Women In Automotive 2017 - Donna Wagner
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Internships for Recruiting? You Can Do This –– and Northwood University Can Show You How Searching for fabulous, productive employees? Think internships. In this workshop, you will learn how to structure internships, where to recruit and tips for a successful launch.
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Women In Automotive 2017 - Donna Wagner
- 1. Internships to Improve Your Bottom Line? You Can Do This Northwood University Can Show You How
- 2. "What is concerning is that we continue to have an industry that suffers from very high turnover and an inability to retain workers," NADA Chief Economist Steven Szakaly told Automotive News. "When you look at the best-in-class dealerships -- those that are highest in terms of revenue and profitability -- they also happen to have the highest employee retention rate." "What is concerning is that we continue to have an industry that suffers from very high turnover and an inability to retain workers," NADA Chief Economist Steven Szakaly told Automotive News. "When you look at the best-in-class dealerships -- those that are highest in terms of revenue and profitability -- they also happen to have the highest employee retention rate." Dealership turnover squeezing profits Szakaly: Wide profitability gap
- 3. Baby Boomers 1946 - 1964 75 Million Millennials 1981 - 2000 81 Million All other industries: 15.9%* *Source: http://www.compensationforce.com/2015/ 03/2014-turnover-rates-by-industry.html Dealership Turnover
- 4. Cost to hire and train $10/hour retail employee* Center for American Progress study http://www.retaildoc.com/blog/8-reasons-why-your-retail-employee-turnover-is-so-high $3,328
- 6. Solution!
- 11. Most important factors in selecting employment
- 12. Greatest influence on career choice
- 13. Students choose careers based on . . . Perception that life and work must be in balance Understanding of how to advance and what their career path looks like
- 14. Today’s students • Serious about their compensation • Prefer salary-based options even when commission-based positions have higher total pay levels
- 16. Step 1: Look from Outside In What is your differentiator? - Work environment - Unusual or special benefits - Social functions
- 17. Step 1: Look from Outside In What needs improving? - Departmental infighting - Work space - Work / Life balance
- 18. Step 2: Evaluate Employment Needs Where are talent gaps? Short-term Long-term What are the attributes of your next best employee?
- 19. Step 2: Evaluate Your Employment Needs Company culture Skill sets Necessary skills Skills that can be taught
- 20. Step 2: Evaluate Your Employment Needs Get buy-in - Departmental managers - Assure employees of their positions - Have managers assist with identifying employment needs
- 21. Step 3: Structure the Internship Define work for intern: • Train for a specific job • Department rotation • Special projects
- 22. Step 3: Structure the Internship
- 23. Step 3: Structure the Internship Write the job / internship description • What differentiates your dealership? • What will the intern learn? • Include social aspects
- 24. Step 4: Recruit From the right places • Technical schools • Dealer operations • Aftermarket – • Accessory sales • Online parts sales • Parts delivery to local shops
- 25. Step 4: Recruit Distance not always a problem • Relocate for right job • Assist with housing • Understand regional demographics
- 26. Step 4: Recruit Career fairs Get to know Dept Chair AND career services Speak in the classroom Interview on campus Be quick with offers Have a good internet presence
- 27. Step 5: Internship & After Show career opportunities Intern feedback Communicate after internship Offer employment as student enters senior year
- 28. Results Maguire Chevrolet & PJ
- 30. Internships Lead To . . . Better Hires Long-term employees Increased Profits
- 31. Thank you! Questions? Donna Wagner Chair, Professor Aftermarket Management Northwood University WagnerD@Northwood.edu
Editor's Notes
- intro
- Many of you have probably seen the article that appeared in Automotive News about how high turnover has a direct impact on dealership profitability. High turnover impacts not just moral at the dealership but your ability to train and increase productivity of each employee – that’s where you start to see improvements in profitability. So the dealerships who have low turnover or high employee retention rates, have better profitability.
- The NADA Workforce Study reported on turnover across various job functions. On average, dealerships experience a 39% turnover with sales at a high of 70%. Compared to all other industries, the average turnover is closer to 16%. Clearly there is room for improvement! If your company employs 100 people that means that you are turning over 39 every year on average. That’s a tremendous amount of resources used to search out and find new employees. (find average dealership size) Look at the top positions for turnover: they are customer facing. When it comes to loyalty, people do business with people, not companies. From personal experience, I can tell you that when the service advisor at my local dealership went away, I did too. Look at how this impacts your bottom line and the loyalty levels you see from your customers. Comment about good paying jobs!
- Just looking at the cost to hire and train a $10 an hour employee is over $3300. Most of your jobs pay substantially more than that so the cost increases as well. http://drivingsalesnews.com/nada-study-reveals-71-percent-turnover-for-dealership-sales-positions/ http://drivingsalesnews.com/nada-study-reveals-71-percent-turnover-for-dealership-sales-positions/ NADA employment trends https://www.nada.org/CustomTemplates/DetailPressRelease.aspx?id=21474842790 Video: http://content.jwplatform.com/previews/mqwmdt4A-l8Mv2so3
- Here’s the total US population by generation. Now let’s look at what has been in the workforce over the past 5 years and looking forward for the next 10. We take out the Silent and Greatest generations since they are pretty much in full retirement and Gen Z who was too young and even a good portion of the millenials. Please note that the boomer generation is 10M stronger than Gen X. So over the past 10 years and into the next 10, as the boomers start to retired, Gen Xers are moving into jobs left empty by the boomers. But the Xers are already at full employment so that leaves a 13% gap in the workforce that is now being filled by millenials. And while the millennials are an even larger group than the boomers, we’re still short by 8%. That puts the millennials in high demand for jobs . Especially well-trained millenials. It’s definitely a job-seekers market! https://knoema.com/infographics/egyydzc/us-population-by-age-and-generation Ask who’s currently hiring interns? Shortage of good employees? Anyone befuddled by the next generation? Need to separate out the Gen Z because very few are in the workforce How do we get the millennials and then ultimately the centennials into the work place and make the transition from student to product employee seamless? Add what the graph numbers are
- So how do you lower turnover to increase profits in a competitive hiring market? Internships! Vet out new employees with relatively small investment Before we get into the specific how to’s let’s talk a little about what’s important to the younger generation.
- Relate to last year and the recruiting / retainment presentation Last year I was here and talked about recruiting and retainment. A piece of that was the internship and you all wanted to know more about that so I’m covering it in more detail. How many of you had an internship in college? Did it lead to your first job? My experience was similar. If it weren’t for my internship, I don’t know how long it would have taken for me to find a job. My internship was a result of my mom being in a club with someone who worked at the Davis Besse nuclear power station. Totally random. But, very much how many of us find jobs – through our network of contacts. So my internship was at the local nuclear power station, Davis Besse. I was finalizing a computer science degree and the IT side of the business was booming. The internship really wasn’t formalized. I ran computer cable all over the plant, created a warehouse management program, updated and swapped out software programs. Kind of whatever came up. Excellent experience and you learn things that you never expected like crossing a picket line. At the same time of my internship, there were more job searchers than jobs so I was lucky. We’re now in a completely different environment where skilled, knowledgeable employees are in high demand. I’m proposing that you be very strategic in your approach to hiring interns
- I am a member of the CMA HEC and we surveyed our business students about their motivations for finding full time employment. Understanding their motivations can assist you in structuring your internships and job positions.
- The millennials seem to understand that to a large part, their career defines who they are. They also equate occupation and salary with success. Where it gets interesting is that only 54% believe compensation is the most important factor is selecting a career. And of key importance to dealerships is that 89% prefer salary + bonus over a higher commission-based offer.
- Not surprising, 95% of students surveyed indicated that work/life balance and work environment are important considerations. They also understand that future pay is depending on starting salary and that benefits are as important as salary.
- When asked to rank their most important factors, world/life came out as their number one factor followed by compensation and advancement opportunities. Advancement opportunities isn’t too surprising considering that this generation was raised with endless praise. Other factors included company culture and training provided. Both of which tie to the other top factors. For those selecting their top choice Work Life 1 Advancement 2 Comp 3
- When it comes to influencers on career choice, it probably isn’t too surprising that the internet came in at #1 followed by faculty and parents.
- So to sum up the survey, students choose careers based on work/life balance and an understanding of what their career path looks like.
- They are serious about compensation (as some of you have likely experienced) and prefer salary based positions – security. Salary vs commission can be a challenge with sales positions in dealerships.
- So we’ve learned that high turnover negatively impacts profits. Internships can lead to full time employees. Students have high expectations for their career and are in high demand. That leads us to the internship. How you structure the internship should take into consideration the factors previously discussed with regards to what prospective employees find important. AND if you do your hiring correctly, you will bring on a full time employee that has a much greater chance of becoming a long term employee.
- Before you write that internship job description, the first step is to look at your business from the outside in. How do prospective employees view your business as a potential career option? This is like putting together a marketing campaign. What differentiates you? Great work environment, maybe unusual or special benefits like training rewarded with perks like dinners out or logo wear. I worked at a marcom agency that about once a month had beer cart Friday. Do you have social functions for your dealership? Box at the local baseball diamond where you entertain employees as well as VIP customers. A cause that the dealership supports like cancer research or children’s causes?
- What differentiates you? Work space – modern, clean atmosphere, newer or updated furnishings. Do you have work / life balance? There will always be times where employees are expected to put in extra time but does that happen every day? Are people working on their days off to keep up? If an employee puts in an extraordinary amount of time, do you give that person an afternoon off? Give them a gift certificate for dinner? Fix what needs improving or at least start working towards it
- Step 2: What are your short and long term employment needs? Evaluate your talent pool. Short term – where do you need to fill jobs immediately? The industry is experiencing a serious shortage of technicians so the competition for good techs will continue. Maybe you need sales or F&I. Identify short-term needs as a priority. Next, what long-terms talent gaps do you have? What are your goals and objectives over the 5 to 10 years. Do you have the talent to bring those goals to fruition? If not, start identifying the attributes that are needed to help you meet those goals. You might not find all of the attributes in one person but if you don’t identify them, you won’t recognize the attributes when a prospective employee with those attributes is sitting in front of you Business is going continually moving online. Do you have employees that help you navigate social media and online sales? Are all of your employees over 50? Does your employee base look like your customer base? In other words, demographically, how do your employees compare to the local demographic? Gender, age and race can make a difference. You can learn about demographics but people buy from people. Younger people will understand what people their age are interested in. Just as women will relate well to women. A good sales person or employee can overcome those obstacles but it takes time AND when you have diversity in the workplace, you learn from each other to overcome those differences.
- Consider your company culture and your next employee. What attributes do they need to have? When I was working at a small trade association, one of the questions we would ask ourselves is, “would I share pie with that person”. We were a small staff and spent a lot of time together and very much depended on each other. We found ourselves going to lunch fairly often and as friends do, we shared desserts. So in addition to have a set skill set, new employees also had to fit our culture. They didn’t have to share pie but they were welcome to do so. One of the companies that just came on campus takes a unique approach to searching out employees. They find the right people and then put them in the job that fits them best. Their company culture is important so finding people that fit the culture is one of their top objectives. Now the person has to be able to perform but if that should be a given if the company culture is met. One you’ve identified your short term and long term needs and future employee attributes, you can now better identify prospective employees. You have a hit list for exactly the type of person you are looking for.
- Departmental managers need to be onboard Assure employees of their positions in the dealership Can have managers assist with identifying employment needs – can help with buy-in Show how interns can help employees with their jobs, goals and objectives So what happens when you don’t have buy-in from the team? mPort story HR department worked very hard to develop relationships with students. They spoke in the classroom, met individually with students, posted job opportunities on the university website. They then invited a group of students to a “mixer” to learn more about the company and to meet some of the employees. A couple of things happened. First there was a bad snow storm that day and the students had to drive about an hour to the office. That wasn’t that big of a deal until the students met up with a curmuggeon. He slammed the students, talked badly about the company and generally made them feel unwelcome. All of the good that the HR department did, was blown. They could have overcome the snow storm if it weren’t for the one bad egg in the group. My guess is that person felt threatened by younger employees coming into a high tech company.
- BEFORE you bring an intern onboard, know what you want them to do. Are you filling short term needs that have very specific demands or are you looking long term to fill future positions that a new employee will work into? Many of the dealerships who have inters rotate them through departments. Some students are sure they want sales / others know they don’t but things change as they get experience. Show career opportunities as students rotate through departments- also identifies where intern fits best for future employment. Special projects? Are there any special projects that an intern could take on? Project that is important to the dealership but that no one has time to do. i.e. core returns for a reman shop generated $10,000/month to the bottom line. Delphi had an intern develop marketing materials and make follow up phone calls to increase the activation rates of their telematics devices at repair shops. Real work. Show how it impacts bottom line. – gives meaning to work (from last presentation). Allows intern to learn how each department plays a role in the success of the dealership. If you have department silos, having interns and new employees that can cross these borders can start to break down silos.
- I often get asked about whether to pay interns. The answer is a resounding YES! You are competing for employees, and hopefully you’re deriving benefit from these interns. Pay accordingly. Pay rate depends on market and type of work
- Based on what you learned up to this point, write the job description. What differentiates your dealership? Why you? What the responsibilities are of the intern / type of work / their take-aways Opportunity to get to know other interns and employees North Towne auto in upstate new York plans social events and shows interns what the area has to offer. That way the students can see themselves living in the area. Much better than transplanting them cross country and leaving them to their own devices to find what’s great about your community.
- Universities that teach the programs you’re hiring for Tech schools for techs Dealer operations programs Aftermarket – accessory sales; parts sales online; deliver to local shops. These students can find opportunities to increase sales at your dealership. Ask them what opportunities they see. Are you getting your fair share of parts sales? Is there an opportunity to sell aftermarket accessories?
- Distance not always a problem but be prepared to assist with housing (remember at beginning, students will relocate for right job). Tim – Huntington beach, cA; Jim – San Antonio TX Also important to have the social aspect for teaching your interns about the social opportunities in your community. – Northtown automotive Understand the demographics of the area from which you are recruiting. i.e people from st. Louis don’t move – Phillips tried recruiting from St. Louis. Didn’t work. Other areas may not have many job opportunities and could be looking for jobs with good potential.
- Career fairs Get to know the department chair or professors AND career advancement Verify if internship is required for student Verify requirements – student responsibility i.e. 400 hours, relevant work, performance appraisals Speak in the classroom Interview on campus Be quick with offers – scott. Invested 3 summers and FM almost missed him by one day Have a good internet presence – post the intern job on your website. Again, look at your web presence with fresh eyes
- Show career opportunities as students rotate through departments. Maybe have employees in key positions talk about their careers at your dealership. Have intern provide feedback on intern experience Improve for next year. Allows intern to feel like they made in impact and that they have a voice. Communicate after internship Make an offer for employment as student enters senior year
- So how do these tips work out? How do you take an inner city kid who loves basketball and turn him into a contributing team member. A relative of Maguire Chevrolet called me and said that Tom, the owner, was looking at their employees and realized that they needed some younger people. Specifically someone that was willing to grow with the business and possibly someday take it over. They asked if I knew a student that might be a good fit. Immediately PJ came to mind. While he was focused on the aftermarket, he had recently revealed that his life goal was to own a dealership. PJ comes from the city so we weren’t sure if a small town dealership would be a good fit. But it’s working out beautifully. Maguire did their homework on the interview process, showed PJ the opportunities, is rotating PJ through the different departments. PJ has held up his end of the deal by working all aspects of the business. He even worked part time through the academic year. Tom says he doesn’t have to recruit employees. They come to him. In fact he says with maybe one exception, he would rehire everyone that has left his employ. Provide a good work environment, good experience, do your due diligence on your hiring needs and employees will search you out.