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Jared Hamilton
From: Jared Hamilton
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H Gregory Gershman

H Gregory Gershman Managing Partner

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How Many Sales Employees Should I Hire?

Here is the daily hiring and getting hired tip:

One of the hardest decisions a business can make is how many people to hire. With the high expense of turning over an employee, averagely $30,000, the choice of how much staff to add or replace can completely control your profitability for the year.

Most stores base this solely around how many cars they want to sell, or even worse the eye test when they see a client not being attended to at some random time. Using either of these methods can lead to over-population of the sales floor, because we are basing the amount of staff around one small instance; or just as bad is being understaffed because we only sell "fill in the blank". Maybe you don't sell more due to the limit in staff?

For dealership sales departments I use the client base as a measuring stick. For each 500 clean contacts in your dealership client base (including gained prospects) your store needs one employee engaged in marketing to them. This includes floor sales, internet sales, and business development.

500 engaged clients is the total amount any one employee can effectively market to on behalf of the dealership. Any more and it gets overwhelming and people slip through the cracks; any less and you have salespeople sharing stories all day with nothing to do.
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Mark Dubis
While you focus on quantity, I will assume you also want to hire quality employees that you will train and provide all of the tools they need to succeed and help the dealership build a strong loyal customer base. While our industry has no shortage of employment and placement companies to find dealers "bodies" most focus on people that meet a broad criteria. The challenge comes in retaining these people. Dealers as a group currently spend over $1 Billion a year in recruiting, hiring, and training for their people (http://ilovemycustomer.com/dealers-spend-over-1-billion-a-year-for-training/) We need to recognize that hiring and training is only the starting point, not the ending point. A new employee with great potential is nothing without the support, mentoring, and resources to excel.
H Gregory Gershman
Mark, quality is a must! I try to keep my posts focused, so this was strictly about staffing level, but it is all about who you keep. I just spoke this past year at Acura's national fixed ops convention about retention being the single greatest financial factor to a dealership's bottom line. The average cost for a turned employee is $30,000, and that is to net profit. You bring up a great point, and I will post a series on retention for the next week to address it. Always drives me crazy finding talent for dealerships, and then hearing back from the employee that they need a new opportunity 90 days later.

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