Loyalty, Retention and Key Insights in Forward Thinking Auto Retailing

I noticed recent Discussion Board postings about whether to brand your dealership or yourself.  It is an interesting discussion, particularly in our industry with the estimated employee turnover of 40%.   I started thinking about how this issue relates to improving dealership employee attrition.  And I think in most cases both the dealership and the individual should be branded, and this includes all departments that are customer facing.  Your customers should have an attachment to your dealership, and this means an attachment to your employees because they are a part of the dealership.  If they don’t feel apart of the dealership, you’re not managing well: either you’re not creating a culture of inclusion or you hired the wrong person.  Customers (in most industries and especially ours) notice when their key contacts leave.  Vehicle purchases and even parts and service can involve a lot of money, and a lot of emotion.  When consumers develop trust with dealership personnel, they can be incredibly loyal and make referrals.  It’s one of the best ways we have to generate more business.  And you can easily lose that business when employees leave.  Yet another reason to focus attention on retaining your good employees …   

It is inevitable that you will lose employees. It’s part of life. With the proper management, structure and hiring process, we do know that you can (and should) greatly reduce that loss.

That being said, now and then a good employee will search for greener pastures. When this happens, be sure to keep your wits about you. Don’t make empty promises, offer unfair raises/promotions or beg them to stay.

You have to set a good example for the remaining employees and make sure to keep them in mind when you’re negotiating to keep another employee from leaving. If you’re tempted to offer them a better position or better pay, evaluate the position and pay they’re currently at. How long have they been with the company? Are they being paid fairly? Do they have the ability to take on more responsibility, or do they really need more training?

Be fair to yourself, your other employees and the employee on the way out. Take time to think about your response and decide what that employee is worth to you in the context of your business and your other hardworking employees before you make an offer.

According to research from Vanderbilt University and Cornell University, low “behavioral integrity” erodes employee moral and intention to stay in a particular job. And just what is behavioral integrity? It’s just a fancy way of saying the match (or lack of) between your words and your actions. If your behavior does not match what you say, your employees, at all levels, notice it and it has a strong negative impact.

We’ve touched on this before, and it’s something that you need to be mindful of at all times. Their research of nearly 2,000 employees at over 100 work locations found, “a correlation between supervisors receiving low scores on behavioral integrity and line employees measuring low on trust, job satisfaction, contributions to the workplace, and intent to remain on the job. What’s more, low behavioral integrity tended to shape the culture of the entire workforce.” Wow, that’s pretty strong stuff!

Have you ever worked somewhere where your manager was always talking about the importance of courtesy and fast responses to email and phone inquiries, but when it came to your questions, s/he didn’t ever seem to have time? Have you ever had a general manager who would go on and on about the importance of marketing on the Internet, but when budget time came around, all those line items were cut?

I once had a new manager come into the dealership talking about how much he valued employee feedback, but when people starting sharing their thoughts with him, he summarily dismissed their feelings as invalid or unreasonable. Worse yet, he actually became angry with an employee and said that his request was stupid. Well, you can imagine how much feedback we offered after that, and we all found out very quickly that our boss was a real jerk.

And ultimately, the vast majority of your employees are going to mirror your behavior. So if your actions aren’t consistent with your words, theirs won’t be either. You simply can’t have trust and loyalty in this type of environment.

To sum it up, the research concluded the following:
• Actions must be consistent with words, mottos, and policies or employers will lose the support of their employees.

• Bad behavior being carried out by those at the top of the company does not stay within the boardroom, but spreads throughout the organization.

Walking the talk (high behavioral integrity) is one of the best ways to help ensure that you keep your good employees and a positive work environment. Always make sure your actions match your words. People notice it if you’re guilty of this and your dealership will suffer greatly.

Do you have funny (painful at the time) stories about bosses with “low behavioral integrity?” Share them with us!

Understanding employee needs and concerns while they’re in your employment is considerably more important that understanding why they leave. Exit surveys may have their place, but the best way to solve the problem of employee attrition is to keep current employees happy.

Focus groups, monthly surveys, and regular refreshers on company policy/goals/mission are all good ways to engage employees now. And they are much better than waiting till they’re walking out the door.

Services like SurveyMonkey.com are easily adaptable to your purposes. Write your employees a note about their importance and solicit their anonymous feedback with a customized survey.

It’s important to engage your employees. Consistently communicating your business’ position and your gratitude or concerns will help them to see you as an interested individual and not a cold and distant leader. Remember, communication is a two way street. Soliciting employee thoughts and feelings will not only help to curb attrition, but may also bring some great ideas to light and ultimately increase your ROI.

Employees leave jobs for all sorts of reasons. If a company experiences serious turnover, there’s a good chance that many employees are leaving for the same reason. Employers often try to employ exit surveys in hopes of locating the problem area; however, it’s rare that exit surveys really get to the bottom of a company’s problem. Employees and ex-employees alike fear retribution or “burned bridges” and are not likely to really express how they feel. Additionally, employees tend to be reluctant to speak with management about their concerns and discontent.

One way to encourage employee interaction in company-wide problem solving is to create a venue that allows employees to voice concerns to several representatives, with no names attached to issues raised. This allows employees to maintain some level of anonymity. Representatives are also able to voice concerns without claiming them necessarily as their own. You’re far more likely to get an accurate depiction of company life by removing the fear of retribution or being “singled out.”

Author David Silverman’s list, 11 Habits of the Worst Boss I Ever Had, is a collection of “demotivational lessons.” Frequent mind changing tops the list.

Again, when employees are left to feel uncertain about goals and expectations, you can be sure you will not get their best. No one feels comfortable in an atmosphere of doubt and insecurity. Mixed messages and mind changes not only confuse and disorient, they also lead to fear about job security. Any employee who is afraid they can’t do their job effectively and may be fired is probably going to look for alternative employment. In addition, any truly motivated person will be out the door the second the opportunity arises. Employers should prize motivation and drive. Nothing kills those attributes like a constantly changing or confusing message.

Silverman’s list is comprised primarily of various degrees of poor communication. As an employer, you should help your managers lay ground rules for communication. Be sure to clearly communicate your goals and, in turn, help your managers to clearly communicate those same goals. Explain the importance of a structure that works. Don’t enforce or encourage meetings for the sake of meetings or any other inflexible bulwark designed for good, but dedicated to a lack of productivity.

In general, employees are happy when they know what they’re working toward, and have the freedom to work toward, goals in the most effective way for them.

Check out Silverman’s complete list at:
http://discussionleader.hbsp.com/silverman/2008/07/the-flip-side-of-leadership.html.
Are you guilty of any of these leadership sins? Be honest…

A recent Harvard Business Review case study, entitled, “Why Are We Losing All Our Good People?” suggested that the blame often lies at the feet of management. If you discover that turnover in a particular department is common, take a good look at the missing employees’ manager. In the study, Anne Pringle of Microsoft explains that, “leaders (are) accountable for attracting and retaining key talent.”

Employee retention is too large a job for one individual. The dealership as a whole, more specifically the leadership, should make retention a goal. Immediate managers should have insight to individuals and the specific things those individuals value. If the loss of a valued employee is a surprise, you can bet that someone in leadership dropped the ball. Management should be in tune to employee needs, especially the employees directly under them.

Educate your management team. Help them to understand the dealership’s goals where retention is concerned. Empower them to be flexible with employees and be careful to hire management that understands your dealership’s position. It’s been said that employees don’t leave jobs, they leave managers. There is certainly truth to that, probably more than most of us take the time to realize.

Think about it… and the money your dealership loses every time you lose an employee.

Technorati Tags: employees, hiring, parts, recruiting, retention, sales, service

As mentioned previously, training and resources can potentially lead employees to leave companies as they increase in value. This tendency can be nipped in the bud with a little caution during the hiring process. If companies take care to hire teachable employees with a propensity to commit, and take the time create a favorable impression from the start, they will find that an investment in those employees will be very low risk.

Many of a company’s attrition issues are determined during the very early stages of their relationship with new employees. A study by Ipsos-Reid claims some 30% of employees plan to leave their job within two years. But, Corning Glass, the specialty glass and ceramics giant, found that employees who enjoyed a positive orientation to the company were 70% more likely to remain at their job for at least three years.

Employee retention starts with the interview. Choose your employees based on attitude and ability to learn. Be sure to continually give them the tools they need to succeed. Entrust them with some semblance of autonomy, the ability to participate in company wide decisions and opportunity to expand their skill sets, and kiss high employee attrition good-bye.

Technorati Tags: employee retention, hiring, turnover

A recent study from Vanderbilt University’s Owen Graduate School of Management suggests that simply training good employees is not necessarily enough to keep them around. In fact, sometimes training (on its own) lead employees to leave companies as they become more valuable in the marketplace. All is not lost, however.

The study finds that employees who feel empowered are far more likely to stay with a company. When employees have a measure of autonomy and decision making power, they “buy in” or commit more fully to a company. Empowerment also includes reward or bonuses directly proportional to performance. Incentives and rewards help to keep employees motivated and on top of their game.

It’s important to strike a balance. Investing in employees without their return investment in your company will generate little reward. However, hiring good people, investing in them and empowering them fosters their commitment to you.

Technorati Tags: employees, hiring, Rentention, turnover

Just as the dawning of the “Internet Age” redefined the consumers ability to access information and become a more knowledgeable and confident shopper, another phenomenon is occurring 15 years later. Those same consumers, some of whom were not yet talking, let alone walking are writing about your products on blogs, editing your commercials on YouTube, defining who you are on Wikipedia and building groups of influence about you on social networking sites like FaceBook.

These are all elements of a social phenomenon, a groundswell that has created a permanent shift in the way the world works, some see it as a threat, others as an opportunity. Either way it is here now, and it it here to stay. It is a spontaneous movement of people using online tools to connect, take charge of their own experience, and get what they need…..information, support, ideas, products, and bargaining power - from each other. Its global, and its unstoppable! In my opinion is a tremendous opportunity to differentiate yourself from your competitors, build deep connectivity to your customers and build a positive image of your brand, be it a dealership, an OEM, or you as an individual.

The social networking profile of this community takes the form of for groups. Creators - they maintain a blog, a web page, or upload videos and represent approximately 20% of the online community. Critics - these people respond to blogs, post comments, edit wikis, they react rather than create, around 25% of the online community. Collectors - this group collects information, they bookmark websites, they represent a small percentage of the online community, approximately 10%. Joiners participate in or maintain profiles in the social networking sites such as MySpace and FaceBook, and has reached over 25% of the online community. These groups will continue grow in size and their reach into all facets of both our personal and business lives will continue to impact how we communicate, connect to and respond to each other.

The questions we must all ask ourselves is, where do we fit into the groundswell?  Its happening with or without us, so we can either a) sit back and watch this tremendous opportunity pass us up or we can b) get involved, grow our brands and use it to our advantage.  For me there is no question, Im in.  I hope you join me.

Technorati Tags: blogs, growing your brand, online communities, online groups, social networking