Opinions & Advice

The Dealership Hiring Dilemma

Finding Sales People to work 60 Hours a Week?

A Sales Manager asked me the other day, “why am I having such a hard time finding salespeople who want to work 60 hours a week?” For those of us who have lived much of our lives in and around a dealership, 50-60 hours a week may seem like a common work environment. But I started asking myself a serious question like “why should anyone have to work that many hours?”

Many dealerships haven’t changed much over the years. We still pay salespeople strictly on a commission basis, we still feel like by hiring them we own their lives, we still have trouble hiring professional people, and we still expect the ones we do hire to be successful on their own. I know there are a lot of reasons we haven’t changed our philosophy for how we run our sales department, some of them even logical. But you would think after all the years the auto dealership has been around we could have come up with a better way of hiring and handling our employees.

The Commission-Only Structure

When I first started selling cars in 1979, I was making 50% commission with a $100 pack. I was getting 10% of the Life, Accident and Health premium since we didn’t have Finance Managers back then. I was also getting $50 for every Extended Service Contract I sold and $75 for every Rust, Paint and Fab. Even though we were entering what I considered a depression, I was still capable of making an excellent, high paid living. Then the Dealer started realizing how much the salespeople and Sales Managers were making and started cutting our pay. Now we have salespeople making 20% commission with a $500 pack, and though they may be going into holdback, it’s still tougher to make an above average living.

Adding to the decrease in pay structure, we also have the manufacturers cutting dealer profits adding to lower grosses. It’s hard to believe a dealer will spend $17,000 to buy a car only to make $600 gross profit. I can charge $349 for one of my training programs and net $320 profit. Something went terribly wrong along the way in our industry. Prices kept going up and profits kept coming down.

Along with the possibility of less income, we’ve taken away demos and cut benefits, which was one of the most attractive aspects of being an auto salesperson. I know we’ve tried salaried salespeople and one-price selling. We’ve toyed with salary plus commission and minimum wage. Since the majority of dealerships still use commission-only pay plans and vehicle negotiations, apparently the above ideas never worked.

The Hiring Dilemma

So under the current pay structure, we now have to hire salespeople to sell our vehicles. Who do we get that are answering our ads? Are professional people coming into our stores to sell cars? Do we see many salespeople who were making $5000 per month plus a commission from other industries? How about talented women? Or are we getting warm-blooded, out-of-work young people who are having a hard time finding any kind of work with the promise of high incomes?

Most professional people, especially those that have families would rather not work in a commission-only structure, especially when their previous jobs had some sort of descent salary. Families who are used to some sort of salary like to know how much money is coming in every week so they can determine their budget. Not knowing how much money will be made, or if any money will be made that week puts a lot of stress on a family. I also know there are commission-only families who are doing quite well. But I have to believe that these are salespeople who have been in the business for a long time and have built an outstanding repeat and referral business. They are the cream of the crop.

Women are desperately needed in our industry. Seldom have I seen a female salesperson who didn’t do well selling cars. They actually have a knack for the business. I don’t know what the current ratio of male to female salespeople is, but I have to believe it’s close to 10-1. Why isn’t our sales department an attractive place for women to work?

We’ve tried split shifts and letting salespeople come in at noon when they have to work late. We make them work two to three Saturdays a month instead of four. I’m sure someone has even tried part-time help so that their salespeople could have more time off. Companies like Microsoft and Google provide their employees with free food, free daycare, free laundry, free exercise, flexible hours. Homestead Technologies in California wishes everyone a happy birthday by giving them the day off with pay and a $100.00 gift card to spend on themselves! For employees who stay with the company for five years, you are given a four week sabbatical earning all but a 1/3 of your pay. In addition to all of that, there is the all expense paid yearly retreat, with a cabin in Lake Tahoe available for a very small rental fee. New Belgium Brewing in Colorado gives its employees a free case of beer every week. Now, I’m not comparing these companies to a typical auto dealership, but maybe they know something about the value of employees that we don’t. I wouldn’t expect a dealership to provide these services, but why not day care for salespeople and managers who have children. I got to believe that going into the nursery to give their kids a hug or figuring out a way to provide higher salaries for salespeople, or maybe hiring part-timers to give salespeople more flexibility and time off would surely be a benefit. I don’t know if it’s possible, but that sure would be a great place to work.

So What’s the Solution?

I truly don’t know. I’m writing this article because I’m frustrated not knowing. I’m sure we must have tried everything under the sun over the years. It must have all failed because most sales departments still run under the same structure they always have. But there must be a better answer if we want to attract professional people in our industry. All I know is that salespeople and managers should not have to work 50-60 hours per week. They have lives and families outside the dealership that have to be nurtured and cared for. Auto sales is a stressful enough job by itself. Adding even more stress to a family life does not make for a productive, long-term employee.

As a disclaimer, I know we have a lot of great salespeople and managers, both male and female in our dealerships making a lot of money and providing their families with an excellent life. But I have to assume that the 80/20 rule still applies. We have 20% of the salespeople doing 80% of the sales. These salespeople and managers are the cream of the crop and are not the ones I worry about.

What is your dealer doing different to attract new professionals?

  • M
    Matt Watson
  • August 14, 2010
Can you imagine how different it would be if car dealers were only open for sales Monday to Friday 8-5?
What an awesome article and it hit the bullseye! I don’t know the answer either but I guarantee that almost everyone in retail auto sales – professional or not – feels the same way about the crazy hours and, as you say, the hours are certainly a deterrent as is the fluctuations and uncertainty in income for most people. I’ve seen many a good salesperson quit because of the stress this profession puts on their family lives. Well said!
I watch/listen to at least one TED talk(TED.com)a day. There&rsquo;s an article in this month&rsquo;s Fast Company about TED that you can check out online <a href="http://www.fastcompany.com/magazine/148/how-ted-became-the-new-harvard.html" rel="nofollow">http://www.fastcompany.com/magazine/148/how-ted-b...</a>. Their website is subtitled, &ldquo;Riveting talks by remarkable people, free to the world&rdquo;. The goal is an 18 minute presentation. Some go a little longer and some are shorter. They tend to take up my lunch break.

There was a great talk on the science of motivation from career analyst Dan Pink. I&rsquo;m re-listening to it in the background as I type.

The point is, the way we incentivize, compensate, and motivate folks in the car business has been proven NOT to work. Scientifically proven not to work.

The examples Mr. Pink gives don&rsquo;t correlate all that well with the car business. If you watch the video you&rsquo;ll find that where there is a clear cut process, rewards work fairly well. Anytime you&rsquo;re asking for thought, for things like developing new processes, our traditional reward system doesn&rsquo;t work nearly as well.

I don&rsquo;t pretend to know the answer and I&rsquo;m not sure if the answer can be found in Mr. Pink&rsquo;s video. I do know that it gives tremendous food for thought.

<a href="http://www.ted.com/talks/lang/eng/dan_pink_on_motivation.html" rel="nofollow">http://www.ted.com/talks/lang/eng/dan_pink_on_mot...</a>
Mike Mike Mike! Dead on-

Problem is that until we stop looking for the pixie dust in pay plans, benefit packages, hours and perks and look and are prepared to get honest with ourselves we will keep doing what we have been doing- (the insanity saying applies here)

The solution is to make sure that we hire, place and hold accountable MANAGEMENT in a dealership- and not just accountability on the $$$$ but accountability from management to make sure that they are truly managing and developing their people.

When was the last time you were in a store where they had such a process in place? 1 out of 10 has been my experience.

People primarily do not leave jobs because of pay, hours and benefits- people leave jobs because of PEOPLE- THEIR SUPERVISORS AND MANAGERS...we attract what we attract less than desirable applicants because we have defined ourselves as an industry that will hire just about anyone- therefore just about anyone applies. They are then treated like the &quot;anyone&quot; they believe themselves to be and the &quot;anyone&quot; we will hire. Vicious nasty cycle. Treatment of people ( and the poor way in which we have done it) is what has made our stores in most cases a dreaded experience for buyers and unfortunately a less than desirable place to work for professional qualified employees.

Body Rule For Hiring:

If you hire &quot;anybody&quot; and treat them like a &quot;nobody&quot; it affects &quot;everybody&quot;!

Until we take a look at this and make the necessary changes from the top on down we will be struggling with this

Nice to see you here Mike!

I love it. I struggle with the same questions everyday. I am in a dealership and have struggled with this for years. I am so happy to see that you are addressing it. It will take a complete overhaul of the automotive business to make this happen. Great start!
Mike - fantastic article!

It is definitely one of those &quot;tell me something I don&#039;t know&quot; things, but it is also nice to see it in writing. And you did a great job on writing it.

We are going to have to change. Either we will have to adapt the one-price approach and accept a regular merchant&#039;s employment model (Best Buy, Sears, etc) or start putting more emphasis into our current model.

The Internet is fueling accountability through online reviews, social media chatter, and simple individual empowerment. Our vendors are supplying tools, like CRM, that help us to understand where we are falling short. I believe that these things are going to significantly change the current model for better or worse.

Thanks again Mike!
Great article.

I believe the solution is to *not* hire any sales professionals at your car dealership.

The whole sales department needs to evolve into the building relationships department so your dealership knows who&#039;s coming and when to buy a car.

There is a great book called The Referral Engine that should be required reading for dealerships wanting to understand the most effective way to sell cars. It basically says that when you refer others and build your network people regard you as a valuable resource.

Also, every salesperson should communicate online - have an individual fan page, specialize in a particular model or class of vehicles, or even target a demographic and learn how to communicate with these groups.

Want to sell electric vehicles - post information about them online, pictures, pdfs, brochures, etc. Answer questions, pose questions on forums, etc.

Want to sell high performance vehicles - take some videos at the track with the car, hold real wrench sessions at the dealer, bring in known racers or local engine builders and hold an exclusive event.

Give The Sales Professional A Purpose

Create a senior sales professional level and only give this position to one person per dealership. This position would be considered to have &quot;Congressional Medal of Honor&quot; type status. This person is someone who has researched every name in the dealership CRM and determined which customers have blogs, on Twitter, and could potentially influence their audience.

This senior sales professional should only be required to keep 10 relationships with influencers because these influencers have audiences, they could be radio show hosts, or big local bloggers, etc. The main role of this position would be to network, and introduce, refer, interview or be interviewed, etc.

When anyone comes in to the dealership from their network its by appointment, and because they were invited there is a specific agenda which includes meeting the heads of each department, before even looking at the cars. Then when its time to look at the cars they&#039;re all presented in a row, each model from base to loaded and they can walk from one to the next.

Now, what happens when other people browsing the dealership? They are curious, and want to know why this person is getting the red carpet treatment. And the response, &quot;these are people active in social media - bloggers - influencers so to speak&quot; and they want to give them a remarkable experience.

They get to join us in our suite at a baseball or hockey game, they can come to all our premier events and annual parties.

Word will quickly get out and soon this dealership will become the dealer of choice for local bloggers and influencers.

When this person who&#039;s been exposed to this leaves the dealership, they&#039;ll have something very visual to take with them. Perhaps they have a blog and decide not only will they buy a car but they&#039;ll want to refer others.
  • D
  • September 1, 2010
I think the best solution is a rotation schedule. One week on 40 with two days off in a row and the following week 50-60 with one day off. People need two days off in a row. Another solution is to maximize hours the dealership is open cutting back on hours on days that are slow and expanding on days that tend to be busier. I know at our dealership Tuesday &amp; Thursday evenings we could close earlier without much impact to business at all. This out of the box a little also by having your salespeople actually work their client base more efficiently I know we lose business as Sales does not follow their clients well enough.
This video fits this &quot;work too much&quot; theme

<a href="http://www.bobparsons.me/index.php?ci=14967&amp;id=-1&amp;targetGuid=610857a5-1153-4b4d-819f-96fcbb0f7a0b" rel="nofollow">http://www.bobparsons.me/index.php?ci=14967&amp;i...</a>
  • S
  • September 8, 2010

The only part about your post I disagree with are the hours..


Most people at my dealership work 60-70, and the managers are doing bell/bell (8AM-10PM) 6 days, I had 97 hours last week.

It&#039;s a horrible situation to be in, and I am trying to hire the right people so the work load can be distributed.. But for now its: Wake up, go to work, come home, go to sleep -

This is literally my life. My one day off I spend catching up on rest.
We used to struggle with this but now have a plan that works. As of last month, we are closed Sunday and Monday. Ok, my competitors are open but you know what I have attracted the best talent in the valley so my salespeople will outsell them any day. My people come back refreshed and happy because they got some time with thier family that they work so hard for. By the way, this idea came from a salesperson which most other dealerships I know would never ask the employees what they wanted, why not? Not all of the ideas are bad. Has it affected sales? Nope, up 37% on the year and keep climbing. We do a potluck lunch every Saturday and we really enjoy each other as a team. The pay plan is a flat on every car because most of our deals are sub-prime and they take A LOT of work. We give them time off when they need it and don&#039;t make them feel bad about it. No one has taken advantage of this either. Our salespeople are happy and we have people from other lots wanting to come on board just to have the freedom to have a life. If you want to say you are going to hire sales professionals then treat them as such and listen to what they say. You don&#039;t have to do what they say, but some ideas might just suprise you!
Thanks for all your replies. Sorry I haven&#039;t commented on them, but I&#039;ve been busy training a bunch of new hires.


I&#039;m from the Detroit area, and at one time all our domestic dealership used to be closed on Saturday and Sunday. It really was nice to have every weekend off. But then the imports came in and opened on Saturday, so slowly but surely the domestics followed. I&#039;m sure in order to go back to those days, all the dealerships would have to go into collusion, which you know won&#039;t happen. Thanks for the reply.


Stress certainly is a problem, especially with manufacturers cutting dealership profits and the economy being what it is. But those that make it are the ones who &quot;run their business like a business&quot; and plan for how they want their business to be 5 and 10 years from when they start.


You&#039;re right about the way we incentivize, compensate, and motivate folks not working. Many Managers I&#039;ve seen truly do not know how to motivate their staff. They rely on the &quot;self-motivation&quot; concept. But I think we&#039;ve all learned that in order to have motivation work, and individual has to want make the necessary changes to reach another level of sales. But as Managers, all we can do is keep trying and hope that some of it takes. Thanks for the info on the video.


For those of you who don&#039;t know Wendi, she is the consummate &quot;Hiring&quot; expert. She has written a book on hiring that has received wide acclaim both inside and outside of our industry. And you&#039;re right about hiring the right management to develop their people. Often salespeople are just thrown on the floor to sink or swim. Keep preaching the word Wendi!


You keep trying to figure things out. It will take a huge effort from everyone in this industry, but first, they&#039;ll need to realize there is a real problem here. Keep thinking about it.


These tools you speak of are definitely helpful. But I&#039;ll go into dealership that have these tools and ask questions like, &quot;do you keep statistics? And they&#039;ll respond yes, we keep statistics on just about everything. Then I&#039;ll ask, &quot;what are you doing with them? And they&#039;ll respond, &quot;nothing!&quot; Many dealerships don&#039;t take to change very easily. But those that realize that the internet and tools is their next step sales and profitability, the better off they&#039;ll be.


I really like your comment. It was professional and well thought out. I tell salespeople all the time that selling skills alone will not take a salesperson from one level to the next. It&#039;s all of the things around selling skills that they have to do. Tony Robbins said, &quot;successful people do all the things unsuccessful people don&#039;t want to do.&quot; Isn&#039;t that true! Keep writing Scott, you do it well.


I think salespeople need two days off in a row also. We work in such a &quot;high rejection&quot; business that the mind and body need to recoup. I&#039;m glad you have a plan that works for you and your dealership.


I haven&#039;t had a chance to watch that video yet, but when I do, I&#039;ll give you a special comment.


I feel for you Shawn. No one should have to work that many hours and not have a life outside the dealership. I hope you don&#039;t burn out. BTW, I only used the 50-60 example because that&#039;s what that Manager said. I know there&#039;s tons of salespeople and managers who work a lot more than that. Take care of yourself.


Congratulations on finding a system that works. We had a dealership here in the Detroit market that got rid of all by 5 of their top salespeople, got rid of all but one of their Sales Managers, and got rid of the Finance Manager, invested in computer technology, got everyone Blackberry&#039;s so they could answer phone-ups on the lot, gave them all the tools to do their jobs easier and better, and increased sales and profits with over half his staff gone. I like the way you take care of your people. It was a great comment and I hope you keep writing.

Thanks again to all who commented.
  • S
  • September 10, 2010

Thanks for the compliments, I really appreciate that.

The fact that you came back and replied to every single comment here certainly speaks highly of your interest to find a real answer to this problem.

Ironically, I believe the answer is much simpler than we expect.

Make everything predictable from the sales experience to the service experience and that will take away any hesitation one may have in doing business with a dealer.

At that point it is simply facilitating the sale and ensuring that needs are met and followed up much like how you did here in this post.

The more we complicate the process with unclear processes and inaccurate estimations the less confidence one has and trust has been comprimised.

However, having a relationship with a customer prior to them coming to the dealer means that trust has been established and I would imagine the deal closes much faster.
Believe or not, they ARE in Michigan! I&#039;ve called for dealer trades and they&#039;re only open late one night per week (if any)! Some aren&#039;t open on Saturdays either. Indiana has a law against a new car dealer selling a car on Sundays. SOME places &quot;get&quot; it. Here in Greater Cincinnati, we have about 25 just FORD dealers....

  • N
  • November 2, 2013
@Erika Jones honestly having 2 days off a week sounds appealing and if I was in the area could be a convincing factor to make me come on over. After being in this business for 6 years its no longer about chasing the all mighty dollar (don't get me wrong I enjoy those $20,000 pay checks and still go after them) however I also want a life.
  • N
  • November 2, 2013
@Shawn I wouldn't do it I consider the 55 I do now to be a bit too much. So if you came to me and offered me a job at 60-70 hrs a week I'd decline.
  • N
  • November 2, 2013
@Rob Ernst See thats insanity and it creates a very hostile environment. Why do you need 25 ford dealers
I was very pleased to discover this web site. I want to to thank you for
your time for this particularly fantastic read!! I
definitely appreciated every part of it and i also have you saved to fav to
check out new things in your web site.