Finding quality sales representatives takes a lot of work and patience.  Advertising, screening, interviewing, and training takes up valuable time, energy, and money.  What happens when your new hires are introduced to the general population?

For many organizations new sales reps are left to fend for themselves.  After a very short introduction period, usually just a few days, new hires are expected to compete for clients with existing sales staff.  They are at a severe disadvantage.

Here are a few best practices to help your new reps weather their onboarding to your sales department:

1. Assign new sales reps a manager mentor.  Charge this person with building tasks for the day, keeping testy veteran sales reps at arms length, and guiding the new salesperson towards potential clients.  Do not hand this task off to one of your experienced sales reps!  
2. Give real leads to new salespeople with supervision.  Many times new salespeople are given old leads, or cold calls.  They are started out with potential clients with the least likelihood of sale, while experienced reps are given the best traffic.  Trust your management supervision and give new hires an equal opportunity to work with high quality leads, such as recent web leads or orphaned lease renewals.
3. Put team bonuses in place to motivate the veteran staff to want the new reps to succeed.  The existing staff is going to view new reps as taking a piece of the potential client pie.  Combat this instinct with a monetary reward that includes having the new staffers sell.  
4. Incorporate training pay into your compensation plan.  While your new staff is learning, and gaining the confidence to compete for traffic with your veteran staff, give a training salary.  It can take 60 to 90 days for a new employee to complete basic training requirements, and feel like they are on equal footing with the rest of the staff.  Help them financially get to this point.

Hiring new help is expensive, and time consuming.  Make the most of your investment.

Greg Gershman- Managing Partner - Recruitment HQ

The National Auto Dealers Association recently put out its latest statistic on sales turnover, and it is scary!  72% turnover in the sales department of the average dealership.  Figures are similar in other sales industries such as insurance, furniture, jewelry, and financial products.

With an average total replacement cost of $30,000, and a sales floor of 11, an employer can expect to spend $250,000 per year on turnover.  That means dealers spend more on employee replacement than the average dealer makes from their new car department yearly.

The good news is you can raise you retention percentage easily.  The majority of turnover is caused by over-hiring.  Bringing on large numbers of staff at one time without the means to feed them clients, or spend the time to nurture them.

Cure sales turnover, just hire less!

Some people in the HR space tell their clients to hire as many as possible, that each salesperson will bring incremental business.  There are giant holes in this theory.  First when dealers hire 7 to 10 salespeople in one "class" they generally do not retain any more than 1 person long enough to sell anything.  When a dealer hires a large number of new salespeople at once, veteran sales reps leave.  It is very common to see dealers use a staffing company to bring on a large number of reps, and in 60 days actually have the same or less salespeople than when they started hiring.  All the employer does is swap out experienced salespeople for new untrained staff.

Here is how to know the right amount of sales hires:

1. Only hire the number of sales representatives your management can fully train.  View training as a 30 to 60 day program.  Each sales rep needs 1 hour of individual time, and 1 hour of group training daily during that time.  It is impossible to hire 10 sales reps with 3 managers working.  That is an 11 hour per day commitment, and your management needs to have time to attend to the rest of the staff so your store can sell.  Hire around 1 new person per manager available to work with them.
2. Match your staff size to the number of working leads and list of prior clients.  The average sales rep can manage servicing and marketing to 500 leads and active prior clients.  So if my store as a clean data bank of 5,000 prior clients and 1,000 working leads from all sources (showroom, internet, phone) then I can feed 11 sales reps.  They each will have people to contact, and traffic to sell.  Aggressive would be carrying 12 or 13 sales representatives.  Having a staff of 11 working on these numbers and then hiring 8 is guaranteeing I will turnover all the reps I hire.  

Hiring is like eating chocolate cake;  always seems like getting more is better until you eat too much.

H Gregory Gershman - Managing Partner - Recruitment HQ

The National Auto Dealers Association recently put out its latest statistic on sales turnover, and it is scary!  72% turnover in the sales department of the average dealership.  Figures are similar in other sales industries such as insurance, furniture, jewelry, and financial products.

With an average total replacement cost of $30,000, and a sales floor of 11, an employer can expect to spend $250,000 per year on turnover.  That means dealers spend more on employee replacement than the average dealer makes from their new car department yearly.

The good news is you can raise you retention percentage easily.  The majority of turnover is caused by over-hiring.  Bringing on large numbers of staff at one time without the means to feed them clients, or spend the time to nurture them.

Cure sales turnover, just hire less!

Some people in the HR space tell their clients to hire as many as possible, that each salesperson will bring incremental business.  There are giant holes in this theory.  First when dealers hire 7 to 10 salespeople in one "class" they generally do not retain any more than 1 person long enough to sell anything.  When a dealer hires a large number of new salespeople at once, veteran sales reps leave.  It is very common to see dealers use a staffing company to bring on a large number of reps, and in 60 days actually have the same or less salespeople than when they started hiring.  All the employer does is swap out experienced salespeople for new untrained staff.

Here is how to know the right amount of sales hires:

1. Only hire the number of sales representatives your management can fully train.  View training as a 30 to 60 day program.  Each sales rep needs 1 hour of individual time, and 1 hour of group training daily during that time.  It is impossible to hire 10 sales reps with 3 managers working.  That is an 11 hour per day commitment, and your management needs to have time to attend to the rest of the staff so your store can sell.  Hire around 1 new person per manager available to work with them.
2. Match your staff size to the number of working leads and list of prior clients.  The average sales rep can manage servicing and marketing to 500 leads and active prior clients.  So if my store as a clean data bank of 5,000 prior clients and 1,000 working leads from all sources (showroom, internet, phone) then I can feed 11 sales reps.  They each will have people to contact, and traffic to sell.  Aggressive would be carrying 12 or 13 sales representatives.  Having a staff of 11 working on these numbers and then hiring 8 is guaranteeing I will turnover all the reps I hire.  

Hiring is like eating chocolate cake;  always seems like getting more is better until you eat too much.

H Gregory Gershman - Managing Partner - Recruitment HQ

One of the hottest topics in the Automotive Industry is compensation.  What promotes productivity and retention?  

Should it be a Tea Party approach of minimal government and complete free market, which is commission or flat rate only positions coupled with a completely open floor?  Many are advocating a left leaning socialist solution, with salary positions, closed rotating showroom floor traffic management, and managers finalizing all sales.  I think the former is actually the more dangerous of these options.

Don't let your dealership get sucked into becoming a welfare state!  There is a better answer.  It all revolves around a psychological truism for all people.

A person will be productive as long as they feel their energy will receive an acceptable immediate guaranteed return and they have a positive view of success in the future.  

Let's relate that to compensation.  An employee will not show the proper motivation to work without a guarantee of income.  The answer in the Automotive Industry has been a draw to protect a worker, and guarantee they have an earning for the time they work.  Giving an employee a draw does guarantee an income, but it lowers the perception of future success.  What happens when an employee has to take advantage of the draw?  They owe it back against future earnings.  This creates a cycle of poor sales, where an employee feels there is no point to attempting to succeed because they will only owe the employer their future gain anyway.  Here is a case of giving away welfare that creates a negative atmosphere.

There is the other end of the spectrum, giving an almost total salary based plan.  Some dealerships are adopting this, and you can find an article a day on social media claiming Millennials will be attracted to your store if you pay the majority of their income in salary.  This does give the employee a guarantee of pay for giving time.  There is a gigantic hole in the theory!  These primarily salary positions come with a reduction in financial responsibility to the store, most times a manager is both providing traffic and closing the deals.  The future available income is minimal.  You end up with a complacent employee, with no positive outlook on future income, and getting paid more than the employee with the draw to do less.  More welfare, more problems!

It is time for a true work and produce for pay solution.  Give your staff an hourly wage that pays them for what they do besides selling cars.  If your sales staff does nothing else, than you shouldn't have them working at your store!  They should merchandise, market, prospect for sales and service, spend time on product knowledge, and provide customer service to any and all clients that walk through your door.  Pay your staff the going rate in your market for a presentable person to perform those tasks.  If you can hire someone at $11 per hour for this job description then pay your sales staff that.  Don't turn your store into a welfare state, make your staff actually perform the work to get paid.

Now choose either a commission or flat bonus based plan to compensate for sales and follow up.  If you want your sales staff to have the eager edge to sell you need to have a reasonable carrot.  This can be 10% of the gross, or $175 per car.  Provide enough upside that an employee is excited about the future earning prospect.  Again make them earn it.  Have a set of standards that make a payable sale.  Having a salesperson give terrible customer service, never follow up, just happen to be the person on record and still paying them is giving welfare!

The more welfare your business doles out, the lower the production and morale of the staff.  We need to evolve to a compensation model that pays our workers for their time, effort, and production.  You will find engaged hard working employees, and the best talent in your market applying to work at your store.

H Gregory Gershman - Managing Partner - Recruitment HQ

One of the hottest topics in the Automotive Industry is compensation.  What promotes productivity and retention?  

Should it be a Tea Party approach of minimal government and complete free market, which is commission or flat rate only positions coupled with a completely open floor?  Many are advocating a left leaning socialist solution, with salary positions, closed rotating showroom floor traffic management, and managers finalizing all sales.  I think the former is actually the more dangerous of these options.

Don't let your dealership get sucked into becoming a welfare state!  There is a better answer.  It all revolves around a psychological truism for all people.

A person will be productive as long as they feel their energy will receive an acceptable immediate guaranteed return and they have a positive view of success in the future.  

Let's relate that to compensation.  An employee will not show the proper motivation to work without a guarantee of income.  The answer in the Automotive Industry has been a draw to protect a worker, and guarantee they have an earning for the time they work.  Giving an employee a draw does guarantee an income, but it lowers the perception of future success.  What happens when an employee has to take advantage of the draw?  They owe it back against future earnings.  This creates a cycle of poor sales, where an employee feels there is no point to attempting to succeed because they will only owe the employer their future gain anyway.  Here is a case of giving away welfare that creates a negative atmosphere.

There is the other end of the spectrum, giving an almost total salary based plan.  Some dealerships are adopting this, and you can find an article a day on social media claiming Millennials will be attracted to your store if you pay the majority of their income in salary.  This does give the employee a guarantee of pay for giving time.  There is a gigantic hole in the theory!  These primarily salary positions come with a reduction in financial responsibility to the store, most times a manager is both providing traffic and closing the deals.  The future available income is minimal.  You end up with a complacent employee, with no positive outlook on future income, and getting paid more than the employee with the draw to do less.  More welfare, more problems!

It is time for a true work and produce for pay solution.  Give your staff an hourly wage that pays them for what they do besides selling cars.  If your sales staff does nothing else, than you shouldn't have them working at your store!  They should merchandise, market, prospect for sales and service, spend time on product knowledge, and provide customer service to any and all clients that walk through your door.  Pay your staff the going rate in your market for a presentable person to perform those tasks.  If you can hire someone at $11 per hour for this job description then pay your sales staff that.  Don't turn your store into a welfare state, make your staff actually perform the work to get paid.

Now choose either a commission or flat bonus based plan to compensate for sales and follow up.  If you want your sales staff to have the eager edge to sell you need to have a reasonable carrot.  This can be 10% of the gross, or $175 per car.  Provide enough upside that an employee is excited about the future earning prospect.  Again make them earn it.  Have a set of standards that make a payable sale.  Having a salesperson give terrible customer service, never follow up, just happen to be the person on record and still paying them is giving welfare!

The more welfare your business doles out, the lower the production and morale of the staff.  We need to evolve to a compensation model that pays our workers for their time, effort, and production.  You will find engaged hard working employees, and the best talent in your market applying to work at your store.

H Gregory Gershman - Managing Partner - Recruitment HQ

The fastest path to increased sales is to match your sales staff to your clients.  All consumers want to do business with companies that most resemble their community.  A type of neighborhood feeling.

Matching to the community can be having someone on staff that speaks a second language for clients that are more comfortable using a native tongue.  Some dealers in very diverse cities have as many as 40 languages spoken in their showrooms.  Gender and racial diversity can also have a large impact on customer comfort level.  Potential clients that come in to your store may not need to specifically deal with a person of their race or gender, but they feel better about doing business with a company that employs people that are like them.  So a woman coming in to a showroom is fine being helped by a man, but would be more likely to purchase from a dealership that has a representation of women in its showroom floor.

With the obvious benefits of hiring diverse staff, why aren't dealers hiring from different community bases?  The answer is simple, we like candidates that are most like ourselves.  The same principal that makes selling easier with a diverse showroom, makes it harder to hire with diversity.

Here are three ways to break the cycle and get the new blood we need:

1. Use phone interviews to initially screen candidates. Remove appearance bias, by evaluating candidates on communication skills and previous experience first.  Face to face interviews happen after you like everything else.
2. Have standardized interview questions and objective scoring.  Keep interview sessions about the job with preset questions.  It is great to connect with candidates about outside interests after you know everything relating to job performance. For each question have a grading scale.  Numeric grading makes it easy to compare multiple candidates.
3. Every candidate gets a minimum of two interviews from different departments.  The best way to ensure you hiring with an open mind is to have more than one perspective viewing the applicant.  Use at least one person from sales to interview, and then someone from another department such as HR or fixed operations.

Talented diverse candidates are applying for our positions, it is time to start leveling the hiring field and turn up our profits.

Greg Gershman - Managing Partner - Recruitment HQ

The fastest path to increased sales is to match your sales staff to your clients.  All consumers want to do business with companies that most resemble their community.  A type of neighborhood feeling.

Matching to the community can be having someone on staff that speaks a second language for clients that are more comfortable using a native tongue.  Some dealers in very diverse cities have as many as 40 languages spoken in their showrooms.  Gender and racial diversity can also have a large impact on customer comfort level.  Potential clients that come in to your store may not need to specifically deal with a person of their race or gender, but they feel better about doing business with a company that employs people that are like them.  So a woman coming in to a showroom is fine being helped by a man, but would be more likely to purchase from a dealership that has a representation of women in its showroom floor.

With the obvious benefits of hiring diverse staff, why aren't dealers hiring from different community bases?  The answer is simple, we like candidates that are most like ourselves.  The same principal that makes selling easier with a diverse showroom, makes it harder to hire with diversity.

Here are three ways to break the cycle and get the new blood we need:

1. Use phone interviews to initially screen candidates. Remove appearance bias, by evaluating candidates on communication skills and previous experience first.  Face to face interviews happen after you like everything else.
2. Have standardized interview questions and objective scoring.  Keep interview sessions about the job with preset questions.  It is great to connect with candidates about outside interests after you know everything relating to job performance. For each question have a grading scale.  Numeric grading makes it easy to compare multiple candidates.
3. Every candidate gets a minimum of two interviews from different departments.  The best way to ensure you hiring with an open mind is to have more than one perspective viewing the applicant.  Use at least one person from sales to interview, and then someone from another department such as HR or fixed operations.

Talented diverse candidates are applying for our positions, it is time to start leveling the hiring field and turn up our profits.

Greg Gershman - Managing Partner - Recruitment HQ

Here is the daily hiring and getting hired tip:

We get asked a lot about when the best time is to hire.  There is a sweet spot in the year.  The greatest amount of layoffs are done between October 1st and Thanksgiving, and the heaviest volume of employers seeking applicants is just after New Year's.

This means that from Mid-October to Christmas the largest pool of applicants is available, with the least businesses competing for them.  That is the best time of year to search for your new team members.

Here is the daily hiring and getting hired tip:

We get asked a lot about when the best time is to hire.  There is a sweet spot in the year.  The greatest amount of layoffs are done between October 1st and Thanksgiving, and the heaviest volume of employers seeking applicants is just after New Year's.

This means that from Mid-October to Christmas the largest pool of applicants is available, with the least businesses competing for them.  That is the best time of year to search for your new team members.