Management Excellence: Step One, from Dealer Strong.
Lately, I’ve been rather frustrated at the lack of management in many dealerships. Yes, plenty of people have the title manager but are they really managing anything? Let’s look at the simple definition of management – “Management in business is the function that coordinates the efforts of people to accomplish goals and objectives using available resources efficiently and effectively.”
The key word I want to focus on is “people.” I see too many dealers who are missing the boat when it comes to that key word. First of all, managing people begins with selecting the right people for your team from the start. Hiring someone because you like them or want to give them an opportunity it not the way to hire. There are plenty of people to like, that would be horrible for the job that needs to be filled.
The revolving door of employees in some dealerships is actually more like a spinning tornado; people get picked up (hired) and thrown out (fired) in record time. The cost to your dealership is staggering! A Center for American Progress Study published in late 2012 found that the cost of turnover across all sectors of business for those earning less than $75K per year was 20% of their annual salary or about $15,000. For experienced managers at higher compensation rates the cost is much higher. So take $15,000 times the number of employees you replaced last year and see what your true cost of turnover is. A dealer recently told me that he didn’t have a turnover problem – his managers had been with him for years. That’s great, but let’s look at the rest of the staff. The rest of the staff was turning over in record numbers.