Navigating HR Challenges in Auto Dealerships

Kate Conroy
December 21, 2023

No business is without its challenges and an auto dealership is no exception! Luckily most challenges can be overcome with strategic HR.  As an auto dealer, you can overcome challenges at your dealership with HR support to set you up for long-term success.

Top Five HR Challenges Faced by Auto Dealerships and How to Overcome Them

Running an auto dealership may feel like you are always on the brink of a breakdown. What are the check engine lights that signal a problem and what can you do to tune up your dealership?

1. Recruiting Top-Talent 

Recruiting has always been a challenging process, but in recent years it has become increasingly challenging to find and hire the right talent. The talent pool seems smaller and more competitive than ever before. Often it seems impossible to determine if someone has the right knowledge, skills, and work ethic just from an interview. 

A strategic recruiting process is the answer to these challenges. Implementing a strategic recruiting process starts with reviewing the job description, ensuring it reflects the needs of the organization and clearly communicates to candidates what you are looking for. Next, we make sure we are looking in the right spot for candidates. This includes targeting the right job boards and marketing the posting in digital and physical locations where we can expect qualified applicants will see it. 

Once a pool of qualified candidates has been identified, we need to determine what their abilities are to meet the needs we have outlined in the job description. We approach this through a behavioral interviewing strategy, asking candidates to give us real-life examples of their past experiences in ways that speak to the skills needed for the job opening. 

2. High Turnover 

Does it feel like your business is a revolving door? If so, you have a turnover problem. High employee turnover is costly in respect to the time you have invested in recruiting candidates, and onboarding and training your new hires. 

However, you hate to watch your investment walk out the door. You can never force an employee to stay, but with strategic retention strategies in place, you increase the likelihood that your employees will have longer tenures. Retention starts with a well-thought and intentional onboarding process to ensure that the new hire is set up for success. Past the onboarding process, it is essential for your team to have a line of sight to see what the future at your dealership will look like. Have regular conversations with your team members about their development and what they would like to grow into. This will ensure your team sees a future within your organization.

3. “Sales” Mentality 

The automotive industry has a reputation for unethical sales practices, like Harry Wormwood putting sawdust in an engine to make a car run….long enough to sell it. This reputation is harmful to your business! It will drive away new customers and one bad experience can break even the most loyal customers. 

How can you ensure that your team is consistently treating your customers with integrity and not just trying to get a sale across the line?  Compensation is key in motivating the right behaviors that you want to see on your team. Be sure that your incentive compensation program, including commission, is structured strategically to motivate the behaviors that you want to be known for in your community and among sales professionals in your industry. 

4. Multiple People are Faces of the Organization

Do your customers have a different customer experience depending on who is on that day? If your answer is yes, then this is likely damaging your reputation and employer branding in the marketplace. People like to know what they can expect. This includes the tone that they are treated with, the process they experience, and the timeline in which they receive results. 

What can you do to make sure your customers have a consistent experience? Create processes and expectations and communicate them to your team. For best results, create these processes in collaboration with the people who actually manage them. This ensures the processes are comprehensive and the expectations you create for your team are achievable. After the processes are created and communicated, hold your team accountable to them by letting them know that it is the standard by which you’ll evaluate their performance

5. No Strategic HR Plans 

What does the future of your business look like? Do you feel like you are stuck in a hamster wheel, running but not going anywhere? If you feel like this, your employees probably do too and you need to start strategically thinking about your HR Plans!

What is a strategic HR Plan? It starts with setting goals for your business and focuses on the elements needed to get there comprehensive of every element of the employee lifecycle, including planning for exits, hiring and onboarding goals, performance metrics, and compensation structures. With a strategic HR plan in place, you are not moving forward towards business goals alone, rather your entire team will be working together to move your business forward. 

When is it Time to Hire an HR Consultant For Your Auto Dealership? 

If the above challenges resonate with you and you’re wondering what a change could mean for your bottom line, it’s time to consider hiring an HR Consultant for your dealership. An HR Consultant works directly with you to build strategic processes to meet the needs of your dealership. If you think an HR Consultant might be the right fit for your business, contact us to get in touch with the experienced Consultants at Red Clover.

Photo by Pixabay

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