Elevate 2020 kicked off this week, and although the event was much different than previous years, we still had an impactful session and roundtable that led to great actionable takeaways for the people operations side of the automotive retail industry.
Our keynote was delivered by Hireology’s CEO and Founder, Adam Robinson on the topic of people operations as a profit center, followed by a fireside chat with Inder Dosanjh, President of the California Automotive Retailing Group Inc., moderated by Jason Stein, Publisher at Automotive News. And finally, a forum for discussion was held on Wednesday, where industry professionals discussed how their companies have shifted due to the pandemic.
Here are some of the key takeaways from the first week of our all virtual Elevate 2020.
What’s Changed Due to COVID-19
2020 has been a whirlwind, and filled with a great deal of chaos. The unemployment rate reached a record high in April, and any industry serving in-person consumers is having to rethink the way they do business. “When we forecasted for 2020 in December of 2019, we were expecting it to be flat, or maybe have a 4-5% decline in sales, so by March our lives were upside down,” said Inder about the California Automotive Retailing Group’s initial reaction to COVID-19’s effects on the industry.
However, Inder saw a dramatic shift come June. His group as well as dealerships across the nation saw their profits begin to soar, and have had several months of record profitability as they operate with lower headcount.
“No one was more impacted by the last recession than retail automotive, and looking now, it’s clear to me that dealers learned,” said Adam Robinson. Dealerships quickly pivoted operations, and made the tough but necessary decisions relative to their employment levels. Because of this, dealerships are coming out of the pandemic stronger than ever before from an ongoing operations perspective. “We had to be very fluid… and in the end, I think we’ll say we really learned a lot from 2020,” said Inder.
The three greatest changes and brought on by COVID-19 for the retail automotive industry are:
- Dealerships are experiencing record profitability.
Dealerships are operating with much higher margins due to their exhaustive cost-saving methods introduced at the beginning of the pandemic.
- New buying methods are here to stay.
Consumers aren’t interested in wasting time. They want the buying experience to be as painless as possible with the majority of their time focused on the product.
- Staffing levels have changed.
The success that the industry has experienced with a lower headcount means that these staffing models will remain after the pandemic is over.
What Will Always Remain Constant
Relative to the retail automotive industry, there are some things that will remain constant, pandemic or not. Adam spoke about three reliable rules for your business.
Your team is your most critical asset.
No matter the market conditions, your team is the most important asset of your business. The most essential decision you will make for your company is how your hiring team fills your open roles.
The pandemic has amplified the need for high quality staff. Most dealerships are selling more vehicles with higher margins and fewer people, which is resulting in record profitability. But for measured, long-term success, every seat needs to be filled by the right person.
“You’ve got to have the best people on the frontlines,” said Inder. Through reducing staff and streamlining the buying process, Inder has seen a major increase in employee efficiency, and his staff on hand is getting paid better without the partitioned buying process that was common before COVID-19. Cathay Sparks, the Recruitment Manager at Pilson Auto Centers, echoed this approach in this week’s roundtable discussion. “We’re making it so one person can sell, finance, and deliver,” said Cathy, which has helped the company to reduce headcount while maximizing performance.
An immense challenge the industry will reckon with next year and beyond is how to maintain lower staffing levels and leverage the technology they have in place to make sure their teams are performing with maximum efficiency.
There will always be hard roles to fill.
Technical training and gaps in vocational training make certain roles harder to fill. However, the retail automotive industry as a whole was used to operating with an abundance of employees — and spending a great deal of money to do so. To be successful with a smaller staff, the right people, the right systems, and the right incentives must be in place.
11% of unemployment pre-pandemic was in the Leisure and Hospitality Sector. Post-pandemic, that number has increased to a whopping 40%. This gives the automotive retail industry great incentive to shift their hiring focus to the skilled individuals that are a part of this pool of talent. These candidates in particular have a lot of the qualifications that retail automotive typically looks for — they are service-oriented, customer facing, and used to working retail hours. Hiring these individuals can upgrade the quality of your team, so it’s important to think critically about your messaging and hiring strategies to appeal to them.
Good talent goes quickly. The post-pandemic rate of hires happening within two weeks of application submission is 60%, and 32% of dealers lose top talent because they lack a solid hiring process. Having a hiring process in place is essential to securing talent. Hireology data shows that it takes an average of 54 applicants to make one hire, and 10 qualified candidates to make one hire. If you’re not prompt with showing interest, scheduling interviews, and following up with your applicants, you’ll lose top talent to your competitors.
You now have more areas to attract applicants than ever before. Dealerships that use Facebook for Jobs, for example, received 28% of applicants through the platform. Utilizing the right channels to attract candidates is an important step in your hiring process that can save you a great deal of time and money.
Leaders who focus on their team will win.
Leaders who understand the ins and outs of supporting, communicating, and managing their team are the ones that are going to be successful long term. With fewer people on staff, it’s much harder to use headcount to make up for lack of skill, so management really matters.
“People are your product, and it’s not possible to win without that being true,” said Adam. Focusing on the way you bring new hires into your organization can have a profound impact on your business. According to Click Boarding, 69% of employees are more likely to stay for three or more years if they have a positive onboarding experience. In the retail automotive industry, the three-year turnover rate is almost 80%. So making sure that your new team members are brought into your organization with thoughtful and organized onboarding can help you drastically lower your turnover rate and keep top talent around longer.
A Sneak Peek at Next Week
Whether you attended Elevate this week or didn’t get a chance to sign up, we’ve got two more sessions to go, and we hope to see you there! Next Tuesday, join us for a look at how digitization and the customer experience at the dealership is evolving with speakers from Netchex, Dealertrack, and Twitter. Not registered? Do so here!