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The Hiring Test

The cost of employee churn can exceed $10,000 per position, which is why the magazine’s HR expert says dealers need to have a plan before they expand.

May 2012, F&I and Showroom - Feature

by Lon Leneve

After a difficult recession, dealers are hiring once again. It’s been a quiet rebound: It started in 2010, when same-store headcounts increased by approximately 6 percent. That trend continued in 2011, primarily in sales departments as customers began returning to showrooms in greater numbers. But even as consumer confidence improves, employers are likely to remain cautious in the near term, especially when it comes to non-sales positions.

Why the caution? Well, management teams across the industry have been working hard over the last three to four years to get their houses in order. Dealerships have been examining manual and legacy workflows, identifying inefficient and poorly integrated processes, and making strategic investments in tools and technology with an eye toward doing more with less. The focus now is on protecting and growing their margins. The overriding concern at this delicate stage in the economic recovery is “cost creep,” so dealers should conduct any hiring with due deliberation.

Test and Reassess
While there may be opportunities in 2012 to bump up staffing levels, it’s probably best to start by performing a basic assessment. Here are a few questions you need to answer:

• Are you experiencing administrative process backlogs? If so, try to pinpoint the reasons you’re falling behind. Perhaps you’re understaffed, or maybe your processes are obsolete and ineffective. It’s also possible that your current staff is poorly matched to the tasks they’re being asked to perform. The key is to determine the problem before you hire.

• Are the backlogs a short-term problem? Paperwork can pile up to the point where the backlog exposes the business to unnecessary risk. If you are consistently struggling to comply with industry regulations, or if you don’t have a clear picture of your compliance levels, you need to address those issues right away. The solution might require more personnel, better processes, better tools or a combination of all three.

• How is existing staff holding up? Talk to your employees. They’ve probably survived layoffs, and they may have had to take on extra work. If frank conversations with staff indicate high stress levels or burnout, consider adding positions before some employees reach their breaking point.

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