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4 strategies to grow in today's automotive industry

Sam D'Arc, November 30, 2015

Successful automotive mega dealers today are capitalizing on a middle-skills deficit by creating their own well-trained, engaged and competitive Millennial workforce. These are just four strategies that can help mega dealers build and maintain their business.

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Changing the culture of your auto dealership 

The franchised automotive industry is humming at the close of 2015. Annual production of vehicles, known as SAR, is at its highest level since before the recession. Additionally, fewer franchised rooftops are selling more units per store than at any time in history. Large mega dealers, sensing opportunity, are utilizing cash reserves to buy up single-point stores before news of their availability ever hits the marketplace.

So, all is well as this key-indicator of economic health grows and expands, right? Yes and no. Mega auto dealers tell me their most significant obstacle to expansion is a qualified, trained and engaged workforce. When you add that to the challenge of consistency across multiple geographically distant locations in a competitive service-oriented retail industry and the obstacles for profitable performance through rapid growth, then you need a strategy.

David, a 25 year old graduate of USC's business school is educationally overqualified to sell cars and, due to stigma, is equally uncomfortable making the auto industry a lifetime pursuit. David belongs to the Millennial Generation—one often defined by technology, a tumultuous economy and the first generation to grow up in the September 11th era. David is also part of what USA Today predicts will be a 2.5 million "middle-skill" job boom over the next two years. Middle-skills are needed because these positions require additional job training, but not necessarily a traditional college degree.

David decided to enter the auto industry following a multi-month job search that yielded little results in his field of study. Common to other Millennials, this is David’s first real job and not only does he require industry-specific training, but David is also unaccustomed to the rigors of a competitive retail sales position. Studies reveal many like David survive initial onboarding, but leave shortly thereafter frustrated at the skills and aptitude gap.

How can large and growing organizations employ and engage employees like David to expand their businesses?

Strategy #1: Create an internal training and development academy

Mega auto dealer groups are creating their own internal training academies to fill the skills gap. One such group, the Zeigler Auto Group of Kalamazoo, Michigan, has partnered with Zurich North America to provide trainers and training subject matter for the finance and insurance department portions of their internal academy. The group was recently recognized by Automotive News as having one of the largest year-over-year profit increases. Aaron Zeigler, President of Zeigler Auto Group, cites new facilities and his Zeigler Dealership Academy as keys to that increase. For those groups or single-point dealerships unable to support such a large training initiative, dealers can partner with industry-specific trainers such as Zurich to meet training needs.

Strategy #2: Trash the mission statement for a company culture

Decades ago, companies focused on a well-crafted mission statement to attract customers and align employee actions. Today, Millennials seem less engaged by neatly framed statements and more by activities that imbed their lives with meaning. Simon Sinek—of TED Talk—states, “People don't buy what you do; they buy why you do it.” Successful businesses have convened groups of employees to answer that “why we do what we do” question. Often, the answer lies in supporting charitable causes such as the Make-A-Wish Foundation or United Way. By their engagement, many employees demonstrate a strong “why we do,” which can often trump compensation in motivating a qualified workforce. As employees answer “why,” they become passionate, conveying that conviction to customers who similarly make decisions based on a shared sense of purpose.

Strategy #3: Replace the annual performance review with an individual development plan

Once trained and armed with a sense of purpose and meaning, today’s workforce values direction and a shared roadmap into the future. Chart this path individually to help retain employee's attention and keep them on task. Performance reviews critically focus on the past. Development plans focus on the future and what can be accomplished with hard work over time.

Strategy #4: Keep employee compensation current

Poorly constructed or outdated pay plans can ruin good and even mediocre employees. Pay plans should read like a well written job description and should be regularly updated to reflect changing market conditions. Otherwise, plans can overpay for poor production or demotivate by underpaying in challenging conditions. Industry benchmarks provide a good starting point for target pay based on similar roles and positions.

Successful automotive mega dealers today are capitalizing on a middle-skills deficit by creating their own well-trained, engaged and competitive Millennial workforce. These are just four strategies that can help mega dealers build and maintain their business.