Just in the last three years, I’ve reviewed nearly 20,000 resumes and have lost track of the number I’ve reviewed, phone screened, and interviewed. This volume of candidate screening me an abundance of information and insight. I can predict answers often before I ask the questions in an interview. I know when an answer is an outlier because I’ve asked it so many times. That outlier may be a good or bad thing but being able to recognize it as an outlier comes with the volume of times the question has been asked and can be extremely helpful in identifying top talent.
Let me ask you if you are looking for a new controller, are you qualified to do so? What I mean by that is if you have owned a dealership for 15 years and you’ve only had one controller, does that make you an expert at hiring the next one? If you only have to hire one person in a specific position every 5, 10, or 15 years – a) you are incredibly lucky and blessed, but b) you are likely pretty lacking in experience in hiring for that position. And for some positions, the qualifications needed to excel in the position have changed over that time.
The flip side is the dealer who is looking to hire a new GSM and has hired eight of them in the last two years. Does that make the dealer an expert at recruiting GSM’s? To answer that you would have to look at why the dealer has had to hire eight of them. If it’s due to any turnover problem, the problem might lie in the hiring process, and the dealer is becoming an expert at hiring the wrong person. Or the problem could reside in an employee engagement and retention problem. They hire the right person for the job, but issues in the store make it the wrong store.
Overall dealers are usually experts at selling cars or running the dealership, not hiring staff. Now I’m not saying they shouldn’t be involved in the hiring process, they should be, but many of them should also seek assistance in their hiring process, especially if they don’t have a dedicated and highly skilled human resource person on staff who is fully involved in the full cycle hiring process.
There is good news, however, if you want to conduct full cycle recruiting and hiring for your store, without outside assistance, I’m going to share some things I’ve uncovered through my experience with you that will improve your odds for long-term success. Before we get there though, let’s look at some statistics from the 2017 NADA Workforce study. This study is across all franchise operations in the U.S. The chart below is just a snippet of information with primarily variable operations positions.
First, dealerships do a horrible job with business development representatives (BDR’s) and sales personnel. Turnover above 70%, only 22-35% stay more than three years. As you go across the chart, apart from the closers, the average tenure for active employees rises, which means that the applicant pool you get to select from if you terminate this person in your store grows smaller.
The Bottom Line
I want to draw your attention to the bottom line – the median tenure at termination. As a reminder of what median is, for all non-math geeks, the median is not average. Median is when you put all employees on a list sorted by their tenure from longest to shortest, and you record the middle value. So, if you have 100 employees 50 of them will be below this and 50 will be above it. Let that soak in a minute. Half of our BDR’s and salespeople who leave us (voluntarily or involuntarily) did so in less than five months. F&I managers 13 months? Sales Managers and GSM are even under two years. This isn’t confined to franchise dealers; I see the same thing across all dealership types. Employees in those positions typically have a lifespan in most dealerships of less than two years. Why?
There are two primary reasons. First is engagement and retention problems. If your dealership median tenure at termination is significantly higher, this could be the issue, and you would need to spend some time evaluating why you are losing them much further in the employment process.
The second reason is you likely have poor recruiting, screening, hiring, or onboarding practices which causes your dealerships median tenure is significantly lower (if that’s even possible for BDR’s and sales personnel) Could be you have all four issues. You simply have a broken system, which given the right attention can likely be fixed. To do so, base your screening process on uncovering the CMETRICS, which will be covered in detail throughout this blog series.
Next week: The most common poor recruiting, screening, and onboarding practices.