- Employee turnover is costing you – wasted hiring, recruiting and training expenses; inexperienced sales staff; lack of continuity with customers; and, the bottom line: lost sales.
- Reverse the tide of employee turnover. A lot of your revenue is going toward payroll, so it’s just good business sense to ensure your employees are performing well. What’s more, your long-term success is going to be based on attracting and retaining employees who are looking to make a career with you as opposed to just having a job.
- A culture of learning isn’t a buzzword. It’s your competitive advantage. The automotive industry is changing quickly and it’s going to shape your business for years to come. Between the way consumers shop and buy cars, technology, innovation and demographics – this isn’t the car business of even 10 years ago. Loyal happy employees + loyal happy customers = your profitability. Building a culture of learning can help achieve all three and future-proof your dealership.
That salesperson who just texted you he was quitting just cost you $15,000. That’s the average cost to a dealership to lose an employee.1 Of course, that number could be smaller based on the size of your operation, but even if it’s $5,000, that’s still a lot of money! Turnover costs you in other ways, too: wasted hiring, recruiting and training expenses; inexperienced sales staff; lack of continuity with customers; and, the bottom line: lost vehicle sales.
But you’ve been down this road before — a lot — and so has every other car dealer in America. Fact is, turnover at dealerships is dismal and has been on a steady incline over the last five years. It’s not good for your business; nor is it good for the long-term health of our industry.
Dealership turnover rates in 20162
- Overall turnover: 39% (up from 26% in 2014)
- Sales: 67% (only 33% reach the three-year mark)
- Service advisors: 41%
- F&I: 38%
- Sales managers: 28%
- Service technicians: 22%
- General managers: 16%
- 9 out of every 10 females
- Millennials: 52% (Millennials account for 60% of hires)
Whether you are a four-person operation or have 100 employees on the payroll, a strong and stable team can make up the difference of narrowing margins and reduced gross by turning more inventory faster and improving customer retention. A team that’s always in flux never achieves its potential.
Reversing the Tide of Employee Turnover
A lot of your revenue is going toward payroll, so it’s just good business sense to ensure your employees are performing well. What’s more, your long-term success is going to be based on attracting and retaining employees who are looking to make a career with you as opposed to just having a job.
These types of employees are increasingly making choices based on an environment that allows for growth and opportunity, and a key strategy to achieving that is by being equipped with the right training to help them be successful. A learning environment is conducive to the things that all employees want: how to do their jobs better, understanding customers, and making the most efficient use of processes and tools.
Overwhelmingly, though, you and your dealership are the ultimate beneficiaries of an environment that offers, encourages and supports ongoing learning. You can create opportunities for growth that work for both your team members’ goals as well as your own long-term goals, and you can improve morale and productivity by empowering team members with information that will help them do their jobs better. At the same time, you’re also providing the experience customers expect: knowledgeable employees who are keeping pace with the rapid changes in technology and can guide them through the buying process quickly and efficiently, paving the way for return business. You also benefit from the long-term effects of building a sense of ownership and accountability, knowledge sharing and inquiry, and enhancing your employees’ ability to adapt to change. This helps minimize turnover and in turn lays a strong foundation that will help you thrive in our rapidly changing industry.
What Does a Culture of Learning Look Like?
Again, it doesn’t matter how big or small your operation is, your leadership and your buy-in to the philosophy that learning – at all levels – is critical to your success. It’s about nurturing a mindset that encourages learning and development. Continuous and ongoing, this type of learning helps drive greater employee and dealership performance all year long. Before you conclude you don’t have the time or resources to take these steps, think back to the money you lost when that salesperson texted you to tell you he was quitting.
If all this conjures up visions of epic spend and outsourcing, classroom facilities and subscriptions to online universities, there are other ways to create a highly effective culture of learning that don’t require a significant financial investment. But owners and managers must lead by example and communicate at every opportunity that learning and development is highly valued at your dealership.
Six Steps To Build A Culture Of Learning At Your Dealership
1. Understand that adults learn differently than children do.
First, adults aren’t used to taking direction in education like children. Children learn because they are told to learn certain things and will do so without questioning why. Adults, on the other hand, need to know why they need to be learning something, how it will solve a problem(s) and be able to connect the learning to the WIIFM (What’s in it for me?).
- Employees need to be involved in decision-making about their learning so they buy into the concept and can own it. Let them to choose what to learn and how they’re going to learn it.
- Ensure they see the WIIFM: more money, increased productivity, career growth, etc.
- Adults learn experientially. Let them apply their own experiences during the learning process. Understand that reading and listening complement learning, but shouldn’t be the centerpiece. Adults want to connect and personalize their learning.
- Team members must see learning as impactful and relevant, and immediately applicable to their own lives.
2. Create defined learning plans for each role at your dealership and every employee, regardless of your size.
Learning and development needs to make sense for your employees’ roles and your dealership’s size. Make learning a strategic initiative rather than an administrative task. Defined, role-based learning plans are a great start to ensure that everyone on your team has appropriate knowledge and skills for their role, and you can tie learning opportunities to your business objectives. This also sends the message to your team that you care about their future.
Consider the hard and soft skills needed to achieve success in the specific roles and use that information to create role-based learning plans that ensure employees are always gaining knowledge and not stagnating. For example, hard skills include things like product knowledge, process knowledge, systems knowledge, etc., while soft skills consist of more intangible qualities like customer handling, communications and negotiations. It’s very simple: define what knowledge/skills each person needs for their role and make a list. If they possess the skills already, then the learning plan will be how to increase/improve that skill. If they need the skill, then the learning plan will be how they can gain it.
For example, Ted is a new salesperson who just joined your dealership. You give him a learning plan that he needs to accomplish within the first 90 days of his employment. Some of it includes doing work on his own; other parts include working with an existing salesperson to improve his skills. The plan is simple enough:
- Shadow Ted for the first week to observe customer conversations and closing abilities.
- Do 10 sales presentations to dealership personnel attempting to sell the 10 oldest cars on the lot.
- Identify five vehicles to learn and present key features to a seasoned salesperson.
- Teach a car to the team during the next sales meeting.
- Read two articles from relevant industry resources weekly.
- Present a summary of your research during the next sales meeting.
3. Communicate your plan. If you want everyone to buy into this ongoing concept of continuous improvement and learning, let them know what you’re going to do. Encourage participation and don’t be afraid to tie incentives to it. Everyone needs to be on board with this environment, but understand it can take time to achieve the momentum you desire.
- Kick off the program with a challenge, incentives and rewards.
- Get new employees on board immediately. They won’t know any different and are less likely to resist.
- Make sure that your learning message is front and center and is consistently communicated at every opportunity to the team.
4. Provide resources.
Learning resources should be readily available and easy to access. They can be built into the customized learning plan and are also great resources for learning and discussion on a regular basis in staff meetings. Your plan should include a mix of formal, informal and on-the-job development opportunities. Connect employees to content that will help them grow. They need access to learning opportunities that stretch and motivate them to achieve their goals and, consequently, yours. There are innumerable sources of great information on the internet. The following sources are either low- or no-cost:
- NADA, NIADA and its state association affiliates have numerous training opportunities that are virtual and free, as does Cox Automotive.
- NIADA’s national and state publications are excellent sources for information on the state of the industry, technology, marketing, sales, etc. Make them available to your team.
- Websites such as Cox Automotive’s Learning Center is full of articles, white papers and videos at dealerlearningcenter.com. No-cost virtual learning opportunities are also available. Dates are posted on the site under the Events section.
- Ensure they’ve got 24/7 access to resources. Consistent access to resources enables employees to learn on their own terms.
- Encourage knowledge sharing between employees. This is a great opportunity for team members to use social media to share their knowledge. Encourage everyone to share their knowledge, regardless of their experience, fearlessly. This builds confidence and enables employees to tap into other employees’ skill sets.
- Consider presentations from outside sources (marketing partners, vendors, outside speakers) in a monthly lunch-and-learn format.
- Webinars There are all sorts of free webinars out there to build skills and learn more about the industry. Check out the offerings from AutoRemarketing, Automotive Newsand Digital Dealer, to name a few. YouTube is also a great resource for developing soft skills and effective communication. Think about incorporating webinars into learning plans as well using them as a group learning opportunity for your entire team.
5. Make time for learning.
No doubt that business is a top priority, especially if you’re running a lean ship with just a few employees, but learning contributes to your success. Set aside time weekly for employees to focus on development. It’s a great way to show your support by ensuring every employee has a dedicated time during which they can focus uninterrupted energy toward an activity that helps them develop. Whether it’s an hour a week or 15 minutes a day, that’s time your team can use to grow their skills and knowledge. Schedule it and stick to it.
- Identify informal training opportunities (job-shadowing, cross-training) as well as formal opportunities
- Keep learning top-of-mind through creative techniques such as social media, digital invitations (e.g., Evite) and simple reminders in the break room.
- Recognize and celebrate learning milestones and accomplishments along the way. Here’s another opportunity for team members to share their successes on social media — and make your dealership look good, too, making you attractive to other potential employees.
6. Coach and reinforce.
Do not expect learning to stick immediately. Between the distractions of work, life and those three obstacles that can impede success — ego, fear of failure and complacency — you’re going to have to be patient (but not passive).
- Make coaching conversations part of your culture, but first ensure you and your managers (if you’ve got managers) have the knowledge and skills to be able to coach. If not, develop a learning plan for yourself and your leadership team.
- Use real on-the-job observations of work performance to discuss wins and opportunities. For salespeople, it could be anything from effective use of your CRM system to working on soft skills such as better communication with customers.
- Schedule regular check-ins with employees to help them stay on track so they achieve goals and complete development activities on time and with the right outcomes. This also gives coach and employee opportunities to shift priorities if necessary.
- Reward accomplishments and milestones in learning. It could be financial incentives or rewards, such as a dinner at a high-end restaurant, a day off or a trip to an industry event, such as NIADA’s Annual Convention & Expo. There are numerous low-cost options. Ask your employees what they want.
- Catch team members demonstrating the skill or knowledge they’ve learned and reward them on the spot.
A culture of learning isn’t a buzzword. It’s your competitive advantage. The automotive industry is changing quickly and it’s going to shape your business for years to come. Between the way consumers shop and buy cars, technology, innovation and demographics – this isn’t the car business of even 10 years ago. Loyal happy employees + loyal happy customers = your profitability. Building a culture of learning can help achieve all three and future-proof your dealership.
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1 Source: Aberdeen Consulting Group, 2014
2 Source: 2016 NADA Dealership Workforce Study