[Author: Will Rogers, 05.20 | Keyword: Recruiting, Workforce Development]
I know this is a difficult time for you and your business. At the same time, we will get through the COVID-19 pandemic and life to return to a “new normal” in the weeks and months to come.
One of the things that will likely continue to be an issue for nearly every employer is the ability to find the right employees for your business. Based on dozens of conversations I’ve had with members over the past 12+ years, recruiting the right workforce remains one of the biggest concerns in the equipment industry.
Equipment dealers across the country have implemented a variety of approaches to help recruit their workforce. Here ís what some members are currently doing:
- Recruiting high school and college students for full-time positions and internships
- Posting job openings on the internet, websites and social media
- Utilizing a professional recruiter, headhunter or staffing agency
- Posting “now hiring” and “help wanted” signs on the property
- Advertising in publications, including newspapers
- Recruiting from other employers (poaching)
What is one of the most under-utilized tools in your dealership’s toolbox? Your employees. Turn them into recruiters for your dealership workforce and you may be pleasantly surprised with the results.
The United States Military has effectively done this for years, incentivizing recruitment efforts by providing promotions, pay increases, bonuses or paid time-off to enlisted personnel who help identify new recruits. In using this approach, the military has basically turned every soldier or sailor into a recruiter.
Several dealerships are currently trying a similar approach with great success, especially as it pertains to recruiting service and repair technicians. Here are two examples:
- In 2019, a large dealership group set a goal of a net gain of +2 service technicians per location for the calendar year. As part of their efforts, the dealership group incentivized reaching the goal with a reward of a free trip to Cancun for every member of the service department. At the end of the year, the dealership group had a net gain of 33 new service technicians.
- Starting in 2018, a large multi-state dealership group set a goal of a net gain of +70 service technicians for the calendar year. As part of their efforts, the dealership group incentivized their employees to serve as recruiters by providing a referral, hiring and retention bonuses. Since then, the dealership group has hired dozens of service technicians based on referrals from their current employees.
The first step when developing a successful employee-recruitment program is to get rid of the “I can’t afford it” excuse. Let’s do some math based on some simple figures. Start with a billable shop rate of $100 per hour and multiply that by a goal of 1,875 billable hours per service technician, for a total of $187,500 dollars of income. Add the number of parts and supplies sold through the repair work being done by a service technician or $100,000 of income. Finally, add the value of additional products (new and used whole-goods, parts, supplies) and other ancillary services sold through a dealership (transportation, agronomy) of $25,000 to $100,000. This comes to a grand total of $300,000 to $400,000 in economic activity per service tech, per year.
Here are a few examples of what your business could potentially lose in economic opportunity each year:
- 10% net margin = $30,000 to $40,000
- 20% net margin = $60,000 to $80,000
- 30% net margin = $90,000 to $120,000
If you have a vacant service position, you could easily be missing out on five figures of net income. Multiply that figure by 5, 10 or even 20 years, and the impact can be in the millions. Again, get rid of the “I can’t afford it” excuse and replace it with “I can’t afford NOT to” as your motto for providing incentives and bonuses to your employees who help recruit your workforce.
One dealer confessed that before he started incentivizing recruiting, he viewed his service department as a necessary evil. However, when he realized just how much his return on investment was for paying bonuses to his employees, he couldn’t justify not having a program to reward his employees.
Here are just a few ways to encourage your employees to help recruit new workers:
- Build an effective referral program and promote it to your current employees. Communicate the rewards for helping recruit a new employee.
- Take away any fear employees may have regarding a referral that doesn’t work out. Not every referral will become a great hire, so be thankful they are trying.
- Encourage your employees to spread the word. Require them to put “We’re Hiring” in their email signature and ask them to mention it to customers, vendors and more.
- Ask employees to mention job openings on their personal social media, including Facebook, Twitter, LinkedIn and more.
- Say “yes” to speaking opportunities. If your employees are asked to speak or represent your company at a local school, community event, etc. ask them to mention that you’re looking for new employees.
Building a successful program may not be the easiest thing you do this year, but it might just be the most rewarding. And remember, if you don’t – your competitors will.
For nearly twelve years, Will has advocated for our members on both the state and national legislative fronts and has led INEDA’s educational efforts. In his free time, Will enjoys “dabbling” in politics, gardening, spending time with his wife and daughter, and managing his ever-growing collections (U.S. postage stamps, beer cans, comic books…).