Human Capital: The Backbone of Successful Dealerships

If you were sitting across from me and I told you that your automotive group could be your region's most influential and proactive group, would you believe me?

Often, the most impactful manager at the dealer is the Used Car Manager, followed closely by the Service Manager. The Used Car Manager plays a big role because they need in-depth industry experience and the ability to anticipate upcoming trends based on factors like the time of year, tax season, summer vacations, manufacturer recalls, and many other metrics. This foresight is key to maintaining the right inventory at the right time.?

However, there’s a department that often flies under the radar: Human Resources. During my time at the N.A.D.A. academy, we covered everything from financials to service, parts, new and used cars, leadership, and compliance. Yet, the crucial importance of human capital, the backbone of any successful dealership, was barely touched on.

Human capital is the most important asset to any successful dealership or dealer group. A strong HR team can attract better talent and enhance communication while shaping your company's vision and operations through a comprehensive training plan.

If you want your dealerships to run like the well-oiled machines they are, then setting a high standard is essential. Here's what an HR team can effectively manage:

1. Recruiting and Staffing
2. Centralized HR
3. Training and Development
4. Performance Management

Each of these elements adds value to your company and brings immense value to your staff and you. How many of the four listed above does your company actively engage in?

Recruiting and Staffing

This is crucial for any dealership. Each one has unique roles that need specific talents. Here’s what this department can handle:

• Understanding Needs: HR needs to conduct detailed job analyses for each position to identify the necessary skills, qualifications, and responsibilities before recruiting. This ensures that job postings are accurate and attract suitable candidates.
• Feedback from Department Heads: Regular consultations with department heads can help identify current and future staffing needs and ensure that recruitment aligns with each dealership's strategic objectives.

Centralized HR Department

The HR department is crucial in any industry, and it's the hub for all staff-related queries and often steps in to fix issues caused by others guessing at policies or procedures.

• Unified Payroll Processing: Centralize all payroll operations to ensure timely and accurate salary payments, including commission calculations for sales staff. Automation can help avoid errors and save time.
• Benefits Administration: Manage all employee benefits through a single platform, simplifying enrollment and management and ensuring consistency across all locations.

Training and Development

• Tailored Training Modules: Design training modules that cater to the specific roles within the dealership, such as sales, service technicians, customer service, and administrative staff. Ensure everyone is up-to-date on the latest automotive technologies and sales techniques.
• Blended Learning Options: Offer on-site training sessions for hands-on experience, which is particularly important for service technicians, and develop online training modules that employees can access at their convenience.

Performance Management

A Performance Management system is essential for maintaining high standards and ensuring employees' efforts align with the company's goals.

• Define Clear Performance Metrics: Establish specific, measurable, achievable, relevant, and time-bound (SMART) goals for each role.
• Regular and Structured Evaluation Processes: Implement a regular schedule for performance evaluations, encouraging ongoing feedback to promote continuous improvement.

That's quite a lot to take in, isn't it? The information provided here is just a glimpse of what the department can do. When managing multiple locations, you encounter a vast amount of data daily. Why not harness this data to make impactful decisions? Properly analyzed, this data can help you identify and eliminate ineffective processes.

Invest in the HR Department. If you currently have one, what can they do differently? Where are the gaps? What data are you not collecting? We all can improve and get better at something. This is a part of the business I am going all in on. It comes before everything in the dealership.?

If you've read this far, thank you. If you've learned something new, I encourage you to apply it. Leverage your Human Resources department beyond its current use. It stores some of the most crucial data you possess. When you show genuine appreciation to your staff, they will likely reciprocate that appreciation toward each other and the customers. People want to feel valuable and valued.