This summer, American auto dealers made two key realizations. First, they can, in fact, sell and service an impressive number of vehicles in a pandemic. Second, they can accomplish these things with a fraction of the staff they had to start the year. As a result, over the past two months, many dealers across the nation have enjoyed a rapid recovery and record-setting profits.
To be fair, much of this recent success can be attributed simply to supply and demand economics. Additionally, dealers’ business benefited from, among other things, consumers’ shifting car buying and mobility preferences and favorable OEM financing and incentives. These factors drove consumers to dealers’ websites, showrooms and service lanes once government mandated lockdowns eased. Notably, most dealers navigated the swift business recovery with leaner and, in many cases, skeleton crews.
These outcomes were a welcome relief for dealers whose business suffered or totally shuttered in March and April. However, today, dealers are reckoning with how much and what kind of headcount it will take to sustain long term success.
Below we outline several ways to develop a strategic staffing plan that will position your dealership to succeed in the post-COVID-19 retail era. And if you’re looking for more tips on how to move forward with your dealership, join us tomorrow for Elevate 2020, the only retail automotive event focused on building your best-in-class people operations, for free!
Right Size for the Right Customer Experience
Because dealers successfully reopened and delivered promising returns with a smaller number of employees, many will run leaner for the foreseeable future – and justifiably so. However, when it comes to staffing your dealership, short-term thinking may provide a band-aid fix for today’s issues, while leading to unintended, long term consequences. The question you are likely asking is what investments – people, process, technology – will drive the business forward? Just like investing in cost-cutting measures to preserve cash to fund operations, looking at your operations today may be the wisest decision on how to invest back into your organization to drive positive impact.
Think about this: What will happen when all the new customers from the summer start to return in later this fall/winter for their first maintenance or repair job? Couple that with the individuals that delayed or neglected car maintenance during the pandemic. And that’s not even taking into consideration the influx of sales activity that may occur when dealers’ inventory is completely replenished after Labor Day. Will your reduced team be ready to address the increased demand? Will BDC reps and sales consultants be in a position to cover all internet and in-person leads adequately? Will service advisors think about maximizing each RO or just focus on getting through the growing list of appointments and walk-ins?
These hypotheticals underscore the broader need for dealers to question how many employees are truly needed to deliver an optimal customer experience. Studies suggest that when employees feel stressed or unhappy, customers may bear the negative brunt of such emotions. Additionally, understaffing can diminish employee morale and the store’s ability to deliver convenience and speedy service, two key components of an exceptional customer experience. And when customers are disappointed, they may take to online review platforms, such as Yelp, Google and Facebook, to air their grievances. When you run understaffed and overburden your employees, you open the dealership up to damaging consequences to which the consumer and your OEM will pay close attention if CSI scores begin to suffer.
By having more employees on staff than you think is necessary right now, dealers can mitigate the risk of bad reviews and lower NPS and CSI scores. You can always cut staff hours, but you can’t always win back a disappointed, or worse, a disgruntled customer. And if you haven’t already asked your employees if they feel spread thin, now is probably a good time to check in with your team to see how they are feeling and if there’s anything that can be improved to make operations, their workload and overall approach to customer service better.
Adapt to Changing Skills Needed
In addition to right-sizing their headcount, this is an opportune time for dealers to reconsider the right types of people needed to fill their ranks moving forward. This comes on the heels of our industry’s acceleration of digital retail.
Evolving consumer tastes and demands, plus rapidly changing technologies have led to a dissonance between automotive customers and dealership employees. With the rapidly-changing realities of today’s dealership staffing needs, it may be best to reassess whether your prior employees possess the necessary soft skills to adapt to a digital first retail world. For example, some of your all star sales consultants might have been great negotiators, but don’t have what it takes to focus more on the customer experience than negotiation as more dealerships have set pricing. Soft skills, such as empathy, attentiveness and emotional intelligence are the keys to a successful team moving forward.
Given the shift to digital retail, dealers have the opportunity to reach an entirely new pool of jobseekers who previously may not have been interested in working for a dealership. Moreover, this is an opportunity to focus on individuals who have the aforementioned soft skills and customer-service mindset necessary to please today’s consumer.
Attract and Qualify Talent Based on Competencies
As dealers grapple with the evolution of talent in the stores, how managers attract and select talent will be more important than ever. Regardless of when and how many new employees your dealership needs, implementing a streamlined, standardized evaluation process should be a top priority. Following the same steps to vet prior and potential employees will save your business time and money so you can focus on other mission critical priorities. Today’s dealerships may have an incredible opportunity to lure great talent from other impacted industries – namely tourism, entertainment and hospitality that have been substantially impacted by the COVID-19 economic downturn. By looking at a competency-based approach to bringing in talent, you can look for candidates that possess great customer service skills even if they haven’t worked in automotive in previous roles.
Attracting the right talent starts with writing effective job descriptions. And while some roles might require specific certifications, job descriptions should highlight preferred competencies rather than required experience. By focusing on a jobseeker’s traits, it keeps the window of opportunity open to entice someone from outside of the industry.
Reading through every single resume can be time consuming and unnecessary. Utilizing pre-screen surveys tailored to each role can speed up the process and help you avoid unqualified applicants. Additionally, update your employee skills tests to ensure you’re targeting the right skills for the shift to digital car sales. These same tests can be used on furloughed employees when they reapply for work.
In addition to gauging if your new applicants have what it takes to excel in the new retail auto era, it’s important to verify who they are. Up to 85% of job applicants lie on their resumes. As such, reference checks and background checks are steps your dealership should always complete before extending a job offer. Both of these tools can be automated and completely digitally to cut down on your time to hire.
Implement a Strong Onboarding/Re-boarding Process
After a hire is made, it’s crucial for dealers to have a structured onboarding process designed to get employees ramped and producing quickly. This is more important now than ever given the unpredictability of how the pandemic will unfold in the coming months. And the same holds true for “reboarding” furloughed employees. The productivity of every employee every day matters.
An effective onboarding process empowers your dealership to get new hires and re-hired workers up to speed and contributing right away. By starting the process before the employee’s first day, new hires and rehires can spend day-one learning new skills, policies, and practices, instead of filling out paperwork. Plus, it can lead to stronger engagement and retention. With structured onboarding, 62% of companies experience faster time to productivity and 54% claim to have better employee engagement.
Navigating the uncertainties of 2020 has been taxing on all businesses. And through it all, your team has enabled your dealership not just to stay afloat, but thrive. By developing a strategic staffing plan you can achieve peace of mind knowing you have the best team in place to drive long-term profit and success. For more pointers on keeping your dealership looking toward the future, register for Elevate here.