Why Can’t I Hire Good People?
The words vary from client to client, but the sentiment is the same each time the phone rings. Why can’t I hire good people? Dealers are often inhibited from growth, not from being able to drive traffic to the store, or from their inability to sell or service cars. They are inhibited due to a shortage of staff. Finding good people who are motivated to work and do a good job is a huge challenge today.
Problem number one is that the unemployment picture has changed. We all know how things changed, especially in automotive from 2008 to 2009. At the beginning of 2009 the national unemployment rate was 7.6% and by the end of 2009 was at 10%. That left a lot of folks looking for work; many did not find work right away, so many of them went back to college. Why not, we’ve heard it preached forever: “If you want to get ahead you need an education.”
Unemployment stayed high through 2012. This meant employers had more options as to who to hire, as there were more candidates looking for work. In September of 2014 national unemployment dropped to 5.9%, the first time it had been below 6% since July of 2008. It has continued to drop since, to the current 4.1% in December of 2017 the lowest rate we have seen in 10 years.
But there’s another issue: that’s the national average. Many areas of the country are much lower than that. Ames, IA – 1.5%; Madison, WI – 2.1%; Midlands, TX and Nashville, TN – 2.6%; Indianapolis, IN 3.1%. When unemployment numbers get that low, it tells you that anyone who wants a job can find a job. The labor pool has shrunk considerably.
What you can do
As an employer whose business relies heavily on people to serve customers, auto dealers have a pretty big predicament. If I’m a prospective employee, I have many choices because everyone is hiring. So, what are you going to do to attract my attention, entice me to work for you, and what are you going to do to keep me?
When unemployment drops this low, it doesn’t take much to make an employee leave you. Hours, work environment, compensation, commute or any of several other reasons, so dealers need to take a closer look at what they are offering to prospective and current employees.
Competitive set analysis
Conduct a competitive set analysis. Do you have better hours for your sales team than all your competitors? Does your team work longer hours, but only four days a week? Do you allow flexible schedules for any positions? Do you buy or prepare lunches for your team? Is your compensation realistic and competitive in the market? If you consistently have sales team members that you must monitor to ensure they are earning a minimum wage, you probably have an issue. The issue is, they are not the right person for the sales position, or you are working them way too many hours in which they aren’t productive for you. Neither one works long term.
If your analysis of your competitive set shows you are offering a mediocre job by comparison, what can you do to change that? It’s not always about the money. A single dad might love the opportunity to provide for his children, but you might not be giving him the opportunity because he must drop off and pick up his kids from school every day at set times. Is there some statute that says you can’t allow him to arrive at work 15 minute later every day and leave for an hour every afternoon to get his kids situated? Of course not, it’s the “we’ve never done/allowed that mentality.” How loyal do you think that employee might be to you if you allowed this to happen for him?
In today’s, low unemployment job market, if you want to attract, hire, and retain good people who are motivated to work, you have to be willing to compete for them. Just because you paid your last person $50,000 year, doesn’t mean you can hire the next one for that. Just because your current sales staff is used to working 60 hours per week, doesn’t mean new hires are looking for that. How can you position your dealership differently to get who you need to grow?