If there’s one thing we learned from our automotive customers this past year, it’s this: employing product specialists vastly improves customer experience and loyalty, as well as lowers dealership employee turnover.

More and more dealerships are beginning to adopt this sales model. Why? The traditional “road to the sale” approach isn’t working anymore. Customers are more educated on the vehicles they’re shopping for and therefore don’t want a sales pitch when they come to the dealership. Instead, they prefer to utilize their own research to help speed up the buying process—purchasing their preferred vehicle quickly.

The transition from the traditional entry-level sales position to product specialists allowed our customers to thrust life into their stores. When executed the right way, employing product specialists is a win-win for everyone. The dealership develops their customer satisfaction. The new employee gains an appealing job with a clear career path. And the customers receive better service that motivates them to deliver more referrals to the dealership.

If your dealership has yet to switch over to the product specialist model for your sales team, here are the five benefits you may want to consider:

The 5 Pros

1) Increase Customer Service & Loyalty—The product specialist position allows the customer to shop at their own pace and still have access to additional information, such as vehicle technology or anything else he or she might want to know. This lets the customer build a healthy relationship with the specialists, since they don’t feel like a sale is being shoved in their faces. Plus, when happy customers leave the lot in their new cars, they’re more prone to refer your dealership to their friends and family.

2) Attract Millennial Talent—Now the largest chunk of the US workforce, millennials are ideal for product specialist positions. According to a recent industry article, the pay plan for product specialist positions attracts Gen Y job seekers: “The pay structure (for product specialists) also helps the dealership attract recent college graduates to its sales team, which it rarely did before its new structure.” Also, due to the ever-changing technology in new vehicles, millennials are easily able to adapt and become educated on these advanced vehicles.

3) Develop Sales Team—As the traditional sales model continues to become outdated, more dealerships are going to have to somehow mend the demand of a new sales approach from today’s customers. Under the product specialist model, here’s the basic hierarchy of the sales team according to Automotive News: the specialist works under a team lead or sales manager, who then takes the “handoff” as soon as a customer makes a decision on what car they want to buy. This model is not only proven to work, but also attracts more talent. Today’s job seekers aren’t looking for an entry-level sales position at dealerships. However, a product specialist position that offers an annual salary and a well-defined career path is something any recent college grad can gravitate towards. Overall, this model gets better talent into your dealership, developing your sales team.

4) Lower Turnover—Michael Marlin, Director of Training at Ray Skillman Auto Group, can attest to how employing product specialists helps lower turnover. As Automotive News reported:

It certainly helped improve Skillman's employee turnover rates in the sales department, one of the most vexing personnel problems in automotive retail. The average turnover at U.S. dealerships among salespeople was 72 percent, according to a 2015 National Automobile Dealers Association study. At Skillman, sales turnover is less than 20 percent, Marlin said, down from more than 50 percent before the new model was adopted.

5) Boost Sales—Customers have an appetite for the changing sales culture that’s striking the auto industry. As technology continues to advance and become adopted at dealerships, customers are going to be drawn towards any tech that can help improve their customer experience. This includes a faster turnaround time—from the time the customers enter the lot to when they purchase the vehicle. By employing product specialists, customers save time by talking directly with the sales manager when they’re ready to make a purchase (cutting out the middleman and wasted time). Therefore, by boosting customer service, you also hike up your sales.

These benefits are just the tip of the iceberg when it comes to employing product specialists are your dealership. To get more insight on transitioning to product specialists at your dealership, click here.

Each year, retail auto dealers spend more than $512 million to hire new people. But is that money being invested wisely? A new Hireology and DrivingSales HR Practices survey reveals that the hiring process is broken. According to the survey, dealers are wrestling with major challenges in their hiring practices, including the quality of their hires. No wonder: the survey also shows that dealers are not giving hiring managers any consistent tools and processes to work with. As a result, auto dealers are wasting money (on average, thousands of dollars for each hire) and suffering from turnover in crucial functions, such as sales.

The solution to the broken hiring process is to replace gut decisions with tools and processes that make hiring more predictable and accountable. Given the enormous cost of hiring and developing talent, hiring better people is the biggest challenge retail automotive dealers are not addressing -- and need to do so now.

Who Was Surveyed

To uncover the hiring practices of retail automotive dealers, Hireology partnered with DrivingSales, a leading resource for automotive dealership professionals, to sponsor an industry survey. DrivingSales surveyed 80 retail automotive dealer groups, ranging in size from small to large, and representing more than 200 rooftops. 80 percent of survey respondents were owners or general managers of their store.

Ultimately, Hireology and DrivingSales wanted to understand the current state of hiring in the retail automotive industry: how it’s being done, who makes the decisions, and whether or not dealers are succeeding in building high-performance teams.

What Was Found

The survey uncovered a number of challenges:

• The hiring process is broken. All dealers, regardless of size, report major challenges in their hiring process. Most everyone surveyed said that every aspect of the hiring process is either a challenge or a major challenge, with the most acute problem being quality of candidates
• Employee turnover is hurting dealers. Dealers also report an employee turnover problem. A large majority of dealers see turnover in all customer-facing roles as having a major impact on their operations, with the impact highest in sales, service management, and service advisor positions.
• Too many dealers lack consistent tools and procedure to hire better people. The study reveals that the hiring process is characterized by an inconsistent use of tools and procedures such as background checks that should be used to vet the right hires. Applicant tracking is the most widely adopted technology but used by only one in five dealers. Less than one in 10 use more advanced HR planning solutions.
• Hiring managers lack oversight and support. Dealers told DrivingSales that executives are not providing adequate oversight and support for hiring managers. Only 20 percent of respondents said that they provide hiring managers guides and templates for candidate evaluation.

Retail dealers that lack a systematic approach to hiring pay a price. Dealers that leave hiring up to a manager's discretion suffer from higher turnover rates than dealers that require managers to follow a consistent, structured hiring process (refer to the graph on the right). 

These findings come at a time when it has never been more important for retail automotive dealers to hire better people. Historically low unemployment rates, changing skill requirements and a changing workforce are all factors converging to make it more difficult for dealers to find the right talent. And the mistakes for choosing the wrong candidate are costly: hiring the wrong manager can put a dealer behind by six months, and the cost of replacing a bad hire is between 3x and 10x compensation.

The hiring challenge is not going to go away, either. According to a recent Kelly Global Workforce study, the auto industry as a whole will grapple with a skills shortage that will worsen over the next 10-to-15 years.

What Dealers Need to Do

The mandate for retail automotive dealers is clear: take hiring seriously by adopting the right tools and processes.

Bottom line: dealers must take charge of the hiring challenge by taking control of the hiring process. Dealers that hire better people will beat their competitors and create happy customers.

To read the survey in full, click here.

Whether you want to accept it or not, the next wave of talent in today’s workforce are the millennials. According to a recent article published by Automotive News, “The percentage of millennials working in dealerships rose to 31 percent from 27 percent a year earlier. Close to half of all new dealership hires in 2014 were millennials.”

While Gen Y continues to have a growing presence within the retail automotive workforce, dealerships are having a hard time retaining them.

“In 2014, the annualized turnover rate in the average car dealership’s sales department was 72 percent, an increase of six percentage points from a year earlier,” says Automotive News.

So this group of young employees is the growing workforce at dealerships, yet rooftops are having trouble keeping them. Therefore, it’s critical to think about how millennials view your dealership as an employer and how you might be able to make that perception better. 

Sometimes the best way combat turnover is with better hiring. If you hire the right people (those who truly want to work at your business and have the right skillset), then you’re more likely to retain them for a much longer time.

Getting to Know Your Gen Y Workers

According to the 2016 Deloitte Millennial Survey (a study which covers responses from nearly 8,000 millennials across the globe), here are some recent findings on how millennials think and behave in today’s workforce:

They want more responsibility:

• “Supporting leadership ambitions builds loyalty (yes really!)”
• “Being held accountable doesn’t reduce loyalty or satisfaction.”
• “Strong sense of purpose, inclusiveness, and open communications are higher where employees intend to stay longer.”
• “Three-quarters of millennials are confident and feel in control of their career paths.”
• “Those who feel in control appear to be a little more loyal.”

They care about their work:

• “The values that support long-term business success are people treatment, ethics, and customer focus.”
• “Personal values have the greatest influence on Millennials’ decision making.”
• “Millennials would prioritize the sense of purpose around people rather than growth or profit maximization.”
• “Millennials with a mentor are receiving good advice and feel somebody is interested in their professional development.”

They care about the work/life balance:

• “Pay and financial benefits drive Millennials’ choice of organization more than anything else.”
• “In most markets, work/life balance comes before career progression when evaluating job opportunities.”
• “Millennials would like more opportunities to work remotely—and think it will boost productivity.”

How to Keep Your Millennial Workers

It’s simple: if you want to retain your millennial talent before they head out the door for the next best offer, you have to learn how to work with them; not against them. Looking at this generation of employees as disposable talent will slowly hurt your business, (in many different areas) with one being the cost of turnover.

Here are some ways for business leaders can help keep millennials from leaving their company:

• Provide a unique work culture that reflects millennial preferences
• Let them know their work means something; show them purpose
• Provide a flexible work-schedule that allows time for work/life balance
• Offer stability via salary and benefits
• Encourage individuality within a team environment
• Give recognition when it’s due
• Offer encouragement and mentorship, as opposed to giving orders and managing directly upfront

Are you still looking to attract the right millennial talent to your dealership? Discover how you can refresh your career site and begin building a better team by clicking here. 

Have you ever seen an old picture or video of yourself from back in the day? One where you’re wearing some ridiculous outfit and then try to justify it by saying something like, “well, it was the ‘80s!” Unless you’re still going for that look from several decades ago, then you know the importance of making changes.

Old habits die-hard, yet they do eventually go away and it’s usually for the best. When innovation flourishes, whether it’s through pop-culture or industrial progress, it’s good to know when to make a change for yourself, especially if you’re a business owner. 

Retail automotive operations are changing and it’s time to take notice for the sake of your own auto dealership. If you haven’t took the initiative to bring your dealership into the modern era of business models, here are three key indicators that it might be time for you to do so:

3 Key Indicators

1.) Technology Is Coming To Automotive Retail

More and more companies are investing in technology businesses entering the auto industry. According to a recent TechCrunch article, “There have been 33 major equity transactions and investments worth $35 billion in automotive retail over the last 18 months.” The same article goes on to mention that “…the influx of outside capital is a big game changer for an industry that has been more akin to moving at a slow pace but must start gearing up for the inevitable havoc that mobile, social, and big data technologies inevitably bring to established business models.”

2.) Demographics Are Changing

This goes for both dealership customers and employees. TechCrunch says that “Millennials have spearheaded disruption in the automotive industry with a major focus on pricing transparency, a preference for the ease of digital transactions, and the fundamental expectation that their car should simply be an extension of their “always on” mobile lifestyles.”

Hireology has found that in 2014, 48% of all new hires were Gen Y employees. The millennials now make up 29% of the average dealership workforce—an increase of 6% compared to 2012.

3.) The Traditional Dealership Model Is Dying

Many dealerships are now recognizing the importance and need for updating their operations. TechCrunch predicts, “…that by 2025 the dealership model as it exists today does not exist. It has instead morphed into positions within the Digital Marketplace and/or Mobility Service Providers roles.” The technology news source goes on to suggest that dealerships must “…position themselves for future success, dealerships need to understand hot technology disruptions are impacting their business environment, embrace the digital revolution in their customer relationship and back office data management processes, and hone their digital marketing chops to remain relevant.”

“They also need to think hard about the type of skill sets the dealership will need going forward that can provide, nurture, and retain the connected consumer for life across all of their automotive mobility needs.”

What To Do

For starters, get the right people on board at your location. High turnover is a well-known issue for the auto industry. Here’s what Hireology has identified has crucial problems facing dealerships and staff:

• People are the number one cost for dealerships
• 75% of dealers report having trouble with hiring
• Hiring the wrong manager can put a dealership behind 6 months
• The cost of replacing a bad hire is between 3 and 10x compensation

Not sure what else to do? Here are some tips from automotive experts on how to build a better team at your dealership.