We live in a world ruled by technology, but people are still essential to the car buying process. The most valuable component of any business is human capital, and the knowledge and personal attributes skilled employees bring to the table. The auto industry is experiencing some trouble in this area with high turnover rates, and a millennial workforce that is not as attracted to working in dealerships as previous generations.
Overall Dealership Turnover Is 40 Percent
According to the 2017 Cox Automotive Staffing Study, the top three positions experiencing the highest turnover were sales, service advisors, and F&I. Sales positions experienced an alarming 67 percent employee turnover rate, while service advisors and F&I professionals were both over 40 percent. Overall turnover is 40 percent. The other troubling statistic is the apparent difficulty in holding onto millennial talent. Millennials were 60 percent of new hires, and over half of them leave positions within the year.
What Do Millennials Look For In A Workplace?
A study by the Harvard Business Review showed the top three factors millennials are looking for in the workplace: the opportunity to learn and grow, a quality manager, and proper management. Millennials may fear that this is lacking at auto dealerships. There is also a perception that most roles at a dealership are sales based, and that most salaries depend upon commission. For a generation looking to erase student debt and make up for low wages, this dampens attraction to working at dealerships.
Turnover Can Put A Financial Strain On Dealers
With the average cost of hiring a new employee at $10,000, these numbers reveal a considerable expense that is hitting dealerships across the country. While the money lost is cause for concern, when a person leaves a position, all the knowledge gained and customer relationship walk out the door with them. What can dealers do to reverse this trend, and attract millennial talent?
- Have A Staffing Plan
Approximately two out of three dealers to do not have a staffing strategy. It is essential that dealers assess the type of skills and experience they need for each position in their dealership. A comprehensive staffing strategy should include plans to recruit talent, effective methods of training, evaluation and communication policy, and ways to reward those who meet or exceed goals. This plan should provide a guide for every step of the hiring and retention process.
- Educate Prospects On The Various Positions Available At Dealerships
As stated above, there is a perception the majority of jobs at dealerships are related to sales. During recruitment efforts, dealership employers should highlight the various other ways younger workers can make an impact through marketing, managing, and service advising. People respond when they have options, and showing the different ways (and benefits) of entering the automotive industry can attract the best talent for lesser-known positions.
- Dealers Should Discuss Career Growth And Make It Known That They Do
In 2016, a study showed that 71 percent of millennials were not engaged in the work they do. A huge factor that drives disengagement is when individuals feel there is no career advancement or communication about developing new skills. One of the primary factors millennials are looking for in a workforce is the opportunity to learn and grow. Regular discussions about career growth and professional development should be encouraged and initiated by employers. Knowing that management is concerned with their growth as an employee sends the right message to them.
- Actively Recruit Where Millennials Are
As the job market has increased, new working generations have a lot of options as to where they can work. Therefore, it is essential to get in front of younger workers and meet them where they are. College and online career fairs and social media (especially LinkedIn and Twitter) are great places to start. Both options give dealers the opportunity to show they care enough to come to them, and a chance to educate prospective hires on the impact they can make at dealerships.
- Be Flexible
According to a 2016 Deloitte study, 88 percent of millennials wish they could choose when they would like to start and finish work. There is also a trend toward remote work. Also, 82 percent were more loyal to their employers if they were offered workplace flexibility, and 34 percent left their current employer because of a lack of flexibility. Dealership employers can retain millennials by seeing where they can institute flexible schedules or alternative work arrangements.
Millennials are now the largest generation in the U.S. workforce. It is crucial for dealership employers to create recruitment plans that target them with an emphasis on meeting them where they are, making career growth a priority, and incorporating flexible work arrangements when possible. These factors will make it easier to hire the right millennial talent for the position that fits them most and addresses the most important dealership staffing needs.