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College Grads Don't Want to Work in a Dealership - How Can We Change That?

What's the automotive retail industry's greatest challenge? According to several top selling dealers I've talked with recently, the answer is the negative perception the public has about car dealers.

 

Their concern isn't focused as much on what the customer thinks, but more so on what potential employees think -- or rather, what they don't think. The problem, according to the dealers I've talked to, is that top, qualified individuals graduating from universaties do not consider a career in automotive retail. The ones that do, usually end up working at a vendor, not at a dealership.

 

What college student today, when asked where they are going to work upon graduation, would be proud to say, "I'm going to work for a car dealership?" Not very many.

 

We all know why the negative perceptions abound -- much of them well-deserved, unfortunately. And that turns potential employees away. Vendors who insist on running commercials that consistently paint the dealer in a bad light (CarFax, Cars.com a couple of years ago, Edmunds.com's Confession of a Car Salesman article) don't help. As don't the histrionics emanating from consumer advocacy groups such as the Public Citizen, which almost always rely on unbelievably old data.

 

However, I think the problem is deeper than just some negative perceptions about how dealerships interact with customers. The overall structure of the business itself screams, 'DON'T WORK HERE!" Automotive retail can be a brutal business. A job in sales requires an ability to handle rejection. Long hours, often with boring bouts of inactivity as salespeople wait for "ups," minimal job security and benefits, and no real formalized process to move talented employees into management do not make for an attractive option for top flight graduates.

 

Other industries have either as tough or tougher hours. Wall Street, lawyers, doctors -- but those professions have been glamourized by Hollywood and the media, while car sales have been painted as an industry for sleazeballs. The industry desperately needs to start thinking and implementing ways to change that cultural perception.

 

And top dealers are trying. Dealers like Greg Penske of Longo Toyota and Greg Goodwin of the Kuni Automotive Group are focused on it, creating businesses that catch the attention of potential employees. But it's going to take the efforts of more than a few dealers.

 

Each dealership can start with some easy steps.

 

Dealership Consultant Mark Rikess, in a recent column in Dealer magazine, offers some intriguing ideas on how to attract today's generation of employees.

 

Rikess writes: One of the biggest generational challenges facing dealers today is how they can more effectively recruit and market to Gen Y. Due to their sheer size, this group in the very near future will dictate dealership profit and loss as the Traditionalists and Baby Boomers ride off into the sunset. The changes to the sales process, work scheduling and communications will cause the same amount of trauma and change as was dictated by the internet. Some options to consider in your efforts to more effectively recruit include:

 

Recruiting – A four pronged approach should be implemented to attract quality recruits:

1.      A button on your website that gives perspective employees information about what it is like to work there, including training, benefits, and life/work balance.

2.      Placards/signage in the customer lounge and showroom floor showing a woman stating that job opportunities are available.

3.      Quarterly emails to your customer list stating that job opportunities are available.

4.      Postings on craigslist for “customer service reps” with benefits such as training salary, flexible hours, opportunity to work with a great team, etc. Do not mention it is an auto sales job in your posting.

 

Flexible work schedule – Life/work balance is critical (notice which word they put first). Dealers must determine methods for creating a 40-hour work schedule with at least one weekend off each month.  Flexibility can be achieved by staffing according to traffic flow.  Our research shows that 70% of sales occur in 30% of the time the sales department is open.  By staffing the showroom and prep center according to demand and employing lower cost staff, sales people can sell more cars in fewer hours.  Examples of lower cost staff include document processors and delivery coordinators.

 

Revised pay plan – The traditional pay plan based on gross with random spiffs will not attract quality Gen X and Gen Y sales people who have never sold cars. They would rather be paid $14 per hour to work in sales at a Best Buy or Apple Store rather than take on the financial risk of a straight commission pay plan.  Today, typically more than half the new car deals are “minis” and the other half require excellent negotiating skills, a skill lacking in Gen X and Gen Y.  Gen Ys in particular do not have the thick skin required for aggressive selling, having typically grown up in a coddled environment where everyone is a winner (ala youth soccer).  A pay plan that provides a good training salary, typically $2,500 or more for two months and then provides a combination of salary and compensation per unit sold (not gross) with bonuses works well.

 

Training – Training and orientation are absolutely critical to retaining Gen X and Gen Y.  According to Lancaster and Stillman in their book, “When Generations Collide,” when asked “Have you ever left a job because of lack of training opportunities?” only 3% of Traditionalists responded, “Yes,” compared with 15% of Baby Boomers and 30% of Gen Xers. 

 

Gen Ys want to be part of a team and your training program should recognize that by teaching about other departments.  In addition, Gen Ys need more than a basic job description.  According to Cam Marston in “Motivating the ‘What’s in it for me?’ Workforc,e” Gen Ys do better when their role is defined -- an overall picture of the job when executed properly and specific responsibilities.  Finally, all managers and employees need training on feedback – how to ask for it, how to give it, how to receive it, and what is appropriate behavior.

 

Rikess' suggestions are just a start. Let's get the ideas flowing and maybe we can start turning this ship.

Views: 89

Tags: Mark, Rikess, dealerships, management

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Comment by Rorie Hannigan on June 28, 2011 at 7:51am

This is a great post, many of the points hit the nail on the head especially with graduates in the UK.

 

I like what you said about recruitment in terms of using a female figure to promote jobs within the dealership.  20% of the force in the UK is made up of Women even though half of the consumers are women who often feel patronised in the sales process. Check out this article of how they are dealing with it in the UK here.

 

I know this may sound proposterous to some but flexible working hours can be very appealing. Managing capacity and demand can give you a clear pattern of when your most busy and it can also save on costs as well as ensuring that your service quality is consistent.

 

It must be extremely hard to get graduates into the dealership and show an interest in the jobs. If you think about it - generally when was the last time a graduate went to a car garage(they have been broke for the past 3/4 years). The last time I went was with my Mum aged about 8 so thats over a decade ago, a lot has changed since then which is something many graduates wouldn't be aware of.

 

Comment by Jason Manning on June 28, 2011 at 12:49am

I believe the future of the car dealer lies in its training program.  What does the dealer need in an associate?  Is the candidate willing to follow a training program to get them there? Training, training, training. 

 

At my dealer, I find my sales associates constantly need to be fed.  They need something juicy to sink their teeth into twice a week.  Something they can use to improve their selling skills.  College degreed associates still need dealer training for their market.  I've had associates with two degrees who couldn't sell until they went through a couple months of training and then they still needed to be trained twice a week for constant improvement.  I really wonder if dealers have dropped the ball with training programs.  We have a unique business that is made fun of and ostracized in Hollywood etc, but not everyone can do it very well.  The educated associates that can't make it at my dealer, ironically, walk away with a new respect for the business and that tells us a lot about how important training is.  They always say with sincerety that they respect the profession now.

 

Sales associates need current market condition training, sales basics training, and eventually we will need them to become a lynchpin at our dealers where they do 5-6 jobs in one.  It's a real challenge for a college grad.  Maybe they can't handle it because they've been "coddled" in their own environments.  I'm not looking for a college grad.  I'm looking for someone who can get the jobs done and follow our training.

 

I think we need to look for a valuable employee who is able to complete more than one job skill for the dealer.  We're asking for more now.  Our current employees will likely have to step up and take on more until we find our lynchpin that Seth Godin wrote about.  Hopefully it will be them.  We don't need more employees, necessarily.  We do need employees that do more.  I'm not looking for a coddled generation.  I'm looking for employees that can listen to our training and use it to benefit our dealer.  Our training has substance.  It is current.  It is challenging.  It is thought provoking.  It applies to the business markets you'll find in a global economy.  It is a study of an educated buyer.  It is about insight we've gained over the years of ups and downs.  It goes on and on.  Mostly its consistent and energizing with strategy.  It's the kind of training you'd get in any competitive and professional market.  For us, it's a car market.  Training is key.  A college degree is nice, but not a prerequisite by any means. 

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