Months ago, I started a thread about one of my friends that I referred to as a "superstar" salesperson. I was shocked to see people comment on how they would prefer three salespeople that sold 10 cars to one that would sell over 30. Honestly, it has bothered me since. To my soul, I believe that the measure of any institution is it's people. I also believe that you are much more likely to lose a 10 unit per month salesperson than one that sells significantly more. Most dealership pay a draw against commissions. I highly recommend that you take a look at what that is costing for those employees that don't meet their draws. Take a look at six months worth and you might be surprised. That is if you are experiencing a lot of turnover.
Costs associated with turnover are separation, recruitment, training, loss of productivity, poor morale and negative effects on company reputation.
Here are a few examples:
1. When someone leaves a dealership, existing employees have to perform tasks of the departed employee along with their own. It could be heat or putting tags on a car or making CSI calls. It puts a burden on the remaining employees taking them away from what they should normally be doing.
2. You can calculate the cost of lost productivity at a minimum of 50% of the person's compensation even though others clean up their work.
3. Do you conduct exit interviews? Their is a cost involved. You have administration costs of stopping payroll, benefit enrollments, COBRA notification and enrollment and any other forms your company may require when someone quits.
4. Assuming that your dealership trained the employee, that investment left with the employee. What did it cost the dealership for any certifications that employee had? Most dealerships require this and most people do this on company time.
5. Many dealerships require the prospective employees be interviewed by three managers and then the GM or GSM. What is their time worth?
6. Dealerships require drug testing, someone to check references and a background check. This cost time and money.
7. Calculate the cost of lost knowledge, skills and contacts the person, who left, takes with them.
8. What is the impact of unemployment insurance premiums as well as the time spent to prepare for an unemployment hearing or cost paid to a third party to handle the process.
9. There is always a cost associated with the time and effect on morale while other employees discuss the person's leaving.
10. What about the cost of loosing customers that the employee plans to take with him.
11. Finally, add the cost of recruiting another person to take the employees place. Most of those cost have already been discussed but normally you have to advertise in some way.
Really good salespeople will migrate to really good stores. Those stores can pick and chose their employees to make sure they fit into their culture. Excellent managers can control the better salespeople that tend to be difficult. These stores can afford to pay well because they have have less turnover and their salespeople are far exceeding their draws.
Costs associated with turnover are separation, recruitment, training, loss of productivity, poor morale and negative effects on company reputation.
Here are a few examples:
1. When someone leaves a dealership, existing employees have to perform tasks of the departed employee along with their own. It could be heat or putting tags on a car or making CSI calls. It puts a burden on the remaining employees taking them away from what they should normally be doing.
2. You can calculate the cost of lost productivity at a minimum of 50% of the person's compensation even though others clean up their work.
3. Do you conduct exit interviews? Their is a cost involved. You have administration costs of stopping payroll, benefit enrollments, COBRA notification and enrollment and any other forms your company may require when someone quits.
4. Assuming that your dealership trained the employee, that investment left with the employee. What did it cost the dealership for any certifications that employee had? Most dealerships require this and most people do this on company time.
5. Many dealerships require the prospective employees be interviewed by three managers and then the GM or GSM. What is their time worth?
6. Dealerships require drug testing, someone to check references and a background check. This cost time and money.
7. Calculate the cost of lost knowledge, skills and contacts the person, who left, takes with them.
8. What is the impact of unemployment insurance premiums as well as the time spent to prepare for an unemployment hearing or cost paid to a third party to handle the process.
9. There is always a cost associated with the time and effect on morale while other employees discuss the person's leaving.
10. What about the cost of loosing customers that the employee plans to take with him.
11. Finally, add the cost of recruiting another person to take the employees place. Most of those cost have already been discussed but normally you have to advertise in some way.
Really good salespeople will migrate to really good stores. Those stores can pick and chose their employees to make sure they fit into their culture. Excellent managers can control the better salespeople that tend to be difficult. These stores can afford to pay well because they have have less turnover and their salespeople are far exceeding their draws.
