Workforce Development Revisited

0

 

Recent survey looks at trends by dealership groups

The Western Equipment Dealers Association is taking yet another look at workforce development and the needs of dealers in hiring and training senior- to mid-level managers.

One major difference in the 2021 survey is the needs of dealerships were broken down by locations. The 2021 survey included responses from four groups: 1 to 4 locations, 5 to 9 locations, 10 to 14 locations, and 15+ locations.

In this summary, you’ll notice charts that represent the overall average of all responding dealers and charts that reflect dealer responses by number of locations.

While there has been some improvement in a few areas over the 2020 survey, the immediate and long-term needs in the critical positions of general managers and parts managers remains strong. But the need for service managers remains the top priority despite a drop in the percentage of dealers who identified it as an immediate need in 2020.

Immediate Needs

2020

2021

General Manager

40.3

46.6

Sales Manager

25.8

18.95

Aftermarket Manager

19.4

13.82

CFO

3.2

1.28

Precision Manager

14.5

13.82

Parts Manager

30.6

34.95

Service Manager

66.1

62.09

Human Resources

11.3

6.02

None

11.3

5.63

The long-term needs of dealerships show how critical senior- and mid-level managers will become as organizations grow, especially in the all-important revenue generating areas of parts and service management.

Precision managers, which were not identified as an immediate need in 2020, show a significant increase as a long-term need in 2021. With the technology built into today’s equipment, having a strong precision team will become more of a factor in the future.

Long-Term Needs

2020

2021

General Manager

54.0

53.9

Sales Manager

38.1

44.43

Aftermarket Manager

31.7

22.02

CFO

17.5

19.84

Precision Manager

14.3

23.33

Parts Manager

34.9

59.53

Service Manager

57.1

59.03

Human Resources

20.6

10.76

None

1.6

4.74

“It was no surprise to see that the need for service managers in the short term was still toward the top of the list. That continues to be a hard position to fill because of the unique skill set needed to succeed in that role,” said John Schmeiser, CEO, WEDA.

What surprised Schmeiser was the significant jump in the long-term need for parts managers. “We have heard repeatedly from dealers that this is one area of the dealership where there is the least amount of training, but with the year to year increase of almost 25%, that tells us that dealers are thinking about improving efficiency and profitability in the aftermarket area,” said Schmeiser. “With such a jump over the previous year, the survey appears to show that dealers want to be more aggressive to address this area.”

Overall bench strength

When WEDA conducted its initial workforce development survey, the association asked dealers whether they had sufficient bench strength to meet their needs for senior- and mid-level management.

The numbers didn’t reveal the severity of the problem because there was no baseline for making a comparison. The 2021 survey is eye opening because it shows bench strength is a mounting problem. This chart shows the confidence that dealers had in bench strength in 2020 has dropped by more than eight points in a little more than a year… and the lack of confidence has grown nearly six points.   

Bench Strength

2020

2021

Yes

39.7

27.4

No

46.0

51.6

Not Sure

14.3

20.9

Where these percentages take a turn is when you look at the four dealer groups that responded to the question about overall bench strength. As noted previously, the 2021 survey was broken down by dealership groups.

This chart from the 2021 survey shows that dealers in all groups don’t believe they have the bench strength to advance current staff into senior or mid-level management roles and this is really noticeable in the largest dealer group, 15+ locations.    

“The bench strength numbers suggest to me that dealers unquestionably doubt they have the bench strength to perform at a high level, especially the larger dealer groups. But the challenge is how to develop that bench strength. Right now, a lot of dealers are filling a position when it becomes vacant,” added Schmeiser. “Perhaps dealers need to look at hiring from a more strategic perspective, and investments in their people need to be the approach, as opposed to looking at training as an expense.”

Internal Employee Development

Self-assessment for development of senior- and mid-level management also took a turn in the 2021 survey. The confidence dealers showed in the previous survey about their ability to develop people for skilled positions withered when compared to 2020.

Internal Employee Development

2020

2021

Yes

25.4

17.28

No

55.6

66.83

Not Sure

19

15.89

It’s been pretty well established, at least in the WEDA surveys, the industry talent pool is becoming a small pond. It wasn’t long ago when former employees of manufacturers were considered a solid resource for dealerships.

“We’re starting to see some larger dealership groups establish in-house training divisions. This certainly is a step in the right direction. However, it may be difficult for smaller operations to copy what the larger dealers are doing.”

In 2020, 55.6% of respondents said manufacturers were not viewed as a reliable source of employees for dealerships. In 2021, that number has risen to 58.64% and there was a reduction in the percentage of dealers who still consider manufacturers fertile ground for employees.

Manufacturer Employees as a Resource

2020

2021

Yes

19.0

16.38

No

55.6

58.64

Not Sure

25.4

24.97

“This question perhaps provides the most interesting results,” noted Schmeiser. “More comments were submitted on this question, compared to any others, and there were strong differences of opinions based on the dealer’s main line. Like last year, this question indicates that brand plays an important consideration in our dealers’ perspectives toward the talent pool out there.”

With the shrinking pool of former employees of manufacturers, the burden to find talent seems to be coming from within the dealership. While 64.66% of hires, shown below, are coming from Personal resources, it appears dealers, 66.83%, aren’t having success in developing employees as noted in the chart on Internal Employee Development.

Effective Employee Recruiting Resources

2020

2021

Personal

62.9

64.66

In HR

24.2

18.06

Recruiting Firms

9.7

3.45

Other

3.2

11.65

Local College

 

2.17

Career Fairs

 

0

Scholarships

 

0

“I think finding people is one thing, but developing people takes more skill than what is clearly available within a dealership. While the chart Effective Employee Recruiting Resources shows dealers have increased their ability to find people, it appears they’re not doing great in employee development,” said Schmeiser. “This was a key takeaway for us from this year’s survey. Dealers want their key staff and management team to have better hiring and workforce development skills.”  

Availability of training

The question about Adequate Available Training is an area where dealers’ sentiments haven’t moved much in the last two surveys.

Adequate Available Training

2020

2021

Yes

47.6

46.98

No

28.6

28.03

Not Sure

23.8

24.97

However, as shown in the chart Preferred Source of Training, the preference for Manufacturer training has increased more than 5% as a preferred source while Internal training has slipped, something that coincides with the diminishing confidence of dealers to train employees internally.

This also may be reflective of the survey respondents by dealer groups in 2021. Historically, smaller dealership groups may look to their manufacturers for training assistance. Whereas, a larger operation is more likely to use external resources.

Preferred Source of Training

2020

2021

Manufacturer

11.1

16.38

Consulting Firm

33.3

30.99

Internal

50.8

46.61

Other

4.8

6.9

When broken down by dealership groups, only the largest dealer group, 15+ locations, shows that Internal Training is far and away its preferred or best training source.

“The comments were pretty clear that dealers are using manufacturer-sponsored training as part of their dealer standards,” added Schmeiser. “The results and the comments are clear that dealers preferred training from other sources.”

The cost of training

How businesses evaluate what they invest in training can’t be summed up in a single sentence or two, or a single chart.

Depending on immediate or long-term needs, a business can spend to overcome an immediate situation with a fixed goal or two… or for situations where the goals are still fixed but more focused on the long-term future. 

The following chart shows where dealers are investing in training.

The big question is whether these dollars are helping dealers achieve the desired outcome of developing senior- and mid-level management?

“Comparing this data to the last question provides more clarity. Dealers need the technical and product training that the manufacturers require and that serves dealers well,” explained Schmeiser. “But, in other areas, dealers don’t view the manufacturer-sponsored training as the best source yet the majority of their training dollars are going to that source.”

Another big question lands at the doorstep of the association. Is the 2021 survey more revealing than the 2020 survey? “The survey has shown that the problem of workforce development is getting more intense. Dealers do not grade themselves highly in the area of employee development, and they repeatedly tell us they need to do more,” said Schmeiser.  

Schmeiser also said time is a big factor in this.

“Dealerships are busy, every single day, and perhaps they feel that they can’t afford the time necessary to groom their key staff. I believe that it comes down to time. Dealers are so busy working in the business, it becomes a challenge to work on the business,” added Schmeiser. “But through the work of the association’s performance groups and Dealer Institute, we see that when dealers have made the investment in training, the return on that investment can be significant – both in bottom-line performance and employee retention.”

Editor’s note: The responses for this survey included dealers who operate 467 locations and employ nearly 11,000 people.


Article Written By WEDA Staff

Share.

About Author

Leave A Reply