It’s still under construction at many dealerships
In the winter 2020 issues of Canadian Equipment Dealer and Western Equipment Dealer, Trent Hummel and Kelly Mathison write about the bench strength of future management prospects at many dealerships.
Hummel and Mathison are trainers with WEDA’s Dealer Institute and have worked with and coached all levels of dealership management, including senior managers, general managers and department managers. Both trainers suggest workforce development is a work in progress at many dealerships.
As a result of their work and feedback from other trainers and dealers involved in peer groups, the Western Equipment Dealers Association randomly polled CEOs, shareholders and senior managers who own and operate AGCO, Case IH, John Deere, Kubota, and New Holland dealerships to learn more about their state of workforce development.
The respondents are principals of 549 dealership locations. Forty-two percent have one to four locations, 18% have five to nine locations, 18% have 10 to 14 locations, and 25% have 15 or more locations.
“As dealership groups continue to expand, we wanted to find out how deep the talent pool is with regard to future managers,” explains John Schmeiser, CEO, WEDA. “While the survey results don’t indicate the pool is dry, it shows there is a lack of depth in some critical areas of today’s dealerships.”
The survey revealed that 39.7% of those polled have the necessary staffing to meet their future needs of senior and mid-level managers. That leaves a large chunk of dealers who either don’t have a strong core of future managers (46%) or question whether they do (14.3%).
When breaking down the needs by category, it’s not difficult to spot the “Immediate Needs” of the dealers who completed the survey. As shown in the chart on “Immediate Needs,” service managers are in great demand. There is also a lesser but still significant demand for store/general managers, parts managers and sales managers.
As one dealer wrote, “We need more training at the top levels.”
Wrote another respondent, “We feel the service manager role is the most challenging role in the organization and the most difficult to fill effectively. We have also found it challenging to replace sales leadership roles in an effective manner.”
One dealer also pointed out one of the problems faced by rural businesses. “Worker mobility to smaller rural centers is getting more challenging.”
Another dealer took note of a growing trend in all businesses. “It seems that there are fewer people who want the responsibility of managing employees.”
Perhaps the one comment that stood out was from a dealer who commented that staffing issues aren’t a problem – yet. There is “No immediate need,” he wrote, “but that could change overnight and it’s hard to prepare for that.”
The one thing business and industry had in common during 2020, they all had to adjust to the unexpected and the dealer who wrote “it’s hard to prepare for that” is spot on.
The “Long-term Needs” were mostly consistent with “Immediate Needs,” at least by order of ranking. However, the long-term needs for store/general managers, sales managers, aftermarket managers, and parts managers increased significantly.
This could suggest survey participants anticipate an increase in their number of dealership locations… or, more likely, there isn’t much depth among internal candidates to fill senior and mid-level management positions.
Noted one dealer, “Expectations for these types of jobs have increased and, organically, it is becoming more difficult to promote from within because of the lack of skill sets.”
While survey respondents appear mostly comfortable with their management team’s understanding of financials and operational best practices, the lack of “skill sets” represents a challenge. To that end, 77.4% said development/training of management “leadership skills” is high priority. Noted one dealer, “What we need will be the most challenging positions to fill.”
Recruiting Talent from Manufacturers
It’s not unusual to walk into a dealership and meet an employee, even an owner, whose background includes a stint with an equipment manufacturer. Whether they arrived by chance, were recruited by dealers, chose to change jobs, or became an owner of the business, manufacturers have been fertile ground for dealerships for decades.
WEDA’s survey indicates that may no longer be the case. As shown here, 55.6% said
“No” that manufacturers are not “a reliable source of talent.” Still, 19% said “Yes” they are and the remaining 25.4% said they’re “Not Sure.”
But comments from some dealers suggest there is wiggle room in hiring talent from manufacturers.
“It is a reliable source, but probably not as strong as in the past,” wrote one dealer. “There are fewer manufacturer employees who have the experience with dealers necessary to make the transition.”
Another said, “The talent pool with the manufacturers is also getting shallow. There is a lot less movement than there used to be.”
There also is a tradeoff to consider when hiring from manufacturers, noted one dealer. “Staff from manufacturers are still a reliable source for mid-level managers and above. Typically, manufacturers hire with higher educational/experience standards than dealers. However, learning the business from the manufacturer side often results in a difficult transition to dealership operations.”
Internal Management Development
While considering the talent that may or not be available in the marketplace, dealers also were asked to assess their own efforts in developing management personnel internally. As shown in the chart on “Internal Management Development,” 55.6% of dealers checked “No” to indicate they could be doing better. Dealers who checked “Yes” when it comes to providing adequate training totaled 25.4%, but 19% said they’re “Not Sure.”
Some dealers were decisively open about the dearth of management training at their businesses. Here are some examples of what they wrote:
- “We can always do more.”
- “We certainly are working on this.”
- “We are trying through better hiring practices.”
- “I am not sure we are doing enough. We are doing more today to develop talent than we were five years ago.”
- “We have room to improve.”
- “We’re trying hard, but it’s always still a challenge.”
Another dealer suggested training is not one of the dealership’s strengths. “We are not great at internal training, but we have training partners such as WEDA, Spader, etc.” But, he added, even with external training help, dealerships need to employ people who are willing to learn new things. “You must start with folks who have the skills to use the training, and that’s the difficulty.”
Finally, another dealer questioned whether today’s employees have a genuine thirst for or interest in training. “It seems that less people are interested in developing their skills unless the dealership continues to pay them for the time they are learning. I believe in the past many people would invest their own time to improve their skills.”
When asked whether the industry offers adequate business, financial and leadership “Training Sources,” less than half of those surveyed said “Yes.” However, the other half said “No” or they’re “Not Sure.”
Here’s how one dealer summed up training sources. “We feel it is not difficult to find the training resources. Our concern is how effective the training is and whether our managers are implementing what they have learned. Implementation is likely the bigger concern.”
Best Training Sources
While the majority of dealers, 50.8%, believe “Internal Training by Employees” is their best training source, 33.3% of respondents look to “Independent Training or Consulting Firms.” Others who responded prefer “Manufacturer/Manufacturer-sponsored Training” or “Other” sources.
What’s interesting is comparing the graph for “Best Training Sources” against the graph for “Internal Management Development.” As shown in the former, 50.8% of dealers believe training by employees is their best training source. In the latter, however, 55.6% of respondents don’t believe they’re doing a good job in this critical area.
Effective Recruitment Approaches
The WEDA survey answered the question about the need for talent now and into the future. The problem is where to find it – internally or externally.
In recent years, social media has exploded, but is it the right platform to attract the kinds of people to meet immediate needs of equipment dealers? Anyone who’s following dealerships on social media will notice regular posts for technicians and jobs for service writers, the parts counter, salespeople, drivers, etc.
It’s unlikely anyone would see many if any job postings for senior and mid-level managers on social media, especially on Facebook, Instagram, etc. So, where are dealers finding the people they need? Here’s what we found.
Survey Participants by Mainline
As noted previously, the WEDA survey included dealer groups whose mainlines are AGCO, Case IH, John Deere, Kubota, and New Holland equipment. Some dealers listed “Other” as a mainline.
The average number of locations per respondent was 8.5. The highest location count among respondents was more than 40.
While there are no startling discoveries when reviewing the WEDA survey, it does at least confirm that dealerships have or will have immediate and long-term needs in key positions.
Leadership training is the overall top priority. When broken down by position, service manager is the number one short- and long-term need across all lines except AGCO. The need for general managers consistently ranked second.
The survey also indicated that dealers, despite spending considerable money on annual training, still have gaping holes in their operations. The unanswered question is whether the money spent is closing the talent gap between what they have and what they want.
“This survey validates the statement that larger investments in training need to be made,” says Schmeiser. “The numbers in our Cost of Doing Business survey indicate that investment in training is increasing year over year. However, I believe our industry is still behind other like-industries in total training dollars spent.”
Schmeiser added that some dealers have said they can’t justify the cost and are unwilling to invest in training. “We believe training needs to be viewed as an investment instead of an expense.”
In closing, Schmeiser says the association’s efforts in education and training are substantial and it’s unlikely that will change given the findings in this survey.
“Dealers in the past identified training and consulting as areas where they needed their association to step up,” adds Schmeiser. “WEDA has invested considerable assets in developing training solutions that meet these needs. Now that we have identified the challenges, it’s nice for us to also offer solutions.”
Written by WEDA staff