Don't overlook the millennials on your staff -- or those you hope to do business with -- when you consider pay plans.
Some dealers are so involved in crafting ways to entice younger vehicle buyers, they forget to develop pay plans that motivate their younger team members. It's smart business to ensure that pay plans are structured to achieve satisfying outcomes for both groups.
"There has been a lot of emphasis on tying [customer satisfaction] to job descriptions so that products are sold and customers have positive experiences," said John Stephens, executive vice president of dealer services at F&I provider EFG Cos. in Irving, Texas. "Our pay plans are built around giving customers greater experiences [while presenting] the spectrum of products and values. We are changing the culture."
EFG recommends a three-pronged approach to F&I pay plans: a base salary, a commission based on dealer goals for product penetration and bonuses for CSI performance.
"It's important to implement pay plans that are motivating. That can be a constant struggle," said Stephens, noting some younger employees balk at pay plans that don't include a salary. "There is some comfort for people who work for a salary. Some dealerships have them do that for six months, nine months, and then show them how much they would have earned if they were paid on commission. Nine times out of 10, they would earn more on commission."
Sharon Shults, platform F&I director at Central Automotive Group, which has eight dealerships in Texas, said it's smart to tie F&I pay plans to customer satisfaction. The subjective nature of the surveys makes it almost impossible to show a direct correlation between pay plans structured around customer satisfaction and high CSI scores, but Shults and other dealers said the anecdotal evidence is more than compelling.
And switching from traditional salaries to compensation more heavily slanted toward commissions and bonuses isn't a hard sell, even for most millennials. After a few months, when they compare their earnings with what they would have earned if they worked on commission, they want to switch, she said.