Dealerships are linchpins of their communities and as COVID-19 caused widespread hardship, dealers stepped up to help in myriad ways. From taking lunches to local hospitals to sourcing personal protection equipment for first responders, they were there when they were needed.
They also took care of their employees. While of course people remain worried about their health, the pandemic has caused widespread anxiety on another level as well – job security. Some dealers went to extraordinary levels to alleviate their staff’s worries about both their health and their job security. Given the importance to a dealership of keeping good staff, what was the right thing to do from a human standpoint was also good for business.
Wyatt-Johnson Automotive Group in Tennessee already has extremely loyal employees. The average tenure of staff at its dealerships is 6.2 years. Its general managers’ average tenure is more than 13 years. That’s because the family-owned group shows its employees how important they are to its operations with perks such as longevity bonuses for sales and service employees and trips to Mexico for top F&I and sales managers.
“If you have happy employees that are here for a long time, you are going to be able to perform a better service for customers long-term” Wyatt Johnson Dealer Principal Katherine Cannata told The Presidio Group.
When the dangers of COVID-19 became apparent, Wyatt-Johnson sent home any staffers with high-risk factors, including those over 65, for a month on full pay, said Cannata. It also created teams that worked only half shifts but were paid full time. The sales teams received “significant bonuses that made them whole,” said Cannata.
Not knowing what the future holds during a time of crisis is also very stressful, so Cannata started sending out a Friday afternoon voice text letting her staff know that Wyatt Johnson had been there 70 years and it wasn’t going anywhere.
“Our top priority is maintaining longevity in our staff,” said Cannata. “Through we made sure they were safe, paid, and communicated to. It is amazing how much people want to know what is going on.”
Her group was also active in the community, taking individual lunch boxes to nurses at the local hospital.
Wyatt Johnson’s extraordinarily long staff tenures is a rarity in the dealership world. The Cox 2019 Dealership Staffing Study found dealership staff turnover reached 46%. For sales staff, that rose to 80%. The cost of such rampant turnover is high, including hiring a replacement, training and onboarding, and lost productivity, says Cox.
That’s why Dream Motor Group spent 90% of its time making sure it put its people first during the early days of the pandemic, said CEO Joe Agresti. “What may feel philanthropic has a string of sanity,” he told The Presidio Group.
On March 14, Dream Motor Group sent all of its higher-risk employees — some seven to nine percent of its work force — home on full pay. Understanding that even those not in the high-risk group where distraught and emotionally upset, the group decided to let them work four-day weeks and paid the hourly and salary employees full pay, while offering a unique bonus plan to commissioned employees that guaranteed 85% of their average and the opportunity to make as much as 130%.
Still, with business down 40% “we had a lot of people standing around,” said Agresti. So Dream Motor decided to offer free maintenance to people negatively impacted by the pandemic. “Nothing feels better for someone than when they are engaging in an act kindness,” said Agresti.
He also saw opportunity in the crisis. Dealerships have a hard time finding and keeping good service techs. “I called my fixed ops director and said, ‘let’s hire some folks,” said Agresti. “There will be a time when we need them.”
He was able to keep staff on at 100% pay because of a shrewd business move that also helped first responders obtain personal protective equipment. Agresti learned that U.S. lobster exporters were being paid a fraction of their normal price for lobsters exported to China because of lack of demand in the U.S. due to restaurant closures. He negotiated to pay the lobster exporters’ shipping cost if they agreed to bring back PPE from China.
He has donated 150,000 masks to various organizations. But he is also selling some of that PPE to customers including the Atlanta Falcons. “The goal was to make sure we could pay our employees,” said Agresti.
Dream Motor went back to regular pay plans for the first pay cycle in June, but high-risk employees are still at home with full pay for “the foreseeable future,” Executive Vice President Randy Powell told The Presidio Group.
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The Presidio Group provides M&A advisory services through its wholly-owned investment bank, Presidio Merchant Partners LLC, Member FINRA and SIPC.