop a measuring structure to track performance that works for you and your employees, and then regularly review how they measure up. We often fall into the excuse pattern of: “Oh, they’re new … they’ll get it eventually … they’ll catch on …” and demand significantly less from new hires than we did from their predecessors. Instead, build them up, track their performance, and expect that they’ll achieve more.
Good Ideas are Contagious
At a recent 20 Group meeting, I had the pleasure of attending, one of the members expressed that a staffing change was the reason for his dip in F&I profits. He was asking for ideas to bring his newest hire up to speed. Come to find out, some of his fellow members were experiencing the same problem! Luckily, his 20 Group peers, and NCM, were there to help.
While many of our clients are familiar with the NCM Institute, not many know that NCM also offers private training for 20 Groups, often at a significantly discounted rate for members. You and your fellow 20 Group members just select a time and place, and we send the Institute instructor to you. It creates a unique experience where professionals can learn together and collaborate with their peers in like situations.
These courses are not exclusive to those experiencing staffing changes. Private 20 Group training can provide an excellent avenue for veteran employees to acquire new ideas, inspire different practices, and generate ownership of their performance. This opportunity promotes a plan of action to make necessary changes to move your business forward. Change is frequently met with reluctance, but our courses help managers and employees get excited about change. When you see your potential for growth, the ideas to get there start to become contagious.
I encourage you to review the hiring, onboarding, and developmental training processes at your dealership. Take a moment to map out the implications of your current turnover rate, then make goals for where you’d like to measure in three months, six months, and a year. Use current employee reviews as a springboard for if, and where, change needs to occur. Have a plan established, so you don’t find yourself working from a place of desperation. Staffing changes don’t have to be scary!