College Grads Don't Want to Work in a Dealership -- How Can We Change That?

What's the automotive retail industry's greatest challenge? According to several top selling dealers I've talked with recently, the answer is the negative perception the public has about car dealers.

Their concern isn't focused as much on what the customer thinks, but more so on what potential employees think -- or rather, what they don't think. The problem, according to the dealers I've talked to, is that top, qualified individuals graduating from universaties do not consider a career in automotive retail. The ones that do, usually end up working at a vendor, not at a dealership.

What college student today, when asked where they are going to work upon graduation, would be proud to say, "I'm going to work for a car dealership?" Not very many.

We all know why the negative perceptions abound -- much of them well-deserved, unfortunately. And that turns potential employees away. Vendors who insist on running commercials that consistently paint the dealer in a bad light (CarFax, Cars.com a couple of years ago, Edmunds.com's Confession of a Car Salesman article) don't help. As don't the histrionics emanating from consumer advocacy groups such as the Public Citizen, which almost always rely on unbelievably old data.

However, I think the problem is deeper than just some negative perceptions about how dealerships interact with customers. The overall structure of the business itself screams, 'DON'T WORK HERE!" Automotive retail can be a brutal business. A job in sales requires an ability to handle rejection. Long hours, often with boring bouts of inactivity as salespeople wait for "ups," minimal job security and benefits, and no real formalized process to move talented employees into management do not make for an attractive option for top flight graduates.

Other industries have either as tough or tougher hours. Wall Street, lawyers, doctors -- but those professions have been glamourized by Hollywood and the media, while car sales have been painted as an industry for sleazeballs. The industry desperately needs to start thinking and implementing ways to change that cultural perception.

And top dealers are trying. Dealers like Greg Penske of Longo Toyota and Greg Goodwin of the Kuni Automotive Group are focused on it, creating businesses that catch the attention of potential employees. But it's going to take the efforts of more than a few dealers.

Each dealership can start with some easy steps.

Dealership Consultant Mark Rikess, in a recent column in Dealer magazine, offers some intriguing ideas on how to attract today's generation of employees.

Rikess writes: One of the biggest generational challenges facing dealers today is how they can more effectively recruit and market to Gen Y. Due to their sheer size, this group in the very near future will dictate dealership profit and loss as the Traditionalists and Baby Boomers ride off into the sunset. The changes to the sales process, work scheduling and communications will cause the same amount of trauma and change as was dictated by the internet. Some options to consider in your efforts to more effectively recruit include:

Recruiting – A four pronged approach should be implemented to attract quality recruits:

1. A button on your website that gives perspective employees information about what it is like to work there, including training, benefits, and life/work balance.

2. Placards/signage in the customer lounge and showroom floor showing a woman stating that job opportunities are available.

3. Quarterly emails to your customer list stating that job opportunities are available.

4. Postings on craigslist for “customer service reps” with benefits such as training salary, flexible hours, opportunity to work with a great team, etc. Do not mention it is an auto sales job in your posting.

Flexible work schedule – Life/work balance is critical (notice which word they put first). Dealers must determine methods for creating a 40-hour work schedule with at least one weekend off each month. Flexibility can be achieved by staffing according to traffic flow. Our research shows that 70% of sales occur in 30% of the time the sales department is open. By staffing the showroom and prep center according to demand and employing lower cost staff, sales people can sell more cars in fewer hours. Examples of lower cost staff include document processors and delivery coordinators.

Revised pay plan – The traditional pay plan based on gross with random spiffs will not attract quality Gen X and Gen Y sales people who have never sold cars. They would rather be paid $14 per hour to work in sales at a Best Buy or Apple Store rather than take on the financial risk of a straight commission pay plan. Today, typically more than half the new car deals are “minis” and the other half require excellent negotiating skills, a skill lacking in Gen X and Gen Y. Gen Ys in particular do not have the thick skin required for aggressive selling, having typically grown up in a coddled environment where everyone is a winner (ala youth soccer). A pay plan that provides a good training salary, typically $2,500 or more for two months and then provides a combination of salary and compensation per unit sold (not gross) with bonuses works well.

Training – Training and orientation are absolutely critical to retaining Gen X and Gen Y. According to Lancaster and Stillman in their book, “When Generations Collide,” when asked “Have you ever left a job because of lack of training opportunities?” only 3% of Traditionalists responded, “Yes,” compared with 15% of Baby Boomers and 30% of Gen Xers.

Gen Ys want to be part of a team and your training program should recognize that by teaching about other departments. In addition, Gen Ys need more than a basic job description. According to Cam Marston in “Motivating the ‘What’s in it for me?’ Workforc,e” Gen Ys do better when their role is defined -- an overall picture of the job when executed properly and specific responsibilities. Finally, all managers and employees need training on feedback – how to ask for it, how to give it, how to receive it, and what is appropriate behavior.

Rikess' suggestions are just a start. Let's get the ideas flowing and maybe we can start turning this ship.

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Comment by Donald E. Braemer on June 27, 2011 at 11:41am: This info is a good start on the road to change. Here are some of my thoughts,

            Empowerment Without flashback: meaning that you write the guidelines, teach the assocates and support their decisions and re-train when a bad decision happens with a positive aproach.

            Your Mission Statement, Core Values and a listing of WHY WOULD A PERSPECTIVE ASSOCATE WANT TO WORK FOR YOU should have the honest input from your current staff and be suppoeted as your culture as well as advertised and posted threwout your store. LIVE BY THEM!!!

            Pay: Aproximately 60 to 70% of an assocates income should come from a base pay, hourly or gaurentee so they know that they can live on the base and grow on the connissions paid.

            Team building: How about having every assocate work in every department for a given period of time when first hired after their H.R. orentation and then train them to do their job. Why you may ask? Because it breeds a tight nit team of respect and gives them some understanding of the effect they they may have on other members of the team.

               Growth: You must determine what your assocates like doing and where they want to go in life, ask them for a five or ten year plan (What do you like and where are you going)? Then set the training and requirement goals to help them see then can do it. When they reach that point and are ready you will most likely have room for them in a lower level leadership spot, never Management as you can not Manage people you can only LEAD them if they respect you and decide to follow you, you must earn this respect not exspect it. Advertise this openly and make sure you have a plan to follow.

           All of these and many more you may decide to put in place should not be taken lightly because you will loose respect in your area of influance and within your store if you commit to something and not follow threw although you can improve these processes without damage. GET YOUR STAFF INVOLVED MAKE IT THEIR PROGRAM with your final approval.

              Don Braemer President

              D&M Auto Training

              donbraemer@aol.com

              407-402-5924

Comment by Craig Lockerd on June 27, 2011 at 11:01am: Great topic Cliff and I agree with most everything as a partial solution to this issue.Not 100% with you on the pat plan,but giving this generation or any generation some security to start is a very good idea and something we strongly urge dealers to do.

List of things you can't do to attract these potential employees.

1.Same old wording of your help wanted ad{ "Just go ahead and run what we ran last time"}

2.Same placement,one ad in one spot just won't attract what you are seeking,multiple sites,with positive stories,testimonials featuring people "just like them"

3.They arrive at the dealership,"here ,fill out an app,somebody will be with you".......hours later.....

4.Sell me this pen.......Really????

5.They are "hired"....now 3 weeks later when HR is finished 75% of who you thought was "hired" have taken other jobs.

6."Training"....Here,watch these tapes,etc...trail 6 car Sam and on and on.

We need to find out the salespersons "Why"...what they really want,and why that why is a must rather than a should.

Comment by Ricardo Rondinelli on June 27, 2011 at 10:53am: You are right Cliff, the perception of the car dealer is negative. As an automotive recruiter/trainer in Puerto Rico I found out that most sale people and graduates don't want to work in auto sales until they are explained how the pay plan works. Salary, commissions, incentives, spiffs, fringe benefits, etc. Ongoing training, advancement and flexible work schedule is a must. .

Comment by Joe Clementi on June 27, 2011 at 10:50am: Excellent post Cliff. I have been talking about this issue for decades. It's the same situation in showrooms everywhere. There is very little educated "talent" in showrooms and that needs to change. Flexible hours, rotating shifts, change in pay-plans and structured training programs are topics that need to be addressed. The reality is that, our pool of professionals is shrinking every day and the new generation is uninterested in joining the ranks. This is a great post and I'm going to share it with the groups that I've been talking with as well. Thanks for the share.

Comment by Sharon Hill on June 27, 2011 at 10:46am: oops, forgot to add - BLOG your openings. You do have a blog, right? Let some of your newest, youngest , and female employees blog and social network about their place of employment. Assuming, of course, they'll have good things to say.

Comment by Sharon Hill on June 27, 2011 at 10:43am: Excellent ideas here, and while I've never been in auto sales, I've worked in auto advertising for many many years, and in recruitment advertising as well. My only objection to the advice above is the idea of advertising the position as customer service. That's a big no-no, and in fact, most reputable media would deny you the ad if they knew that you were being deceptive. I think someone who took the time to apply and come to an interview for a customer service job to find out that it was auto sales would be angry and would share that anger. Nowadays it's not just about sharing with your friends. It's about sharing with your online social friends, and they can run into the thousands. That's the kind of publicity you DON'T need.

What you haven't suggested - and I do - is an "It's not your father's auto sales job anymore" approach. Focus on the new exciting tools you now use to communicate with prospects and generate leads. Talk about your Internet sales department, your live chat, your digital tools and vendors, etc. Say "This is an opportunity to put to good use not only your top-notch sales skills (or the top-notch sales skills we'll teach you" but also the social networking and digital communication gadgets and processes you know so much about. Perhaps even a "How many companies actually INVITE you to get on Facebook at your job?

Comment by Keith Shetterly on June 27, 2011 at 10:42am: 100% agree with the points about hours and pay. I think one of the problems is that not enough people in decision-making spots in this industry have ever worked in another demanding vertical. I have. We keep averaging poor salespeople because we keep averaging killer work weeks and commission-only. And every Saturday, which is not Gen X or Gen Y. It's not the pool we pull from, however, it's the job description--change that, and you'll get better candidates.

Comment by Carol A. Meissner on June 27, 2011 at 10:30am: All good points. But have you considered if you are recruiting at the wrong schools? There are programs out there targeted for students who want to work in the automotive industry...