|The word "recession" has become such a dirty word in our country today that as a benefit to my readers, I will be following the example of noted economist Alfred Kahn when the Carter Administration told him to stop using "recession" or "depression" when talking with the press. Therefore, from here on in this article, I will be substituting the word "banana" for "recession.”|
|As our economy moves more and more towards a significant banana, I think it is safe to say that we in the retail automotive industry will notice the effects. I think it’s also safe to say that those of us who have been around a while realize that the economy cycles through one of these bananas every 15 to 20 years or so with a couple worse years, followed by many years of growth. We had bananas in the ‘90s and the ‘70s, and though the ‘50s seemed to have had a banana-free pass, the ‘30s were well beyond anything else. The point I am making here is that as bad as the banana can be, the fact is that it'll slip by before you know it and you'll start seeing growth again. How we need to look at the banana is not as a problem, but rather as an opportunity to prepare for the future.
More specifically, we need to remember that during a banana people will be looking for new jobs. We can use this to our advantage by taking a long-term focus on our hiring and preparing for the upswing in the economy that always comes at the end of a banana. In times where a banana is imminent or already apparent, there is never a better opportunity to hire good sales people.
To take advantage of the banana, you must first learn to shift your mindset about employees and their compensation and benefits. I have seen all too often that employers, including automotive dealerships, consider employee compensation and benefits as nothing more than costs that need to be contained, like copy paper usage or electricity. I've never viewed employees this way. To me, employees have always been assets, and their compensation and benefits are investments more than anything else. Employees are the ones who create the business and this is no more apparent than in automotive sales. A good salesperson will create far more revenue than they will create costs.
During a banana, people may be laid off or fired and are certainly going to worry about their future. These will be people who are good employees with great skill sets and good work histories. These people will be seeking work opportunities where they feel they have control over their future, and there is no better opportunity than in commissioned sales. I have always viewed commissioned sales as the perfect type of work for people who want to control their lives, because simply put, the harder you work, the more money you’ll make. If you are a good sales consultant, there is practically no limit to your earning potential. So if a banana is going to prompt these workers to seek new opportunities and we want to hire them, how do we go about getting them? There are a couple things we need to do.
First, make sure to keep up on the news about your local economy. Rarely will a significant lay-off or business closing happen without some coverage in the local news. Or alternatively, you can keep in touch with local business organizations such as the Chamber of Commerce (CoC) who will have a good handle on the local situation. By staying aware of the changes in your area, you can be the first on the scene when qualified employees become available.
I used this exact method to pick up a few good employees a couple of years ago for a dealership I worked with. A couple counties over from us there was a bit of a localized banana due to the closing of several manufacturing plants. As a bit of a domino effect, a large automotive dealership in that area was preparing to close. I got wind of this through the CoC and made my way over to talk to the dealer principal. He obviously was not looking forward to having to lay off all of his employees, especially the ones who had been good workers for years.
He was more than willing to let me talk to his people and recruit them to my dealership when his dealership closed. We picked up two good sales consultants and a service technician for nothing more than the time it took to read a newsletter and make a visit. This same technique would apply to any business, not just automotive dealerships. Almost all businesses will have some kind of sales staff, and considering that many sales skills are easily transferable, it will be worth your time to look into recruiting these people.
The second thing that you should remember about recruiting people during a banana is that you need to keep your standards high. When there are a lot of candidates for the available jobs, it is easy to find yourself in a mindset of, “If this person doesn’t work out, there’s always someone else.” This is very short-term thinking and we are trying to use the current situation to make long-term hiring decisions. We want solid employees who will last and succeed.
If we invest the time and resources in training them during this banana, we want them to be around to excel when the growth returns. Take the time to define what you are looking for in an employee by developing a clear and concise job description. Then, proceed through your hiring process with interviews, work history reviews, references and pre-employment testing, just as you always would. Remember, we are now considering our employees as investments, so we should use due diligence in hiring them.
I can honestly say that I am excited about entering into our most recent banana. It is an opportunity for dealerships to evaluate their positions and business and prepare for the changes that are ahead. My euphemistic use of “banana” in this article is a bit silly, but ultimately serves to reinforce my point. By making the idea of an economic recession silly, we can see that there is nothing really to fear from it. It is a simple reality of business that we will deal with and overcome. And frankly, calling a recession a banana is no more silly than referring to it as an “economic plateau,” “period of negative growth,” or “slowdown.” It is, however, more fun to say.
ADESA has named 20-year industry veteran Dave Fountaine as the new general manager of its Buffalo auction.