Every dealership needs to focus on employee satisfaction and support, as a means to reduce costly turnover and increase productivity. The revolving door for sales personnel must stop. This revolving door costs dealerships across the nation millions and millions of dollars annually. Studies show, the actual cost of replacing an employee is at least one year’s salary for that same employee. This cost is derived from decreased production when the employee decides that the current place of employment is not desirable any longer. Costs are also incurred when the employee discusses their dissatisfaction with other employees, thereby poisoning the well and affecting the whole team’s productivity.

Why do we have such high turnover in our industry? That’s the million dollar question. Research, analyzed through exit interviews across the nation, reveals glaring reasons why employees become dissatisfied and leave. Our people want to be trained and have an opportunity to grow with the company. They need to have a belief in the company they are working for; see the vision of the future and buy into that vision. They want a pay plan that doesn’t change. These people want to be contributing members of a team that has a social network to satisfy their needs. They crave a solid relationship between a manager/supervisor and the employees. The list goes on, but the point is, management has a huge role in determining the morale and retention of employees.

We have all seen new hires, trained with the “see” training method (i.e. see the desk, see the phone, see the inventory and see you later). This sort of training does not work for today’s professional, who expects thorough, useful training. We need to take the time to introduce them to each member of our team; including every department in the introduction. New hires must be taught proper processes and procedures.

Utilize a structured orientation that drives home confirmation of the employee’s decision to join the company. Make the new hire feel welcome and part of the team, by explaining the organizational structure and goals of the company. First impressions, for the new employee, are critical. Hold training sessions daily, keeping this fact in mind: For every dollar we invest in training a key employee, we will receive over $30 in extra profit.

Our hours are too long and our industry is too tough to rely on untrained, frustrated personnel. Let’s put together some winning packages; recruiting and retaining people who are the “real deal”. How? Here are some ideas to start with:

Create a winning pay plan. Pay plans need to compensate the employee for work done. Managers motivate and pay plans compensate. Keep motivational pay in bonus structures that match goals and training. Think the pay plan through, and plan for employees reaching levels of 25-to-30 or more units per month. Pay plans can’t change just because the sales people are making more money than management. Write the structure of the pay plan up, and don’t change it. The point can’t be emphasized enough, to have a well thought-out structure. Nothing will demoralize an employee faster than changing their pay plan.

Have a careful selection process. Sometimes the best employee hire is the hire we didn’t make. Screen your new people very carefully. Ask a lot of open-ended questions during the interview process. Remember, the person asking the questions is in control of the conversation. Get the prospect to open up, so you can learn more about them. Ask off-the-wall questions, such as, “What have you done to improve yourself in the last three-months?” Prospective employees will have a hard time “winging” this type of question, allowing you to see the real person. Motivating people to reach your goals starts with the interview process.

Offer world-class orientation for new hires. Orientation is a powerful strategy to build commitment in new people. Our new people will perform at a higher level when they are committed. Assign a “go to person” for new hires. This person should be someone the new employee can ask any question without fear of looking incompetent. Have daily trainings for all sales professionals. Training should instill confidence in our sales people. Make the training sessions fun, have contests and interact with your people. When you are actively training and working with your people, this shows them that you care for them. This improves their satisfaction on the job. Training fosters higher and higher levels of achievement. In sales, this translates into more and more customer-focused interactions—resulting in more sales and profits.

You have to offer a better overall package than the competition, to get the best people. If you don’t offer the best, you will end up with outrageous turnover, lost dollars and lower overall profit. The best personnel demand clearly-defined goals and objectives, opportunities for growth, status, social networking, respect, responsibility, training and a steadfast pay plan. Professional sales people don’t want to change jobs every few months. They crave a work environment where they can assume mental ownership. Studies show, the number one reason salespeople quit is management. Management needs to be involved as a leader/coach, not a cop/disciplinarian. Be involved with your people, and take ownership.

Establish reasons why people are staying or leaving. Ignorance is not bliss. When we have good employee morale, we have good customer morale. They go together like a hand and a glove.

There is no silver bullet or magic wand to create a winning atmosphere in our dealerships. No single pay plan can capture all the components we seek to succeed. Your job is to make every employee feel that they are a valued part of your dealership, committed to a worthy goal. When this commitment mixes with the confidence that training brings, you will have a winner on your hands.

Special Finance Insider Vol. 1, Issue 4
About the author
Kevin Day

Kevin Day

Contributing Author

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