Power to/from the people!

We’ve been looking over recent months at people issues, particularly in the context of the challenges faced by dealer groups, and the role of the HR department.  People are always at the heart of an organisation but there are three particular areas where dealer groups face specific challenges today.  ICDP consumer research shows that the people with whom a prospective buyer interacts at the dealership are the most influential factor on their purchase decision, but omni-channel trends means that the type of people employed in dealerships has to change from dealmakers to information providers.  Repairers of all types are under huge pressure due to the lack of sufficiently skilled technicians even for traditional products, let alone for new technologies, systems and materials.  And making better use of data is going to be critical to get efficiencies throughout the dealer business, but despite the likelihood of better analytical tools and AI to do some of the heavy lifting, you still need smart people to apply those tools and staff across the organisation need to be comfortable in using the data to inform their decisions.

All of this combines into a series of questions related to whether a dealer has the right people, is managing them well, developing existing staff appropriately and making the tough decisions to part company with those who are unable or unwilling to make the transition.  These are all areas where the HR department plays a key role in supporting line management but one where we still believe that many dealers lag behind where they need to be.  What is the role of the HR department and does it need to evolve itself in order to help the organisation as a whole move forward?

When we last looked in detail at this area some years ago, we could see a transition as HR professionals – many with a background outside automotive retail – were being brought into dealer groups to add a professional focus.  There was a recognition that leaving line managers to recruit, mentor and terminate staff was leading to sub-optimal decisions with limited diversity by any measure, high staff turnover and in some cases legal exposure.  The actual approaches used to involve HR varied with some in a supportive role to line management whilst others took the primary responsibility working in consultation with the line managers.  However, it was a step forward and has evolved further as more attention is being paid to the general well-being of staff physically and mentally, and recognising the importance off work-life balance and sustainable earnings.

In more recent discussions what I have seen emerging suggests that best practice is entering a new phase.  The practical differences are arguably quite subtle but the mindset difference is fundamental, and I believe that the consequences in terms of widening the gap between the industry leaders and the average dealer are significant.  The mindset difference is in terms of focusing on making the most of the human capital inside the organisation rather than administering processes which support the management of the human capital.  They are the performance coaches of the dealer group, tasked with getting the team to the top of the league.  They ensure that the team has the best players in the squad, that each individual within the dealer group is in the role that is best suited for them, and that within that role they are performing as well as they possibly can.  If the organisational drag of individual under-performance could be removed, then there is the potential for a huge multiplier effect on business performance.

The application runs right through all stages of the employment cycle.  For example, at the recruitment stage not excluding people who cannot produce a well-structured CV or demonstrate a specific level of academic achievement, but be more flexible to judging applications on the content and what it tells you about the person rather than the fit with a preconceived expectation of how that is presented.  Similarly recognising that some academic gaps might need to be filled post-hire rather than exclude somebody from the process who otherwise demonstrates potential.  Once recruited, the difference would be in ongoing monitoring and enhancement of individual performance with a view to the company getting most from the individual and vice versa, rather than HR only intervening when there is a performance issue, with an almost inevitable assumption that it will ultimately lead to the employment being terminated.  As a final example, many dealers separate their handling of online sales enquires (email, phone, etc.) from physical face-to-face enquires on the basis that the required skills are different, so they have a handover from the digital to the physical team.  It seems a pragmatic and logical decision, but this is in conflict with our research that car buyers value consistency in terms of who they deal with.  One leading dealer group saw that this handover did not work, so instead they have a single sales team where the team members handle all types of interaction end to end.  To address the skills gaps where they exist, they have introduced a staged approach (described as like moving the employee through ‘arithmetic to algebra to physics’) to progressively build the skills and confidence in the employee to handle digital enquiries as well as they do face-to-face.

People are critical to the operation of a dealer business, and the largest part of the operating costs, so it is simple common sense to ensure that you get the best possible return from them.  Doing so not only helps your business, but will help them in terms of job fulfilment, earnings and growth.  The battle cry for your HR department now has to be – Power from the people!