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.