The three public dealership groups that reported fourth-quarter earnings last week share a common mission: Ramp up recruitment and retention in the service department.
Group 1 Automotive Inc., Asbury Automotive Group Inc. and Penske Automotive Group Inc. are implementing more sophisticated recruiting strategies and revamping their service staffers' schedules, benefits packages and compensation plans to attract and retain technicians and advisers. AutoNation Inc., Sonic Automotive Inc. and Lithia Motors Inc. also will report earnings this month.
"Everybody in the industry is struggling with advisers and technicians," Daryl Kenningham, president of U.S. operations for Group 1, told Automotive News last week. At the NADA Show in San Francisco last month, "Every other booth was some kind of recruiting or hiring vendor offering their services to dealers on how to attract more technicians."
According to the National Automobile Dealers Association, the retail auto industry needs about 76,000 new technicians every year to keep up with job openings.
Group 1, of Houston, last year began offering an in-house university, a revised compensation structure, a defined career path and a four-day workweek to attract job candidates to the service department. In the fourth quarter, service technician head count rose 12 percent and service adviser head count increased 21 percent, compared with the year earlier.
"We're now a more attractive place to work," Kenningham said.
About half of Group 1's U.S. stores implemented a four-day workweek in the fourth quarter. Among those dealerships, the growth in customer-pay work was double that of the stores that have not launched the schedule. More stores will adopt the four-day week this year. When fully implemented, the schedule will be in place at dealerships generating more than 80 percent of the retailer's parts-and-service revenue in the U.S. The remaining stores are too small for the schedule, executives said.