Some auto dealers manage to hire, hang on to millennials
HELP WANTED

Making the young less restless

Some auto dealers manage to hire, hang on to millennials

At Rick Case Fiat in Davie, Fla., the general manager is 25; most salespeople are about her age, and employees are recruited at a nearby mall.
Related Topics

Cynthia Toro-Azicri walked into Rick Case Fiat in Davie, Fla., in 2011 to apply for a position as a cashier, looking to earn some money while she searched for a marketing job.

A few months later, she found that marketing job -- as marketing manager for the Fiat dealership. And three years later, she is overseeing the Fiat store as general manager.

"I started helping out in the marketing and advertising area," said Toro-Azicri, now 25. "The sales aspect became very attractive to me. I started selling cars on the weekend and when the other salespeople were busy."

For Rick Case Fiat, Toro-Azicri's rise was another coup in a long effort to attract young people to the sales floor and keep them motivated enough to stick around.

Toro-Azicri said most of the sales staffers at the dealership are around her age, with the youngest employee 19 years old. She said it's the social aspect of the job, not the pay, that drives her to put in six or seven days a week.

"It's an opportunity to meet people, hear different stories, impact people's lives in a different way," she said.

Figuring out how to attract millennials, those coming of age in the new millennium, has been a persistent challenge for auto dealers, whose business has been marked by long working hours, cutthroat competition and unpredictable incomes.

An even bigger challenge is retention: Turnover rates among Generation Y employees -- defined in the 2013 National Automobile Dealers Association Dealership Workforce Study as those born in 1982 or later -- are about 100 percent -- one worker lost for every one hired -- and increase with the average amount of hours worked per week, said Ted Kraybill, president of ESi Trends, the research firm that designed and oversaw the NADA study.

"Sales consultants ... don't last," he said.

One reason, Kraybill says, is perceptions about work-life balance that are out of sync with the traditional auto sales lifestyle.

"The baby boomers and older generations still believe that since they've worked bell-to-bell six days a week, and their fathers did, that [millennials] will too," Kraybill said. "Younger kids are saying this doesn't make sense."

Retail consultant Mark Rikess says the millennial work force is one that values stable income, time off, team-oriented work and upward mobility, which can be directly at odds with the traditional dealership culture.

Recognizing the disconnect, dealerships across the country are testing different strategies to make their dealerships more amenable to young people seeking to build a career.

Peter Blackstock, owner of Victory Toyota and Lexus Monterey Peninsula in Seaside, Calif., has spent the past three years on a complete overhaul of his dealerships' culture to make younger hires a priority.

Blackstock worked with a psychologist from Stanford University to construct a work environment tailored to team-building and evolving work-life balance ideals.

"It takes quite a while," he said. "We're dealing with different generations. Now everything is more transparent, more open. We've got to change the culture."

Blackstock said his hiring criteria emphasize past personal success in any arena, rather than auto sales experience or education. "If someone has had success at another job, there's a chance they will have success for us," he said.

New hires spend three to four weeks off the sales floor and in training and then sell on the floor with a sales manager. They are given a first-month sales goal of four cars, which Blackstock says is usually surpassed.

Additionally, in their first month on the dealership floor, they are given the option to continue their $15-an-hour training wage or work on commission. Most opt for the hourly wage.

Blackstock said he found younger salespeople excel at long-term innovation projects and have come up with creative and effective solutions to on-the-job problems. "If you retain [younger salespeople], you have a great business over the long run," he said.

Changing the culture didn't come without a cost, he said. Some longtime employees who preferred conventional sales practices left his stores.

"The way they were is how the system has always worked," he said. "You give them an opportunity to be part of the team. If they don't want to take it, then there's nothing you can do."

Some dealers have taken a hard look at how they motivate employees in light of changing values, retooling traditional incentives to move away from purely financial benefits.

"The key performance paradigms in this industry are all built around the belief that people are motivated by money," Kraybill said. But for a generation that has seen the consequences of economic recession firsthand, time off and steady paychecks are a better sell than big paydays and bonuses.

He said rewarding employees with free time is an easy way to give millennials the time with friends and family that they want now and don't believe they'll have later in life. "They don't believe the system is going to take care of them and they'll be able to retire," Kraybill said. "They want to have fun along the way."

At Harr Motor Co. in Worcester, Mass., where 80 percent of the sales force is under 30, taking the anxiety out of sales work has meant a far more significant change to how cars are sold. After months of research and consulting three years ago, Michael Gross, president of the dealership, instituted a 45-hour workweek and a one-price policy, with no negotiation.

"I recall talking to salespeople we had at the time, and they did say they disliked most the long hours and then the back-and-forth negotiations," he said. "Things were out of their control."

Gross says his sales have been increasing year over year. He took an additional step to boost salespeople's confidence: giving them the title of "product specialist." He said the name change, along with the five different levels specialists can aspire to move up to, signaled to employees that they were on a career track rather than just working a job.

"They can achieve over time," Gross said. "They view it as a career path. They can see how they can accomplish more and work a little harder."

Other dealers also are using creative recruiting strategies to identify potential and foster growth.

Toro-Azicri: A fast rise in rank

Rick Case Automotive Group operates 16 dealerships in Florida, Georgia and Ohio, and is working on opening an Alfa Romeo and Maserati store in South Florida. The company ranks No. 27 on the Automotive News list of top 125 dealership groups in the United States for 2013.

"To us, it's all personality," Raquel Case, general manager of Rick Case Alfa Romeo and Maserati and former general manager of Rick Case Fiat, said. "It's not experience because we can train you."

The Fiat dealership has a recruiting center at a nearby mall. Case said the location attracts young retail workers or casual shoppers in the market for a new car or job who wouldn't typically apply to a dealership.

"It gives them the opportunity to find a real career," she said.

Case said she took advantage of the "fun" image of the Fiat brand when she was the store's general manager to create a more comfortable environment for young employees. Rewards such as games and relay races when sales goals are reached keep pressure low and competition friendly.

Toro-Azicri says she was able to navigate her way through the Fiat dealership quickly with the help of a general manager who recognized and fostered her interests.

After her three-year rise through the Fiat store, she said she plans to stick with the group and continue her upward climb.

"One day I will be able to run this place," she said. "I will be with this company until I'm 80 years old."

Generational challenge
Dealerships are adapting to the rise of millennials, those who came of age in the 2000s, as they become a growing segment of the work force and consumer market. Figures are for 2012.

• 44: The average age of dealership salespeople

• 23%: Generation Y employment as a share of total dealership work force, up from 19% in 2011

• 100%: Annual turnover rate among Generation Y dealership salespeople, compared with 35% overall

• 40%: Generation Y share of total U.S. unemployment rolls

• 41%: Percentage of new hires at dealerships who are millennials, up from 34% in 2011

• $1,030: Average weekly earnings for new-car dealership employee, up from $875 in 2009

• 55: Average number of employees in new-car dealerships

Sources: NADA 2013 Dealership Workforce Study and NADA Data 2013

Contact Automotive News


advertising
Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.

Or submit an online comment below. (Terms and Conditions)




Rocket Fuel