Hireology Co-Founder and CEO Adam Robinson sat down with Image Auto Founder and CEO Paul J Daly at NADA 2018 to discuss the importance of human capital management to dealer success. Image Auto recently launched a podcast, Dealers Compressed, and a video series, Compressed, focused on helping dealers remain profitable in the face of margin compression, and making the retail automotive industry better as a whole.
To kick off the podcast and video series, each episode covers one chapter of Like I See It: Obstacles and Opportunities Shaping the Future of Retail Automotive, a new book written by Dale Pollak. Dale is an automotive industry expert with more than two decades of experience as a dealer, technology entrepreneur and best-selling author. This week’s podcast and video episode focus specifically on chapter six of the book, “Making Your People a Higher Priority,” which is all about human capital management.
As highlighted in Like I See It and the Compressed episode, the average dealer payroll is $3.5 million, making payroll a dealer’s single greatest operating expense. This means to remain profitable, dealers need to focus on human capital management – including hiring quality employees, creating a desirable culture of advancement for employees and fostering a better experience for customers.
In Like I See It, Dale turns to Adam for his expertise on human capital management and Adam shared additional commentary in episode six of the Dealers Compressed Podcast, “The Greatest Inefficiency of the Car Business.” Here are some key takeaways from the conversation:
Building Your Best Team is Key to Customer Satisfaction
Automotive is a customer experience-driven industry. If dealers put the right people in the right seats and treat them well, they’ll ultimately deliver a great customer experience through their people.
Dealers Are Starting to Recognize the Importance of Human Capital Management
Dealers spend a significant amount of time trying to figure out how to turn cars one day faster. Meanwhile, 50% of a dealer’s cost structure is tied up in payroll and they aren’t doing enough to manage it. But many leaders in the industry are now starting to understand what human capital management at a dealership should look like and have the metrics and KPIs to measure human capital success. As a result, dealers are elevating the role of HR leaders and embracing partnerships with hiring and talent management providers like Hireology, which can give dealers an HR framework and help streamline the people side of the business.
Time to Hire is Key to Driving Profitability
Due to compressed new car sale margins, the service side of the business is one of the only profit centers left in retail automotive. If it takes a dealer 120 days to fill an open technician role and this timeline can be shortened to 40 days, that’s 80 days of billable time that can be added back to the business. When dealers hear about realistic examples like this, they are more open to investing time and resources in improved hiring and talent management.
The time for human capital management transformation in automotive is now. For more information, listen to the full podcast on the Image Auto website.