Staffing

[CroweChizek]

Salaries and wages are such a large portion of dealership expenses. Excesses, inefficiencies, and low productivity can dramatically reduce the bottom line. Is overstaffing or inefficient staff an issue, and if so how is it addressed? Is staffing left entirely up to the department managers? Is there an analysis of the dealership staffing as a whole as well as by individual department?

[mh]

Dealer is involved here in all staffing issues and takes them all to heart. Staffing expenses reviewed closely every quarter and we are always aware that perhaps an employee that is underperforming in their current position may be better suited in another department. We have 2 or 3 people that were stars after department switch.

[dcreamer]

This can be a complicated discussion but one rule of thumb is 6500 gross per employee both departmentally and over all. If expenses are in line and wholesale losses and write off's from receivables are being controlled that gross per employee should produce a nice profit.

[fburrows]

CroweChizek:

You are correct that the most important factor in controlling expenses is having the correct number of people to get the job done efficiently. The perfect opportunity to review each job is when any employee leaves. Instead of automatically searching for a replacement, this presents a great opportunity to review if this function can be broken up and reassigned to others or can this department be rearranged to reduce personnel expenses. Taking on additional duties is a lot easier to sell when a small raise accompanies it.

I always felt that it was a whole lot easier to have the minimum number of non-productive people and pay them well. This way you have your personnel expenses under control and since existing staff is well paid you keep your turnover to a minimum.

I am always amazed that when dealerships look to reduce expenses they overlook the biggest expense and start looking at stuff like office supplies. The amount of unnecessary overtime in a week probably exceeds the total possible savings in office expenses in a year.


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Frank Burrows ABS
fburrows@absdata.com

[IndianaCarMan]

Dont get short-sighted on just the bottom line. A smooth, efficient, and productive staff also maintains customer satisfaction and loyalty after the sale or service experience.

Late titlework, long wait times for the cashier, poor phone handling, and other deficiencies will undercut any amount of savings with a rise in policy and advertising expense to appease and acquire new and current customers.

A certain amount of overtime is still cheaper than having to hire more employees, train them, and insure them or worse yet, let the business slide downhill.

Optimum staffing with good people is the intelligent way to trim-the-fat. In the words of Joe Gibbs, you win with people.

The car business is too varied and changes too often to have a hard-line rule on staffing. Use your business sense, be involved with employees, and you will know the adequate level for your organization.