By all accounts, dealers did better last year than they have in a decade. Average profit per dealership tripled since before the pandemic and reports suggest that the market will continue to grow, so, why are we talking about firing people?
Many of the salespeople responsible for dealership success — the ones who made six-figure incomes last year — were hired coming out of the pandemic and have limited experience in retail auto. That means that as the market changes in coming months, dealers will have some tough decisions to make and even tougher conversations to have.
Firing someone isn't easy. It's not supposed to be — even when it's for cause. Planning and preparation can make the conversation go more smoothly and decrease the likelihood of legal action. Here are five principles to keep in mind if you are planning layoffs at your dealership.
1. Do prepare a script. Write out a script for the conversation. It helps structure the dialogue and keeps you from getting off track, even if the employee interrupts with questions or an emotional response. The script doesn't need to be read verbatim, but use it to outline the key points so you don't forget something; this is especially important if there is a separation agreement or a legal issue that requires follow-up. The goal is to share difficult news with kindness. Practicing in advance allows you to focus entirely on the employee while delivering the news.
2. Don't conduct the conversation via Zoom (if you can help it). The tougher the conversation, the closer it needs to be. In-person terminations allow you to read body language in a way that can't be done over video and adjust what you're saying accordingly to ensure that your message is received effectively. But in person doesn't mean all at once: Don't pull everyone onto the floor and make a group announcement. Use a private office, set it up appropriately, and have another member of the management team or your HR partner join you for the meeting.
3. Do be clear and to the point. Whether the news is a surprise to the employee, it's important to be clear that you are communicating a decision, not inviting feedback. It is not an opportunity to negotiate. Termination conversations should be kept between five to seven minutes long, allowing for follow-up questions from the employee later in the week. Expect questions related to group health care immediately following the news.
4. Do deliver with empathy and listen actively. As much as we dread tough conversations, it's harder on the receiver, especially when it's a surprise. Communicating with empathy is essential, and part of demonstrating that is through active listening.
It's hard to do because you're likely focused on getting the news out, but active listening shows you value the person, regardless of the message. After you share the news, pause, ask them if they have questions, and just listen. You don't need to respond immediately to any questions, simply thank them for the information and, if appropriate, let them know when you'll get back to them with an answer.
5. Don't make it about the person. Even if you're firing an employee for performance, make the conversation about the performance issue, not the person. Everybody screws up at some point. Allow the person to leave with their dignity regardless of the issue.
If your dealership finds itself in a position where sales or service people are being fired, use these guidelines as a starting point. It will help the conversation go as well as it can, and reduce the risk of legal issues later.