According to the most recent jobs report from the Bureau of Labor Statistics (BLS), the United States job market continued to grow steadily, with 261,000 jobs added in October 2022. This shows a slight decrease in the jobs added compared to the previous month, while the unemployment rate increased to 3.7 percent. Conversely, many high-tech companies have signaled – or already implemented – layoffs or hiring freezes. Could this mean a larger pool of potential recruits for dealers to scoop up?
With continued signs of strength in retail automotive and strong revenue potential, dealerships have some strong selling points to attract the best candidates. But don’t rush to hire the first available candidate. Successful hiring at the end of the year should be strategic. Hiring the right candidate is very different today. Let’s look at some of the challenges and opportunities dealers face when hiring.
Hiring Five Generations Deep
For the first time in modern history, there are currently five generations active in the workforce. Each generation brings a unique perspective to their job, providing an employer with a rich, cultural microcosm that can relate to every type of customer. Although the pandemic accelerated changes to the traditional workplace, many of today’s workers have reassessed their relationships with work, placing a priority on work/life balance as well as company culture. Making those diverse perspectives work effectively can be challenging for any employer.
Good news! The retail automotive industry just notched the strongest March sales in 20 years! According to J.D. Power, first quarter retail sales climbed 26 percent, a 70.7 percent increase as compared to March 2020. A few other indicators climbed as well. The average price of a new vehicle rose to $37,314 in Q1, nearly $3,000 more than in 2020. Retail profits from new vehicles are also expected to reach record levels of $2,225 profit per unit, up $786 from 2020. Analysts at J.D. Power forecast that March will likely be the second most profitable month on record as total retail vehicle purchases trend towards a total of $48.0 billion.
These indicators clearly signal a positive trend for the first half of 2021. But there is a potential wrinkle. Will you have enough staff – and the right staff – to support those customers driving cars off the lot? People are a dealership’s greatest asset – and often its greatest challenge. In an EFG study conducted among retail dealers across the U.S., 65 percent of respondents said recruiting and hiring high-quality people was their number one challenge.
Every dealer and general manager has made a poor hiring decision in the past, and chalked it up to “we’ll do better next time.” But what did that decision cost you? Our research found that every Poor Hiring Decision® (P.H.D) cost the dealership $75,000!
Chances are, you ended the third quarter in fairly positive territory. The majority of OEMs showed positive sales growth. The Federal Reserve cut interest rates a quarter point. Hiring remained strong in the majority of the US and the consumer optimism index is still high. Looks like it’s going to be a good Christmas!
Just like in the movie, Christmas Vacation, you can’t have good news without the bad. The political climate continues to make headlines. Tariffs remain in place, impacting both parts suppliers and OEMs. A battle over fuel efficiency is brewing in many state legislatures. And, the competition for good employees is stronger than ever.
As a dealership owner looking to thrive in the months ahead, what should you do? Focus on what’s in your control and invest in your best assets – your people.
Your people are your best assets. It’s an old adage but it’s true! Even with the move to more digital engagement, people are still critical to the retail automotive process. Keep it simple. Focus on the two tenets of staffing your dealership: hiring and retention.
When it comes to hiring, there was a nugget of good news in the recent Cox Automotive 2019 Dealership Staffing Study. The study found that generations are showing higher levels of interest in working at a dealership, specifically:
32% of Generation Z workers
36% of younger Millennials
This interest is nearly 10 percentage points higher than interest shown by older Millennials in their late 30s and early 40s (21%) and Gen Xers in their 40s and 50s (19%).
But these new employees will not be satisfied with a dead-end job and no opportunity for cross training or advancement. Make sure you understand that to retain these younger employees, they require feedback, opportunities for growth, and a management structure that fosters innovation. They’re not worker bees. They want to take an active role in their careers and your dealership. Give these new assets the training that supports their energy!
While you’re focused on hiring bright, shiny new employees, don’t forget about the great staff you already have in place. Keep your current team member assets engaged and invested by removing barriers for success.
Do you have a Top Performing salesperson who would like to become an F&I manager? Great! They already know your business. Now they just need the tools to grow and work even harder for you! Send them through both F&I and compliance training so that when they start work in F&I, they’ll sell your consumer protection products the right way, increasing both your margins and dealership compliance, not to mention customer satisfaction!
Do you have a service technician with excellent customer rapport? Fantastic! Give them a path to becoming a service manager and equip them with the right training for success. Will you have to back-fill those jobs? Possibly, but your new hires will see there is room for growth and your newly advanced employees who have experienced your commitment to their success will be more likely to stay.
There are lots of things swirling around in the world that could impact all industries. However, many of them are out of your control. What happens inside the walls of your dealership is in your control. And, investing in the people who share the space with you will help you thrive, not just survive. It’s a tried and true recipe for success.
With more than 40 years of experience helping dealers achieve their profitability goals, EFG Companies knows how to recruit and train your team into Top Performers. Contact us today to get started.