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.

http://blog.bersin.com/benchmarking-talent-acquisition-increasing-spend-cost-per-hire-and-time-to-fill/

https://www.nada.org/workforcestudy/