DE&I advocates, retailers join forces on tough task of getting conversation rolling

The murder of George Floyd in police custody in May 2020 sparked discussion across the auto retail world about how to best address employment gaps of underrepresented groups in the industry.

There was confusion on how — and where — to start.

Many diversity, equity and inclusion programs that flourish in corporate environments tend to fall short of dealership expectations, said Fleming Ford, president of ESI Trends, an employment research and consulting firm in Clearwater, Fla., that works with more than 500 dealerships. Dealerships differ greatly from more "corporate" environments with fixed roles, schedules and benefits, Ford said.

"It's a struggle to bring people from outside to talk to our dealers because everyone's automatic response is, 'You don't get it,' " Ford said. "And there really wasn't anybody that we could find in automotive who specialized in this already."

This spring, ESI Trends joined forces with professional development group Center for Automotive Diversity, Inclusion and Advancement to form a coalition of automotive retail industry leaders to tackle the problem of creating DE&I programs accessible to megadealers and single-store operators alike. The goal of CADIA, formed in 2018 by Cheryl Thompson, is to double the number of diverse leaders in automotive by 2030.

Addressing deep- rooted cultural issues that have hindered diversity in automotive retail is the primary challenge facing the Automotive Retail DEI Champions Council, Ford said. Tackling these problems first requires dealership leaders admitting there are issues in the first place.

"It's hard to change culture without a lot of intention, and a lot of times we have a culture by default. When people feel uncomfortable, they don't like to come to work," she said. "We've allowed the pay plan to be the performance management factor of our industry. We haven't really equipped the managers to know how to hold people accountable ... so that we can manage performance person to person instead of by paycheck."

The council first convened in April with more than 30 participants, including charter founding member Jed Milstein, Asbury Automotive Group chief human resources officer and leader of the public group's DE&I strategy. Participation in the council is among the various steps the company has taken in the past year to address inequalities in its stores and the communities they serve.

Topics include what a good diversity council looks like and how dealerships can most effectively leverage business resource groups, Milstein said.

"A lot of us, and particularly in automotive retail, are trying to continue to improve in these areas," he said.

Council co-chairs AutoNation Inc. and Sonic Automotive Group decided it would be more effective to devote the council exclusively to auto retailers, Ford said, though there may be plans down the road to open a vendor or supplier offshoot council.

Representatives from some of the largest U.S. dealership groups — including all six publicly traded ones — populate the monthly intelligence and best practice-sharing industry fellowship.

Once a month, the group convenes for 90 minutes over video to discuss inclusive hiring and retention practices, the viability of employee resource groups across different group sizes and linking cultural transformation to the bottom line, among other topics.

Participation is limited to members and invited guests, and an annual membership fee of $1,500 plus additional fees, plus $750 for each additional seat per company, is required. The membership fees fund research for the organization as well as compensate external consultants and speakers.

Council members committed to the one-year learning program are also allowed to use the council's logo for their career sites. Carter Myers Automotive Group in Charlottesville, Va., was among the first to adopt the logo. While many dealerships had been working to increase diversity among their ranks, the events of last year added tension and intentionality to those conversations, said Liza Borches, CEO of Carter Myers Automotive.

"The auto industry has so many tentacles that reach into so many parts of people's lives. We have a responsibility to do more and to be more than just selling and servicing cars," she said. "For a long time, our industry didn't have the structures in place that would allow for unconscious bias training, that would allow for recruiting practices that include questions and behavioral assessments around people's experiences, that would bring different lenses to our organization to help us think differently."

Though the council has only formally met five times, Borches said she's already applied learnings from the meetings to her business. One area that has inspired change? How to recruit employees from diverse backgrounds.

A hiring process preoccupied with previous dealership or general sales experience isn't enough to find fresh perspectives. Focusing on traits that convey an applicant's future ability to add value to a dealership is less clear but yields better results, Borches said.

"When you're looking at [hiring] through a growth mindset, you're looking at this potential applicant's capacity to take on new challenges," she said. "We are looking at their capacity to learn how much they're going to add value from bringing that different perspective into the auto industry and give us new ideas."

Another area of unconscious bias in marketing automotive retail jobs is contained in the words themselves. One meeting introduced the idea of gendered words and phrases in advertisements that alienate would-be applicants, Borches said.

"Our industry is not the best and proactive in recruiting," she said. "We wait till we need somebody, and then we tend to hire fast, and we hire through networks of people that we already know, which is not going to be the way that we're going to really create a new group of people coming into our industry."

Some DE&I staples, such as employee resource groups, work better for larger groups than smaller ones.

Borches noted that small or single-store dealership operations may struggle with finding enough participants. However, some ideas can be applied regardless of size or location. Changing the criteria for promotion is another area ripe for disruption, as is conducting more intensive exit interviews to determine whether employees are leaving because of inclusivity issues. Taking care to interview all interested applicants for a position, rather than fast-tracking promotions, is another.

"We are starting to measure that when we have an opportunity to promote internally, making sure that we are looking at a pool of candidates and not making a decision prior to looking at all potential candidates," Borches said. "We are slowing that process down, making it more intentional so that we can be sure that we are offering equitable opportunities for promotion across the organization."

For many reasons, the pandemic year inspired social and financial change in the automotive industry. As dealership groups contend with ongoing inventory shortages, focusing on the chronic talent shortage in dealerships is key to surviving the changing retail landscape. How companies responded to employee concerns over their mental and physical health, the civil disruptions and increasing racial violence in the country last year will leave an indelible impression on the workers who experienced it.

"Crises always bring out flaws in culture and flaws in leadership," Ford said. "How they took care of their people — ignored or disregarded their people — the flaws really came shining up." For the industry to survive this crisis — and the next one — cultural change is nonnegotiable, she said.

"If we keep chasing everybody who's after a paycheck, it's not a talent pool. It's a talent puddle," Ford said. "We can't attract the talent we need if we can't keep the talent we need."