Sensing a Cold? Take Your Employees’ Temperatures With These Tips for Preventing Turnover
- 52% of Millennials in dealerships could end up leaving.
- How you could prevent unsustainably high turnover rates.
One challenge facing automotive retailers that has proven to be a very tough nut to crack is high turnover rates among 20-and-30-something Generation Y’ers (a.k.a. Millennials).
By some estimates that number has peaked as high as 52 percent in recent years, meaning more than half of dealership hires in this demographic could end up leaving. The numbers among Generation X’ers and Baby Boomers aren’t as eye-poppingly bad, but they aren’t great, either.
Dealers face a tougher time adjusting to the expectations of this generation of workers compared to their predecessors, because several factors – universal access to the internet, the rise of mobile technology, and the Great Recession – have combined to make Millennials’ experience growing up fundamentally different than their parents’ experience.
How do you meet those expectations now and stop the exodus of young workers from your dealership? With cold season drawing near, let’s look at some ways you can take your employees’ temperatures – and prevent unsustainably high turnover rates.
How secure are they in your pay structure?
Commission-based pay for sales associates is a long-running staple of automotive retailing that, in the eyes of most Millennials, ought to go the way of the dinosaur.
Millennials, by and large, came of age during the Great Recession, and are an incredibly risk-averse demographic when it comes to all things financial – including, of course, their sources of income.
To a Baby Boomer or Gen X’er, a commission-based pay structure may sound like an enticing opportunity as long as you’re willing to put in the work. To a Millennial, it sounds like week-to-week uncertainty when what they’re after is stability. Small wonder so many leave when, after 18 or 24 months, they aren’t realizing those imagined financial benefits and there’s an hourly position across the street offering a guaranteed level of income.
Of course, the challenge facing dealers is that an individual who gets paid a salary will not necessarily have a good financial incentive to go “above and beyond” if the extra income potential is removed. To remedy this and still satisfy Millennials’ desire for security, consider moving away from the traditional commission-based structures and instead provide some hybrid of a base salary with competitive performance bonus incentives.
Are they satisfied with work-life balance?
Even as recently as 10 years ago, anyone bringing up the concept of a good work-life balance in this industry could expect a dismissive eye-roll. Selling cars is for hard-charging, 60-plus hour workweek, Type A people.
Millennials know this is how it’s always been – and they don’t care. This is a generation that’s been hardwired to value fulfilling life experiences above a six-figure salary, so the idea of giving up the better part of their lives to sell cars in pursuit of a big financial payout doesn’t hold much allure.
A 40-hour workweek shouldn’t equate to a minimum wage living if you expect to keep Millennial sales associates, and you’ll want to take additional steps to fight burnout. Possibilities include:
- Amenities such as on-site childcare or gym membership.
- Flexible work arrangements where possible.
- Generous vacation and maternity/paternity leave offerings.
Most of all be transparent and proactive about checking with your employees on their needs. By ensuring their workers experience a good work-life balance, dealers can not only retain young talent, but also enhance employee engagement and performance.
Do they see your dealership as technologically advanced?
Finally, it goes without saying Millennials, more so than any preceding generation, are continuously plugged into the newest technology trends. Outdated, laborious, and redundant work processes are a sure way to nudge your younger workers toward the door.
Step back and take in the macro view of your dealership. Would a tech-savvy generation consider it superior when it comes to technology? If not, consider how you could:
- Invest to automate and digitize certain processes to promote efficiency.
- Leverage digital presentation, mobile, and interactive technologies to empower your employees and equip them to wow customers.
- Partner with experienced consultants to give your employees access to valuable industry knowledge, training, and professional development opportunities they won’t easily find elsewhere.
If you want to present your dealership as a desirable place for young workers to spend their time and energy, it’s worth investing to truly stand out from your competition.
How to make it work.
By now, the biggest challenge to implementing all of these changes and preventing out-of-control turnover in your dealership should be obvious: You’re being asked to invest and pay more for less work in a time of ever-shrinking profits.
Taken alone, that proposition probably strikes most dealers as a non-starter. And, if you don’t take additional steps in other areas of the dealership to balance your finances, it probably is.
Balancing these proposed increases in pay and benefits with both new sources of profit and cost-cutting measures in other areas of the dealership is the only way this approach will prove sustainable.
I mentioned new profit centers as well. Whether you’re leveraging mobile devices to increase effectiveness on the sales floor, utilizing digital presentation software to jump-start accessories sales, or employing interactive technology to revamp the F&I experience, the tools and services exist to open up revenue streams in parts of your dealership you may not have thought possible.
The dealership that can sustainably draw and keep today’s young workforce is one that commits to an entirely new vision of what the dealership can be. A focus on efficiency and rooting out new profit centers will get you there.