Dealerships look outside the industry to resume hiring, but slowly

After an 11-month period in which mass layoffs were followed by a near-equal hiring surge, many U.S. dealerships are nearing pre-pandemic staffing levels as they continue to scout for new talent.

It's a striking rebound from the early days of the coronavirus crisis last spring when dealerships laid off or furloughed hundreds of thousands of employees. While many dealerships are hiring again — and even recruiting from industries hit harder by the pandemic than automotive retailing — they remain careful about the number of jobs they're adding back.

Dahl Automotive of La Crosse, Wis., with six stores in Wisconsin and Minnesota, cut jobs early in the pandemic and is now hiring — but cautiously.

"We did have that opportunity to right-size," Heather Ladwig, Dahl's vice president of human resources, told Automotive News. "We don't want to get ourselves too far ahead of the game. But obviously we want to be adequately staffed for the business level."

Pre-pandemic employment at U.S. franchised dealerships had been stable at around 1.1 million for several years, according to U.S. Bureau of Labor Statistics numbers cited by the National Automobile Dealers Association. But by the end of April, it had fallen to 888,200 before recovering to 1.02 million employees at the end of June, NADA said. By year end, employment recovered to 1.08 million.

Adam Robinson, CEO of dealership recruitment technology firm Hireology, is seeing that recovery firsthand with his dealership clients. But he still expects that 5 to 10 percent of auto retail jobs are gone for good — and should be, because many dealers were overstaffed. "We needed to get more efficient," Robinson said. "And we did. And I think we'll stay there."

Automotive News' 2021 Dealer Outlook Survey, a poll of 183 dealer executives conducted in January, found that 31 percent of respondents said they planned to hire to increase dealership head count this year. An additional 41 percent didn't plan to add staff, and more than a quarter were unsure. When asked in what area they expected their largest expense increase this year, the biggest group of respondents — 32 percent — chose personnel/payroll costs.

As dealers look to hire, many are benefiting by looking to the service and hospitality industries, sectors hit hard during the crisis.

Ivette Dominguez, president of Alpine Buick-GMC in Littleton, Colo., and owner of six other stores in four states, is among them. Restaurant and hospitality workers are accustomed to working long hours and typically have good customer service skills, she said.

"You have to be good to be hired on at a great restaurant," Dominguez said. "You have to be pleasant. You have to be knowledgeable. You have to have your product knowledge down." Such skills "translate really well" to dealership sales, she said.

Those transferable skills are among the reasons Hireology is coaching some dealership clients to look to those sectors for potential talent. Those sectors also have plenty of people looking for work, Robinson said.

The contrast between industries is stark. According to U.S. Bureau of Labor Statistics data, auto retail gained thousands of jobs in December, while the leisure and hospitality sectors shed hundreds of thousands of jobs.

Fleming Ford, president of ESI Trends in Clearwater, Fla., an employment research and consulting firm that works with more than 500 dealerships, said most of her clients have restored their staffs to 90 to 95 percent of pre-COVID levels — and they're looking to stay there, having become more efficient.

But with turnover high at dealerships, they continue to actively recruit and are finding good fits in candidates from the hospitality and leisure sectors.

"They're having people that have no experience in the industry, come out of waiting tables or whatever, and they're selling, like, 20 cars in their first month," Ford said. "It's the skill set now that you need — to be able to communicate well, build trust, connect with the customer, work hard, work weird hours, have that good passion for impressing and helping customers."

Robinson said sales-floor turnover rates approach 70 percent. NADA's 2020 Workforce Study put the 2019 turnover rate for all dealership positions at 46 percent.

Ford said dealerships she is working with are hiring for sales and technicians but also need managers. Some are offering cash bonuses as an enticement. (See story above.)

Hireology estimated there were 28,485 open positions in auto retail at the end of December, a figure that grew to 39,790 by the end of January.

Public dealership groups made some of the biggest reductions in employment early in the pandemic, with many saying thousands of the cuts would be permanent.

Asbury Automotive Group, which furloughed 2,300 employees in early April, is replacing people who leave, "but we're not at a point where we're hiring back people," CEO David Hult said last week.

"We're always opportunistic when it comes to technicians, but even there, it depends upon the brand and the location," Hult said. "I think we'll have a much greater need from that when COVID calms down."

LaFontaine Automotive Group, a 22-store group based in Highland, Mich., is in hiring mode and has successfully recruited from the hospitality industry. CEO Ryan LaFontaine often will leave his business card with people who provide excellent customer service when he picks up carryout food. One recent hire in the group's business development center is a former restaurant manager.

People who have worked as servers, bartenders and managers typically do well after going through LaFontaine's training, group spokesman Max Muncey said.

Dahl's Ladwig said her group resumed hiring last summer and aims to add sales and service jobs in its BDC, plus sales reps and service technicians. In January, Dahl hired nine people, including two with hospitality backgrounds, for sales and body shop estimator jobs. Some recent hires worked at a hotel and a grocery store.

Dahl has ramped up advertising its culture in its recruiting efforts. The group's hours — stores close at 6 p.m. several days a week — can appeal to hospitality and retail workers accustomed to working nights and weekends, Ladwig said. The customer service skills those workers have adapt well to auto retailing.

"We can teach someone to write service or how to work in the BDC," she said.

"You can't really teach someone how to care, like, really care about a guest and that experience."

Jackie Charniga contributed to this report.