Author: efgmarketing

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Industry Trends

Managing Millennials

Eric Fifield Chief Sales Officer EFG Companies
Contributing Author: Eric Fifield Chief Revenue Officer, EFG Companies

“Millennials are just plain lazy.”

“How do you manage a group that doesn’t want to do any work, and expects rewards for just showing up?”

“I just won’t hire them.”

Do these statements sound familiar? Millennials have gotten a bad reputation from popular media. But, you’d be surprised at just how much of your current workforce is made up of Millennials.

The Center for Generational Kinetics defines Millennials as those born between 1977 and 1995. Those employees of yours that are in their 30s and early 40s are, in fact, Millennials. Would you apply the statements above to them? Probably not.

At 80 million strong, Millennials now represent the most influential generation in the marketplace. They are quickly making up the majority of consumers and employees. So, for those of you saying that you don’t know how to manage this new generation, I have good news for you. You already are managing them.

Contrary to popular belief, managing Millennials isn’t that different from managing other generations. It just takes understanding their key motivators.

Millennials are motivated by having a work-life balance, a clear path for advancement and growth, and recognition for achievement. They are also more motivated if they believe in the value of the work.  Does that really sound that different from Gen X, or even Boomers?

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Categories
F&I

Increasing Profit Margins the Right Way

Contributing Author:
Josh Rodriguez
Regional Vice President
EFG Companies

Do you remember being eight years old and doing something you shouldn’t be doing, like throwing a ball against the side of the house? A parent walks outside and tells you to stop, and you do until they go back inside. Then, you start back up and before you know it, you break a window. Well, maybe that was just me, but I am sure you can relate.  With everything that’s going on in Washington right now, it’s easy to take your eye off the ball and focus on rate markup. After all, regulators are shifting their attention to other matters, and even lenders are reversing some of the policies they implemented after the CFPB entered the playing field.

However, taking out the regulatory aspect, it’s simply too risky to rely on rate markups. Over the years, many states and lenders have capped the amount dealers can markup buy rates. Also, while lenders have rolled back some of their policies around rate markups, they are still more stringent than they were in 2008. It would come as no surprise if rate markups continue to tighten, and possibly even disappear in the upcoming years.

We all know the correlations between excessive rate reserve and refinancing.  We also know that when a lender refinances one of our contracts, the first thing they recommend to the customer is to cancel any and all products purchased by the dealer.  It’s a lose/lose situation for the dealer.  Not only do you lose your rate reserve, you now give back all of your profits from VSC, GAP, and ancillary sales.  The customer’s payment is reduced by a substantial amount and the lender is a hero, while the dealer is painted as the villain.  And, we all wonder why CSI is down and customer loyalty seems to be a thing of the past?  So, if rate reserve isn’t the answer, what’s the right way to increase F&I margins?

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Categories
Recruiting

Setting Realistic Job Expectations

Contributing Author:
Amber Hash
Recruiting Manager
EFG Companies

Struggling with Employee Retention?

It could be due to the nature of the industry. It could be due to a labor shortage. It could be due to your recruitment practices. Or, it could be a combination of all three.

The U.S. unemployment rate continues to sink, hitting a 17-year low in November of last year at 4.1 percent. Job seekers are finding work more easily than any time since the mid-90s. Openings have now topped roughly 6 million for five months in a row, a record streak, according to the Bureau of Labor Statistics. While the second quarter GDP notched an impressive 4.1 percent, labor market analysts cautioned that an increasing labor shortage could impact growth going forward.

In addition, according to the 2017 NADA Dealership Workforce Study, the median workforce tenure in retail automotive is 2.5 years. However, it takes employees in key production positions, like F&I managers, an average of three years to reach full productivity.

Going in to 2018, dealers were already struggling with employee retention. Compound that with a labor shortage, and the typical high-turnover nature of the industry could turn from a nuisance to a serious problem.

In my previous blog, I discussed how hiring practices can impact employee retention – specifically the importance of vetting your candidates. While vetting is extremely important in making sure you’re filling open positions with the right people, it’s equally important to set realistic job expectations early on in the recruiting process. This helps your team make sure they are searching for the right talent, and it helps to set up new recruits for success.

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