| What are the real costs of a salesperson's turnover | | | | probing questions. That's another 3 hours. |
| at a dealership? They're a lot higher than you might | | | | 9. Time to check references. Assume that you check |
| think. | | | | 3 references for each of the top 3 candidates. That's |
| First let's look at the sales person who just left. | | | | 9 reference checks at 20 to 30 minutes each. |
| Even an average performer probably sold some cars | | | | Perhaps the sales manager delegates this job to |
| and possibly developed a relationship with his or her | | | | someone else. It will still take another 3 to 4 hours of |
| customers that could have been a source of referrals | | | | time for reference checks if it's done right. |
| and repeat business. Losing a top performer can be | | | | 10. Say that two of the top three candidates' |
| far more costly in terms of lost sales. | | | | references check out. Time for a second conference |
| Now let's see what is actually involved step by step. | | | | to decide which of the two finalists to choose. |
| | | | Another 30 minutes for both managers. |
| 1. The sales manager writes an advertisement to | | | | 11. Hiring time! The sales manager will want to call |
| attract potential sales people. That can take from 20 | | | | the successful applicant to offer him or her the |
| minutes to find the old one to 1.5 hours to write | | | | position. That will take another 30 minutes to 1 hour. |
| something new and attract a better candidate pool. | | | | In all, the hiring process will take about 21 hours for |
| | | | | the sales manager and 5 hours for the general sales |
| 2. The sales manager calls the ad agency or | | | | manager to help screen, interview and do reference |
| newspaper or on line source to place the ad. Let's | | | | checks. Depending on your hourly rates, this can cost |
| say that takes 30 minutes to an hour or two, | | | | your dealership anywhere from $3,000 to $5,000. |
| depending on whether he or she is looking for new | | | | You can do the math using your compensation plan. |
| outlets to place ads. | | | | But there are more costs involved, both tangible and |
| 3. The sales manager has to screen the applications | | | | intangible. Let me ask you some questions: |
| to decide who is in the "looks promising" | | | | - Do you offer any starting salary while these |
| category-that can take 2 to 4 hours depending on | | | | "newbies" get up to speed or do you expect them |
| the number of applications. | | | | to take off and start selling vehicles immediately? |
| 4. The sales manager gets on the phone and initially | | | | How much does this starting salary cost you? |
| interviews the applicants prior to asking the best | | | | - Do you provide any training for your new sales |
| candidates to come on down. Say there are 6 to 10 | | | | associates or do you depend on their prior employers |
| qualified applicants. That means between 3 to 5 hours | | | | to have taught them all the skills they need to do a |
| on the phone, assuming time to get through to the | | | | great job? If your sales manager provides sales |
| individual and engage in conversation. | | | | training, how much does that cost you in his or her |
| 5. Now the applicant enters the dealership and meets | | | | time? |
| with the sales manager for about 30 to 45 minutes. | | | | - What are the hidden costs of not providing training? |
| Assuming 5 or 6 people are invited in, that takes | | | | How many customers will your new hires mishandle |
| another 3 to 4 hours. | | | | before getting it right? How many live prospects will |
| 6. Next the sales manager wants to get a second | | | | they lose to your competitors? If you "train as you |
| opinion from the General Sales Manager, assuming 4 | | | | go," will your new sales associates develop bad habits |
| or 5 of these people look pretty good. Another 3 to | | | | that are hard to break later? Will they become |
| 4 hours in all. | | | | demoralized due to constant criticism and leave the |
| 7. Now conference time, both managers sit down | | | | dealership before ever fulfilling their potential? Will you |
| and discuss who to bring in for a second | | | | need to start the cycle all over again? |
| interview-say 1 to 1.5 hours to discuss each | | | | |
| candidate's pros and cons. | | | | Now, add up all of the costs of hiring, training, and |
| 8. The sales manager may want to schedule a | | | | supporting new staff. Isn't it clear that there must |
| second interview with the top candidates to confirm | | | | be a better way! |
| the decision. Say there are 3 finalists at one hour | | | | Stay tuned for part 2. |
| each to explain the position in more depth and ask | | | | |