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5 Steps to Reduce Turnover at Your Dealership

by Lindsay Lauck
on December 19, 2018

Turnover in the automotive industry is not only a huge problem—it’s a growing problem. According to a study conducted in 2016, turnover increased in 2016 by 3%, reaching 43% annually for dealerships. That means most dealerships lost around 23 employees every year. And turnover is expensive. The cost of replacing a single lost employee can reach $45,000 each year. This type of issue should be top-of-mind for every single General Manager (GM) and Dealer Principal Owner (DPO) working today. To combat this issue, Dealertrack DMS hosted a live session with industry expert John Grace and Tom Stocco, Chief Financial Officer at Van Horn Automotive Group—a 16-store dealership group with a great retention track record—for advice.

Improve Training with Better Technology Tools
Van Horn Auto Group doesn’t cut corners when it comes to training and part of that commitment includes investing in easy-to-use technology. The investment goes further as the dealership employs two,full-time learning professionals and trainers who travel from store to store to ensure proper onboarding and continued education efforts are aligned with the company’s objectives.

“When people feel empowered that they can affect change and reach their goals, I think that has such a positive effect on culture overall.” – Tom Stocco, Chief Financial Officer at Van Horn Automotive Group

Empowerment is the Key to Great Culture
“Culture” can be accused of being a buzzword if you don’t take it seriously. For Van Horn, allowing each department the autonomy to set their own goals, meeting as a team, and sharing wins and losses, together, helps drive the overall culture across multiple stores. According to Tom Stocco, “When people feel empowered that they can affect change and reach their goals, I think that has such a positive effect on culture overall.”

Adjust Your Hiring Techniques
No one gets hiring right, every time. But, patience is key. You’ve spent time and money on building your dealership’s culture, so don’t rush it. Be sure to tell the story of your dealership to each and every candidate who walks into your door. And, when you do, be open and transparent about it. Otherwise you won’t find the right fit.

Tie Your Hiring Strategy to Business Strategy
If you’re willing to invest in your employees, it will benefit your dealership in the long run. Van Horn hires employees with the expectation that they’ll stick around, and they’re willing to incentivize them as such. The dealership will help cover half the fees of a college tuition for employees going to school. This type of long-term investment keeps Van Horn’s turnover low, helps improve the career trajectory of their team, and goes a long way towards the strategic improvement of their hiring plan.

Think Differently
Van Horn’s management training includes two-day courses that include hiring best-practices and compliance strategies. But beyond that, Van Horn also takes its managers through training to grow and develop as better and stronger leaders. The investment is aimed to help each manager discover how to better motivate their teams and discover ways to improve each staff member’s career in the automotive industry. It’s this “next level” of leadership training that strategically impacts the tenure of employees.

The people side of the automotive business faces the challenges of hiring and retaining talent greater than many other industries. But, DPOs and GMs have faced many challenges before. It will be the creative innovators whose dedication to the development of their employees and the transparency of their business who come out on top.

See the entire interview between John Grace and Tom Stocco of Van Horn Auto Group here.

Tags: DMS, hiring and retaining talent

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