THE TIPPING POINT. I know that as a small business owner it’s tough to pay higher wages when everything costs more, but paying a little more might get the dealership a lot more in return. There is a tipping point.
Don’t think it doesn’t affect business. Customers are attracted to personalized service, and the people who serve them make the difference. I believe sharp, talented and experienced people are out there but may not be answering a dealership’s help wanted ads because they think the shop pays poorly.
Furthermore, it’s amazing to me that many dealer principals expect their teams to deliver a premium experience when they pay wages not much more than a fast-food joint. While some pay their general managers and sales managers well, they strangle their business by minimizing the compensation of frontline staff. I run into dealer principals all the time who tell me they are stressed to the max due to employee problems. You know what? The solution might be only a few dollars an hour away.
When you lose a good employee, it costs a bunch of money to attract, hire and train a replacement. I’ll give you an example; about 20 years ago a major motorcycle manufacturer determined that it costs an average of $36,000 to attract, hire and train a tech who was 80 percent efficient with another who could perform at that same level. For that reason alone, shops would be well-served to pay a little more to attract and hold on to good employees.
It makes sense to provide an attractive base pay and then create incentives to motivate individuals to put in the extra effort. For example, a base rate for technician wages should be tied to their proficiency; then they should be offered an incentive on their upsells. Hungry techs will identify more opportunities for service, repair and enhancement when they are inspired by a bonus to do so. That means more for them, more for the store and improved customer relationships because the vehicle is well taken care of.
Likewise, Parts professionals should be on a base pay plus incentive on their sales dollars. That will motivate them to deliver every part needed, and they’ll pay better attention to customers who are shopping for accessories. Now, no plan is perfect, so when you hire someone who isn’t motivated by monetary reward, let them go and seek a replacement. Be sure to mention the range of annual pay that the position offers and how the applicant can achieve it.
Investing a little more in employee compensation and rewards could be your road to creating a reputation for premium customer service — the bonus being that talented Parts and Service professionals will come knocking on your door wanting to work for a company that compensates well for their efforts.