Now is the time to pay more attention to retention

2023 is underway and dealerships are busy crunching the numbers. While normal key performance indicators are under scrutiny, it is more important than ever to evaluate the most critical component of your dealership’s success: retention.

Where do you start? The top priority should be evaluating employee retention. It isn’t as simple as asking your staff for feedback. You need a trusted partner to help evaluate employee perception and assist in crafting a measurable strategy. At Quantum5, we have the expertise and suite of performance strategies to help your dealership get started.

It all starts with understanding the data. We have surveyed over 100,000 dealerships over the past three years on retention, and the effect of keeping your customers and staff members happy, with some staggering results. After compiling the data, we have found that if dealerships keep their staff members retained for more than three years, it equates to an additional $775 in monthly gross profit per employee at each dealership. If you have roughly 70 employees, this equates to a staggering $650,000 in gross profit per store annually. The moral of the story? It pays (literally) to keep your team happy.

As we speak with more dealership managers and teams, the question continues to be, “how do we do that?” How do we not only hire, but keep, top talent? Here are some of our top suggestions to begin focusing on in 2023.

Finding Talent

There are many variables that contribute to the success of a dealership. With success also comes variables that are out of the dealership’s control, like parts availability or inventory challenges. To minimize the disruption of the variables you can’t control, you must be intentional about the variables you can. Hiring the right talent is a great place to start.

Posting a “Help Wanted” ad is not enough to ensure you’re finding the right talent for your dealership. You also must ensure you’re attracting the right people for your customers. Does your organization provide growth roadmaps to help your employees navigate what the next step is in their career journey? Is employee onboarding putting your best foot forward, or is it lacking?

The potential for job-hopping has been a variable for most dealerships when they consider a potential employee’s resume. To limit the likelihood of history repeating itself, we need to understand the motivation of why someone might be looking for the next opportunity. While job-hopping might be fulfilling for workers as they seek higher compensation, more training, and greener pastures, it is costly for businesses. With every hire, a dealership faces recruiting costs, onboarding costs, training costs, lost productivity, disruption, and a potential drop in employee morale if an employee leaves. As our retention data illustrates, dealerships can no longer afford to lose a three-year, six-year, or ten-year employee to another opportunity (or potentially your competition). Having the right talent leave your company prematurely not only sabotages your current profit, but future profits as well.

Keeping Talent

So, how can you keep employees long-term? It all starts with data. Gather data to truly understand their wants and expectations, create opportunities for their professional growth, and foster a culture that puts people first.

Once you understand their wants and expectations, it is time to understand perception. Gather data about employee satisfaction to understand what will keep your employees on board. Measuring the Net Promoter Score (NPS) helps your dealership diagnose the health of your culture. When someone on your team wants a bigger role, are you willing to give that person a chance? When team members need to acquire new skills to advance their careers, are you giving them training to develop future growth?

Retention doesn’t happen on its own. Ultimately, you must create a culture that tells employees they are needed and are the key to your success. It might be fun to treat employees to pizza or hold a barbeque for them in the parking lot, but that’s not what really matters long-term to employees.

What matters is knowing what matters most to them. For instance, it doesn’t cost anything to congratulate a staff member because he or she has a daughter graduating next month. But it shows that you know what is going on at home and that you care.

The Final Word

In our current business world, where job-hopping is normal and employees expect more from their job than just a competitive wage or standard benefits package, retaining good employees is critical.

In fact, it just might be worth $650,000 per dealership, per year.

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