Avoid These Hiring Mistakes to Reduce Employee Turnover

It’s no secret that the employee turnover rate for certain positions in the auto industry is high. Why is this? In my career with Auto/Mate, I have interviewed thousands of job candidates, the majority of whom have car dealership experience.

It seems to me that many auto dealers keep making the same hiring mistakes…over and over. When you hire the wrong person, chances are that person won’t stay long. To reduce employee turnover and the associated costs, dealers would do well to avoid the following common hiring mistakes:

1) Hiring too quickly to fill a need

Dealers may associate an empty seat with lost revenue, but it’s important to realize that the wrong person in that seat could cost you much more than lost revenue! When the wrong person is fired or quits, there’s the cost of unemployment insurance and COBRA administration. If this person harasses or discriminates against a coworker or customer, you are left exposed to lawsuits. Then there is the time spent interviewing the hire, training them, managing them more than necessary, and repeating the process unnecessarily a few months later.

In fact, the average cost of turning over an auto dealership salesperson is $20,000 (not including the wages you paid them).

In addition there are the hidden costs of making a bad hiring decision, such as the cost of lost vehicles sales, cost of alienating customers, cost of low employee morale, cost of your reputation being affected, and more.

Have patience when it comes to hiring. Also be sure to hire people who are a good culture fit. I understand if you have a rock star sales person in front of you, you may want to hire that person immediately. But if that person’s sales style is aggressive and dog-eat-dog, and your sales environment is all about relationship building and team effort with a friendly attitude, that salesperson will not last long, despite the fact they can sell cars.

2) Believing what is on a candidate’s resume is true

It’s hard for many dealers to believe, but candidates lie all the time. They lie on their resumes and they lie during interviews. They lie about their abilities, achievements and experience.

The best way to fully assess each candidate is to establish a hiring process. First, form a hiring committee with three to five members whose judgment you trust. Formulate interview questions and check for inconsistencies in candidates’ answers. If their resume says they were a service manager, but they describe duties that closely resemble an advisor, then it’s likely they inflated their title.

Also, require that your top two or three candidates take pre-employment aptitude, skills and/or personality assessments. These are inexpensive, accurate tests that can tell you a lot more about a candidate than what is revealed in an interview. I also recommend that a unanimous “yes” by all hiring committee members is required in order for any candidate to be hired.

3) Hiring someone because you like them

This is similar to number two. You may have a great “gut feel” about a person and you may really like them and want to hire them. Just because someone is likeable, doesn’t mean they are capable of, or willing to do the job. Gut feelings can be dead wrong. Don’t skirt the hiring process.

4) Not properly vetting a candidate

Take the time to vet all candidates, even if they seem perfect on paper. In a survey of 3,100 hiring managers, 49 percent said they caught a job applicant fabricating their resume. There are even companies out there like CareerExcuse.com, that create fake companies, fake work histories and provide fake references for job seekers.

Ask every candidate for at least three references and state that two of them must be previous managers. Research to make sure they are legitimate managers at legitimate companies. Call and talk to the managers on the phone; sometimes you’ll catch a hesitation or inflection in the voice that you wouldn’t otherwise notice in e-mail correspondence.

You can gain a lot of valuable information from references. This year alone, we caught one candidate who submitted a reference letter on company letterhead, and when we called to verify with the dealership, we learned she never even worked there. In another instance, we had an individual who said that they resigned from a parts position, when in reality they were fired for theft and escorted out of the dealership in handcuffs. A little extra effort can save your dealership from being victimized.

5) Overselling the job opportunity

The top three reasons that people quit their previous position at an auto dealership (according to thousands of interviews conducted with former auto dealership employees at Auto/Mate) are:

“They promised I would make more money than I did.”
“They told me there was opportunity for advancement, but there were no opportunities in the entire year (two years, three years) I was there.”
“I got burned out.”

It’s critical not to oversell the opportunities in your dealership.

Don’t promise a potential salesperson they will make $120K if the average salesperson makes $80K. Don’t promise someone they can have weekends off if your staff is expected to work weekends. If you are interviewing a potential service advisor and he says he’s ready to be a manager, don’t promise that he’ll be a service manager within a year or two–unless you know with a high degree of certainty that you will have a service manager opening in the next year or two.

When you exaggerate opportunities in order to convince a candidate to take a job, that employee will feel duped in short order, and rightfully so. Chances are they will immediately begin looking for a better opportunity.

For information on how to create a successful hiring process, download our free eBook titled The Auto Dealer’s 10-Step Guide to Hiring the Best Employees. The eBook is available on Auto/Mate’s website in the ‘Resources’ section.