Save $50k Per Year by Holding onto One Good Employee
In the automotive industry, like any other, replacing good staff is a problem.
The 2017 NADA Workforce Study indicates the total employee turnover in dealerships increased year over year by 3 points to 43 percent. That means more than 4 in 10 staff at a dealership will need to be replaced every year.
That’s a staggering statistic.
Obviously, some employees move on for good reason, whether the position isn’t a good fit or life circumstances change. But when someone leaves, it costs much, much more than just the price of taking out ad space in the classifieds or hiring a headhunter.
Think of the cumulative costs:
• According to a Bersin by Deloitte study in 2014, the average talent acquisition costs are $4,000 per employee. What’s more, it takes 52 days on average to fill a vacant position.
• It varies by position, but training costs can easily accelerate to $5,000 between DMS training, ASE training, or sales productivity training sessions.
• The largest cost of turnover is in deferred productivity. It takes most new hires a minimum of six months to reach their potential. That can mean burning through ups or losing sales in the showroom, or missing out on upsells and losing long-term customers in the service drive. That’s easily $40,000 per new employee in unrealized income.
• Some new hires just don’t work out, so it’s back to the start to find someone new.
Retaining a good employee makes business sense. Keeping productive staff not only avoids the frustrating and time-consuming hiring process – it saves up to $50K per year per position! Here are a few tips:
- Be a leader, not a manager. Spend time working beside employees to coach and develop their skills. It also gives an opportunity to discover the support they need to move forward in their career.
- Be active in the hiring process. Check references and hire based on personality rather than skill. Skills can be taught while personality often can’t be modified.
- Emphasize employee morale. Keeping staff satisfied and growing personally and professionally prevents them from looking for greener pastures.
https://www.nada.org/workforcestudy/
The documents posted on this Website contain external links or pointers to information created and maintained by other public and private organizations. These links and pointers are provided for the user’s convenience. Center for Performance Improvement does not control or guarantee the accuracy, relevance, timeliness or completeness of this outside information. The inclusion of links or pointers to particular items is not intended to reflect their importance, nor is it intended as an endorsement by or for the Center for Performance Improvement.