Recruiting Refresh: Building a Lasting Staff

Welcome to Indy! My God, what a great place. My name is Don Graff, I'm the president of Don Graff Automotive Advisors. I'm here today at Amplify to talk about understanding, engaging, and leveraging your team. I’ve been in the car business for over 30 years. The last 15 I've been consulting with car dealers on how to improve their teams. But first, let's go back to the beginning: I started, like most people in the car business, on the floor. I went all the way through to become a general manager. I was fortunate enough to have a dealer send me to the dealer candidate academy. I worked for General Motors--I'm sorry, worked for J.D. Power and Associates, Maritz and Associates, where I learned about process and training and cross training as well. And I use those skills to work in dealerships today to improve their operations. So today's agenda, we’ll talk about knowing your workforce. We're going to talk about the different generations. For the first time we have four generations in our showrooms. The big thing we have in 2023 is that turnover is back. During the pandemic it wasn't so bad. And recruitment in 2023, then different things we need to do to get the best people because now it is so competitive because so many people have left the workforce. To get the best people we have to work harder to get them. Then we're going to talk about some conclusions at the end of the day. Again, we're talking about how to know your workforce with the four different elements that are out there now. So we all know the Baby Boomers, we grew up with them. They're the ones that work hard, work those long hours. Like when I came in the car business I had three bell to bells. I was working three nine to nines a week to put food on the table. Then we have the Gen X, we have the Millennials, and the Gen Z's. People we need to work on now and to focus on—on the Millennials and the Gen Z’s who are going to make up the most of the workforce going forward. They're the people that require the most attention. They're the ones that are going to be with us the longest. The Baby Boomers are exiting the salesforce, see the down arrow. Gen X are stable. They're the guys that come into work every day, not much going on with them. They're pretty much fine. Here's a better slide that shows pretty much how they are. While this is a really small list of the different attributes of the evolving workforce, it gives you a pretty good idea what they bring to the table. They're very different. I wouldn't say they're actually, well, they're not that lazy--well they are kind of lazy but they require a lot of--it's not that they just want training, they require a lot of training. They require a lot of attention because they're used to getting a lot of attention. Because they're bright. They've grown up with the computers, the best computers. They're used to getting--what's the latest Apple phone, the 15 just came out, they're used to getting a new phone every year, you know. We wish they were used to getting a new car every year but what are car payments now? The average car payment’s at $750 a month. That's crazy. Yeah, that's what they said the other day. You know, as part of the Boomers, we're optimistic. We're loyal. The Millennials are also loyal and they're open-minded and they appreciate feedback. We can work with that. The Gen X are a little bit more informal. They're independent. They're self-first. They got used to that. They're not going to be coming to work at 8 o'clock in the morning all the time. One of the first things I was taught being a young sales manager was not to park in the front of the building. Park in the back, walk through the shop. Show the guys I'm at work. I'm coming to work just like they are. It especially was valuable to me when I became a general manager for the first time. I watched them. They watched me come to work and it was important for me to say hello to them and see how they were doing. And when I saw a bay that was empty I took note of it. I would ask the manager, “What's going with Joe or Barry? How come they weren't at work? What's going on?” In fact, one time I changed the music because they had hard rock in the department and I thought it'd be better to have jazz or to have some soft music. And the owner came to see me, “Do you know the productivity depends on the pace of the music? That's why we have that hard rock going. So don't fool around with my Led Zeppelin anymore.” I said, “Well, I happen to like the Led Zeppelin too but I didn't think the customers did.” So that brings us to the issue of turnover in retail and we're going to look at some slides that tell a kind of a bad story in our business, but pretty much we're aware of it. You know, sales and service have been ravaged the last couple years with what - we're seeing 30 and 40% turnover. Now we need to discuss this, see what we can do about it. This is the official 2022 NADA workplace study. Just as it says key turnover--turnover by key position. General manager is the least amount. Except in December, we saw a big spike. I don’t know if--Flavio probably knows because he's working with OEMs and they probably were asking him, “Do you know any good people, because we're losing them?” People are either quitting their jobs or they're getting fired. Because they're suddenly making less salary, instead of $200,000 or $300,000. I had one manager come to me, he was looking for a new job. He made $450,000 last year and his manager wanted to cut him and make him responsible for his used car losses. Imagine. Aren’t you responsible for the bottom line? So service advisors, we’re all fighting to find those service advisors. It is so hard to keep them because the generation now knows they can go down the street and get a better offer. I mean, when we see pancake houses with signs out front offering signing bonuses for $500, if you stay 90 days, it's crazy. You know, I live in southwest Florida and at one mall I think it was the Buick GMC--Dixie Buck GMC--had a kiosk by the - I think it was Tommy Bahama shop - and they were advertising $500 signing bonus on the spot. They're trying to solicit people that are off on Saturday and Sunday to come work for them. So how are we going to get those people? And are we going to have to? As you see in some slides, we're going to show different ways how we're advertising and going after them besides--I mean, I used to run job fairs. I remember running a job fair about 10 years ago in northern New Jersey at the big Sheridan at the top of Route 17. I got like 90 people in three days for sales and sales managers. I did a Hire the Heroes four years later and I had the American Legion, I had the VFW, I had one, two, three, four, five dealerships. I had - who was it - I had a rental agency, had all kinds of people there to see the people and nobody came. I had like six people a day show up. I had the American Legion--I had like the color guard there. I mean like a big deal. I had the owner of the motel give us free space and free breakfast. All that's advertised. No one came. I tried to run one last year in Miami, nobody came. I was going to do one at the Ritz Carlton. They were willing to give me free space and have lunch at the golf course. Nobody's coming. This is starting to get to me. This is what happens when people don't pay attention. This is a true life story. A dealer group, a large dealer group, acquired a smaller dealer group. I believe it was last year. A friend of mine actually worked for this company, and told me this story. When they acquired this company they promised a particular manager, who was 20 years with the company as service manager, he would be the director of the new division. And they're on campus for about three or four weeks and they hired somebody else. Now he's entrenched, he's a good guy. He left, he got a--obviously he had a job down the street in days. He didn't take five people with him. He took 10 A and B techs with him. Now I got these figures from a general manager who worked in the vicinity, knows what the cost would be. The acquired dealer group had to hire another 10 people. They estimate the loss to be between $5,000 and $10,000 a week per tech so over a four-week period this dealer group lost about $100,000. This is an import dealer group. So, these weren't my generation where the guy would say, “You know, I have a couple more years to go. Gonna hang out. We'll be happy here.” These are people that didn't want to deal with, “Hey, we can deal with this. It's going to get better.” They didn't believe it was going to get better, so they left. They weren't prepared to accept common business as usual methods. Okay. So everybody in our industry is looking for a culture of trust. That's my intent in this slide. When I heard this story it just blew my mind. It put whatever hair I have left on edge. I'm sure some of you have some stories that you could share with me. I'd like to hear better stories. I mean, I hire people every day. I hired Flavio in the audience here 35 years ago. He rewarded me by inviting me to come and speak. And Flavio's career was a sterling career. Started as a salesperson. He became a general manager in the DiFeo organization. He worked for Mr. Penske as well. And here he is with a sterling organization like Reynolds and Reynolds and he’s highly regarded. He gets to sit anywhere in the room he wants. Smiles and laughs. So what are we doing now? The average--this is the average. Some places it costs a lot more to hire people because they don't have good reputations. Some dealers have advertising pages on their website and are advertising for 20 or 30 people at a time. I'm going to advise you not to do that. You're going to advertise for four or five people at a time if you're looking for people. So it looks like first, you're more selective. Secondly, you're not drowning. You don't need people so desperately. And also you need to be talking about how good it is to work where you work. When you run an ad, you need to be talking about your people. You need to be having your people talk about how good you are - just like your customers need to be talking about how good you are. And your interview process has to be more than just a phone call and a visit. Okay? We see a lot of companies now coming into our space that are talking about specialized onboarding because we're pretty poor at onboarding. I can remember several times when I was still in retail I trusted a dealer or a general manager in a specific store to take care of an onboarding and I’d come in in the afternoon and that person's desk wasn't prepared properly. They hadn't had a chance--they hadn't filled out all paperwork properly and the worst thing was that, again, all the onboarding--they weren't prepared. So that person was ready to blow out. And it takes a lot of trouble to get a star to come in the first place. They're reluctant to leave where they left and when I was responsible for Flemington Car & Truck Country, I had 14 dealerships. I was the e-commerce director. And I stole people from the Haldeman group. They had four big Ford stores, and I stole one particular person—Steve. I put him at my Princeton Ford store, and you'll love this story, his manager called me one day on a Monday said, “We're working late on Saturdays. Your guy’s keeping us here late.” I said, “Well, why is that?” He said, “Well he sold three cars. I didn't get out here till 8:00.” I said, “Isn’t that a good thing?” He was their top guy. He was my internet guy. He's cradle to grave doing 25 cars a month. You know, after that store closed he went back to Haldeman. He's still there now. They have two stores, he's a general sales manager. 30 years in the business. He's a star. You got to recognize when you have someone that's outside the box and support them. So what—I wanted to ask a question. What do you think normal attrition should be? What’s average in your store when you're looking at people? I'm seeing ads now where office people are turning. I was looking in our area for Fort Myers and Naples and there are like 10 ads for office people. There are three ads for office managers. I never see that. The Mercedes dealer is looking for an office manager. Those are quiet ads. People--they fill those ads in a couple days. Here's another one of those graphs and you can see now we're dividing them up because we don't need so much room for the Baby Boomers. You know, but they're green because they're still--they're stable. I choose green because that's money. They're still generating dollars because they're solid. Okay. Gen X, 33%. They're in red because we're looking at--we have two times we're using the word poor. They're looking to have health benefits because they have fear after the pandemic. They’re a little bit younger. They're looking for stability. And of course you have the Millennials that are the next generation up. They want to make sure they have training and they're looking for a promotional track. Here are some strategies we're working through to reduce employee turnover. Prior to the pandemic, we were still working till 9 o'clock. I know a lot of dealerships especially, in Florida now, they're closing at 6 o'clock. Compensation is becoming more and more competitive and so are benefits. I saw a study that, maybe it's Classic, they had done a study and they were averaging about three and a half to four years for loyalty and they figured out if they could raise it to five years they would save a million dollars a year in personnel costs. So if they're able to do that, one of the things I was noticing during the pandemic, especially when I was taking my car in for service, there's no more cookies and coffee. Okay. The other thing was they weren't ringing the bell for salespeople getting awards. Okay. And I didn't see any achievements on salespeople's desks for a long time. I'm just starting to see that come back. And I wasn't seeing any awards or any lunches for people in the dealerships. So I wonder if that's coming back. Now I'm in the land where there's a lot of Terry Taylor stores and I still don't see lunches and stuff for those activities. Now, I grew up in northern New Jersey where I have Prestige stores and when I worked for them in the early 2000s they had Lexus, BMW, Mercedes, Jaguar, MINI, Toyota. All the stores were in the top 10 in the east. They're all very process driven. I went to work with them and within a year my--I was in charge of the BDC in the Toyota store, we're in the top 10 in the east and Toyota came and did a story on us. Essentially because of the processes that we developed and that was the reason we were so successful there. The store went from number nine in the east to number three in that period of time because of their process--the whole organization is so process driven and they had zero turnover. And believe it or not half of the salespeople on the floor were making over $100,000. Why would you leave? And they weren't working 9 to 9 every night but they would, you know, the close was midnight. There's no question. I lived 67 miles from the dealership. My wife said, “Are you ever going to come home?” I said, “Well, I can't afford to come home.” So these employees want to have a work life balance. Dealer needs to recognize them and get them involved. They're involved in community service now. You want to match them. And they're involved, they're coaching Little League, they're coaching soccer and other sports. Back them up. Get involved with them as well. If they're involved in Harry Chapin with the food drives and stuff, do those things as well. And also big thing now is this tuition support and creating culture of trust and engagement throughout the organization. Now we're going to talk about the challenges in recruitment. Does anyone have fairs anymore? Does anyone do job fairs? No? Again, we're going through the largest demographic shift in the workforce. Boomers, I was saying earlier, we're retiring. Gen X, Millennials, Gen Z is rising. It’s very competitive. We have the post-pandemic impact. People are looking for flexibility. Technology. We had supply chain issues, we still have them. AI is becoming a factor. How many--do any of you dealers use AI for your reception? We have a couple stores that I worked with that have been doing that. In the store I'm in, they're using that and one of the—of course I'm checking out the CRM and I was doing mystery shops. How would you like to be a client that gets five emails in one day because the system went a little bit crazy? And in New Jersey you need permission to send texts. So they asked permission, they still sent three texts. So eight written events. Only one phone call and they abandoned the lead in three days. So it's a lot to work with there. So, we're hiring people without communication skills. You know, in a position where they need to interact with the customer and ask them to come and see us because we're going to take care of them. So we have to make sure--you know so I have to take--sometimes I have a client, I have to take them back to square one. Are we hiring the right people? I know sometimes we're desperate but we can still have an empty seat. And then part of the reason is, we're sometimes missing that key management person that we used to have that was a nurturer in our store. Okay. So what's going on? We have--we were talking earlier at lunch they were talking about what's going on digitally in the industry. We have social media. We have artificial intelligence. We have the different job platforms. Well, LinkedIn’s going to get you more managers. Indeed does find you some people. ZipRecruiter gets you some people. It depends who you're looking for. What is the age of the people you're looking to bring into your agency? You know, we're trying to emphasize a strong online presence and do some digital recruiting. You can see what's happened. Job boards, job fairs are gone. We need a strong community. Company career page. Again we're talking about the employer value statement. We have to be more visible. We got to talk about giving a potential employee a career path in an ad. We're not talking about what they need to do, what the requirements are for them to come to work for us so much in the headline. When I'm running an ad for someone, I’m talking about what I'm giving them, what they're likely to get from us for them to come and work for us. What the benefits are, where they're likely to go. And then we're doing more-- we're doing virtual interviews. Talk to someone on the phone--I'm actually doing a Zoom call. I want to see what they look like. I’d like to get a reaction from them. I want to see how they react to different questions I ask. Are they emotional? How they're going to respond to me. Then the higher level ones, again, we talked about LinkedIn, Facebook. I'm going to show you a Facebook ad that a colleague of mine has been running. She’s run Facebook ads for our industry for over five years. She's based in Florida. She worked with me in Flemington almost 20 years ago. And Glassdoor is where people are going to see what the reviews are for our dealerships. They can find out--people are telling them how much they can earn there, what different managers are like, how long they can expect to be there. Then this last one here: digital applicant tracking system. This is automated. You send your resume in, they grade you. Good, bad, or ugly. You can set the criteria and you should set the criteria with the company you're using. Don't let them do it, because they'll knock out 90% of the applicants and you wouldn't know why. I love this ad. This is a real ad. It's on Facebook. This is an ad in Colorado. They're looking for an RV technician. “Looking for competitive pay, full benefits, and the opportunity for growth? Join the SVG family as an RV tech today. We value your unique contribution and talents. We're looking for individuals who always do the—one, always do the right thing. Two, do their best. Three, show people they care. If this sounds like you, click to apply.” Boom. Fill out the application. 10 minutes, you apply. Send it through. Someone should be calling you back pretty quickly. I encourage any of the clients I have, get an application and call them right back. You get an application you're not going to use, send them an email, tell them the jobs filled, “thank you very much for applying.” Maybe there'll be something in the future. Everybody is a potential advocate for the dealership. All right, wow. That went fast. So we need to be aligned. We need to have an overall vision. We need to focus. Process, there’s that word again. We need to attract the right people. We need to keep the best candidates. Continuously investing in their facility and our people and reward. We get a high return. I mean, I know with the people that stay with you the longest give you the highest return. Recognize and manage multiple generations in the workplace. Okay, these are some of the references and Reynolds will make this available to you. We did a lot of research to put this together. Hope you enjoyed the presentation. If you want to reach out to us, thank you very much.