Industry pressures also impact the retail side. Dealers are seeing markets consolidate and sales margins decline. That's why the human capital side of the automotive equation has become more critical than ever to the industry's success.
In looking at the dealers who made it through the recession, a common theme in their resilience is how well these dealers support their employees when business isn't booming. Those that adopted a people-first strategy weathered the recession.
Today, while dealers may not be faced with nonexistence via lack of sales, they're still facing issues addressing the costly talent gap, struggling to find top salespeople and service technicians, and attracting millennials from other fields. That's no surprise in an economy with the unemployment rate at its lowest in nearly half a century and companies such as Amazon seemingly determined to upend the minimum wage.
No matter the economic conditions, you need good people to support your business. And these talented employees are always going to be in demand.
At Hireology, we have a term for this phenomenon: the Applicant Economy.
I believe that creating a hiring sales process to target high-performing human capital not only will factor into the biggest trends for 2019 but also will serve as a key factor in the industry's success over the next five years. Here's what we see as the three biggest trends in 2019.
1. Addressing the "Brand Tax" in finding and retaining top talent in the auto industry
What happens when automotive retailers — an industry segment that does not have the best reputation or recognition with consumers, especially millennials — have job openings? They pay a steep "brand tax," by both paying over market value on recruitment efforts and on promotion via job posting platforms.
To circumvent the brand tax, dealers need to better commercialize their website and external-facing brand. Just like it's important for the consumer side of a dealership website to be compelling, dealers need to ensure that jobs can easily be found on the career section of their website. The career section should include an overview of the dealership culture, strong job descriptions and an overview of career paths and benefits. To further avoid the brand tax, dealers need to make sure they're optimizing their recruitment spend similar to how they'd optimize their consumer advertising budget.
2. Adopting a people-first strategy
In today's labor market, there is a top echelon of talent for which all employers should compete. Top talent aren't just browsing job boards. They are leveraging multiple channels to search for jobs and will have many choices and expectations.
Implementing a people-first strategy helps dealers build and engage a larger pool of these applicants. Beyond recruitment marketing, dealers must showcase a strong company culture, continued learning opportunities and other perks that will make their brands competitive in the market.
Dealers that attract and hire talented applicants are not just investing in their people but in themselves. In time, these employees will bring their passion and energy to the business and make clear that they value their work.
3. Elevating the HR function to a leadership role at dealerships
Payroll can account for at least 50 percent of a dealership's operating costs — if not more — so there's little margin for error with poor hiring practices, weak onboarding, high turnover, etc. Yet, when I talk to human resources professionals at dealerships across the country, I consistently hear their frustration at lacking the bandwidth to strategically approach talent acquisition and retention.
In the applicant-driven economy when human resources must wear so many hats — compliance, operations, etc. — dealers must position HR to succeed by investing in attracting, hiring and integrating new personnel into their dealerships. This includes adding an HR expert such as a chief human resources officer to the leadership team.
By elevating the HR function and prioritizing company culture, dealers will decrease the time needed to hire and onboard quality employees.
If dealerships want to attract top talent, 2019 needs to be the year that they shift their approach on how they market job openings. Dealers must market their open positions in the same way that they would the cars on their lot in order to win the Applicant Economy.