OUR NEW CHALLENGE, THE EMPLOYMENT PARADIGM
When I take on a new client, during the initial interview process with the owner or the general manager, one of the questions that I ask is “Where does it hurt the most in your business right now?” Within the past two years and increasingly one of the most common answers is “employee loyalty and turnover”.
We addressed this issue once before in our January newsletter. However as time goes by it seems to become a bigger problem since most people pay very little attention to the root causes. In the next three years millennials will make up 65% of the consumers and the work force in the United States. I have four millennial children and I personally have difficulty in understanding them at a parental level let alone as employees. The challenge is of course we do not pay attention and or understand what makes them tick and what actually turns them off. The turnover rate among sales staff of car dealers have risen to 71.9% in 2015; compared to a 42% private sector national average. One year retention rate was 60% and three year came in at 32.8%. Expect this to get worse in the next few years as millennial work force continue to increase in numbers.
If we understand fundamentally the common denominator values that these people have, it is easier to see what is not working.
1– Millennials take quality over quantity. They are not interested in working six days a week even if it means more money in their pocket
2- They like to become a part of the team, their voices heard, opinions respected and considered
3- They like to live a purposeful life, and feel important about their contributions to their purpose
4- They will go the extra mile to prove their point and they are compassionate about righteousness
5- They not only want to know about their job specifics but also the big picture goals and objectives of the organization that they work for and contribute to it
6- They don’t like being kept in the dark like a mushroom
7- While money is still important, they prefer stable income over rewards that are attached to over achievements
8- They don’t like to be talked down upon and oppression
9- They want to feel equal and comfortable around their supervisors and managers
10- Their work attire is definitely much more relaxed with tennis shoes, un tucked shirts and hoodies.
Now let’s see how all this fits in our conventional automotive retail management styles.
1- Average sales person works 45 hours a week and takes only one full weekend off in a month
2- A typical sales manager would only tell a sales person what they think they should know and nothing more. When asked the question regarding interest rates, money factors, selling price, invoice and rebates, they just tell them “not to worry about those things and just sell the car”
3- Managers take almost no interest in their staff’s personal lives, their interests, likes or dislikes
4- When and if there is a difference of opinion, they hardly ever respect or listen to what the sales person’s point might be
5- In sales meetings you won’t hear managers talk about the “Big picture”, “company goals and objectives”, “what their contribution to achieve the goal is”, “past performance results”, rewarding those who contribute to the common cause” etc.
6- Our pay plans are still largely driven by commissions and particularly as a % of gross profit when the margins have been decreased significantly and replaced with “margin bonuses” by most manufacturers and it is not a part of gross profit. There still is no salary component to most sales person compensation plans
7- Most sales managers today are of the school who will scold, insult and intimidate sales people and discourage them to even be able to ask intelligent questions when negotiating with a customer. Terminologies such as “do you have a commitment?”, “do you have a credit application?”, “Can’t tell you how much the trade is worth” are commonly used as a sales strategy which fails almost every time when dealing with today’s millennial consumer
8- Most sales managers would fire a sales person if they get into a heated discussion with them just because they want to get their point of view across
9- Managers will typically and deliberately not provide any more information than what they believe is necessary and help them gain skills and expertise
10- Most of the sales staff in a car dealership today are either required to work in a shirt and tie or wear a company branded polo shirts as work attire.
Going forward the growth is not going to come from how good the product is, how convenient the location is, how effective the advertising is or even how good the price is, it will however largely be influenced by how good your sales force is and how they interact with managers and customers. We must all remember that after all is said and done selling is just an art of building relationships.
Good to talk to you, stay happy and healthy.