Employee turnover in dealerships is a long-standing challenge. A COX report states that 72% of franchised dealers say finding and hiring the right employee is challenging. The turnover eats into dealers’ profits, and impacts revenue in many ways, including wasted time, resources, and training costs. In addition, the improper fit delivers poor customer experience and impacts sales and upsell opportunities.
Your dealership could combat high employee turnover and nurture a top-performing team for the success of your stores. It could be done in the following ways:
- Understand the prime reasons why they quit
- Build a positive environment and productive team
- Combating turnover with—better hiring and employee growth and training
Understanding the reasons why they quit:
COX study found that the top reasons why employees consider looking for a new job are as follows:
- 48% better pay
- 27% more advanced opportunities
- 25% better work-life balance
Creating a motivating pay plan could help reduce employee turnover in dealerships, improve productivity, and retain the best talent. Furthermore, dealership’s success depends on its people and their behavioral traits that create the highest level of job satisfaction and endurance. If the salesperson possesses the right mix of behavioral characteristics, they don’t need to overwork to succeed.
Getting the proper behaviors from people is very much related to their compensation—rewarding requirements of the job expectations and disincentivizing any behavior outside of expectations.
Three critical factors to consider while developing a motivating pay plan
Gross profit: Finance Manager solely compensated on gross profit of car deals and not incentivized to sell a balance of products for a fair price. As a result, behaviors can occur that lead to misunderstanding for consumers on what they are purchasing and how much they are paying for it.
Customer satisfaction: This should be a key consideration while developing a compensation plan. A plan that clearly articulates and appropriately rewards critical behaviors enhances CSI and consequently leads to low cancellations.
Setting the right expectations and objectives: Produce income for the F&I office/ dealership that is balanced and fair to the consumer. Consistently presenting options to consumers and setting a clear goal of how many products they need to present and how many a consumer is expected to purchase.
Building a positive environment and productive team:
67% of franchised dealers say motivating and retaining quality employees is a challenge.
Creating a supportive work environment is elemental in building an effective team and enhancing the perception of the retail auto industry. A positive environment would let the employees feel cared for and see a future for themselves in the dealership. In addition, it would allow you to retain quality employees in your stores.
Here are a few ways to create a supportive environment and build productive teams:
- Recognizing employee accomplishments. Making your staff feel valued, and appreciating their contributions produce organic determination to go the extra mile. Hand-written thank you notes and employee recognition programs such as celebrating appreciation day on social channels make a dealership a great place to work.
- Leadership programs. Effective leadership comes naturally to some, while others could use leadership programs to help build team management skills. emotional intelligence, clear communication, constructive feedback, and problem-solving abilities can be developed to bring out the best in the leader and their teams. Even the small changes in the team and culture lead to big success in the long run.
Ways to combat employee turnover in dealerships—
Better hiring: Taking the benefits of personality and cognitive assessment will help you get ahead of the problem and identify the right person for the right role. Additionally, the personality and cognitive assessments help you understand the focus area of training for your team. Assessments provide insights on how to better communicate with your staff.
Employee growth and training:
When dealerships do not have a strategic training and development plan, it leads to inconsistent store experience. In addition, impacts employee performance. With comprehensive training, your sales team can transform into friendly, knowledgeable, and trustworthy people customers need to complete their purchases. Furthermore, proper training guides sales teams to effectively offer related products to increase the value of a sale. Thereby enhancing employee performance, raising employee satisfaction, and preventing turnover.
The problem of employee turnover in dealerships could be curbed through tangible solutions. Concrete ways to build powerful teams and reduce employee turnover include building a positive work environment, creating a motivating pay plan, and providing recurrent training to enhance employee performance and drive growth. PRO has been supporting dealership success for the last three decades. Call us today to get custom solutions for your unique needs.