THE STATE OF RETAIL AUTOMOTIVE HIRING Q3 2017

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1 THE STATE OF RETAIL AUTOMOTIVE HIRING Q Featuring Insight into the Applicant Experience BROUGHT TO YOU BY

2 Overview Retail automotive continues to see 2017 as a milestone year. The industry experienced a year-over-year sales surge in September, much of which can be attributed to Hurricanes Irma and Harvey devastating lives and destroying hundreds of thousands of vehicles in the Southeastern United States and Puerto Rico. Even for those who stayed out of harm s way, the urgent shift of inventory to hurricane-ravaged regions may result in vehicle bottlenecks throughout the country that will continue to impact operations for the coming months. 2

3 State of Retail Hiring - The Talent Demand Continues Q3 Open Sales Jobs Q2 Open Sales Jobs 2017 OPEN SALES JOBS K 1.5K 2K 2.5K 3K 3.5K Dealerships continue to see a record number of applicants to staff an ever-growing list of open jobs. Across our network of Hireology dealership customers we saw relatively flat demand for new salespeople in Q compared to Q2 2017, with a 1.3% decrease in the number of newly opened positions. This is aligned with seasonal trends that bookend the busiest parts of a traditional sales cycle between the Memorial and Labor Day holidays. Source: Hireology Network Q2 - Q Increasing Fixed Ops Job Demand On the other hand, fixed operations was a completely different story. The demand for new talent on this side of the store saw a 14% increase in new positions created as dealerships continue looking for service centers to drive more dealer revenue and rely less on new vehicle sales to turn a reliable profit. Matched with continued efforts to find qualified technical talent and overcoming challenges like the Chicago technicians strike that impacted weeks of productivity across 400 dealerships, fixed operations will continue to be a critical part of every dealership s success. Q3 Open Fixed Ops Jobs Q2 Open Fixed Ops Jobs 2017 OPEN FIXED OPS JOBS Source: Hireology Network Q2 - Q K 1.5K 2K 2.5K 3K 3.5K Small vs. Large Group Activity 2017 YTD Job Openings Averaged Per Rooftop 1 Rooftop Rooftops Rooftops 12 Looking at total jobs opened this year, single-location dealerships are driving the most employee demand. Single-location rooftops had an average of 15 roles opened year to date, while groups with 2-10 rooftops have had an average of 12, and 11+ rooftop locations have had 13 roles open per store. 11+ Rooftops 13 Dealerships large and small have made substantial strides in transitioning new sales roles to be product specialist-focused, rather than strictly sales. Single-location groups had 8% of all open sales positions as product specialists, while 11+ location rooftops had 12% of new sales jobs open in the specialist family. For Q2, these numbers were 2.8% and 4.2% respectively, showing substantial Product Specialists as a % of Sales Roles Q2 Q gains as dealers recognize the appeal of product specialists to bring in younger talent outside of retail automotive and transition to a fulfillment-focused customer experience. There is still work to be done on the specialist front, but significant progress has been made with momentum across the industry. Quarter Q2 Q3 Single Location 2.8% 8% Large Group 4.2% 12% 3

4 Small vs. Large Group Activity Continued Technicians also saw another quarter of high demand. As the economy nears full-employment and demand for techs increases, dealers have found it very challenging to staff with effective technicians to keep repair bays humming and revenue coming into the fixed operations side of the business. For single-location rooftops, technicians accounted for 40% of openings among all jobs. This is relatively flat from the second quarter s total of 39.8% of technician roles. For larger groups, this number increased. Groups with 11+ locations had an impressive 44% of open roles for technicians, up dramatically from just 18% in Q2. This shows the investment in technical talent more than doubled in just one quarter across larger groups while potential turnover from recent hires may also factor into this figure. Quarter Q2 Q3 Technician openings as a % of All Roles Q2 Q Single Location 39.8% 40% Large Group 18% 44% Double-Digit Growth for Sales and Fixed Ops Hires Sales hires for the July - September quarter were up 23% compared to the historically busy April - June summer season, and this was virtually matched on the fixed ops side of the business - increasing 24% quarter over quarter. This could be seen as dealers preparing for the blockbuster summer buying season - with consumer incentives across many OEMs fueling demand, requiring new sales talent to keep inventory moving off each lot quickly. Hiring Activity Speeds Up Dealership groups large and small are recognizing the talent crunch and speeding up the hiring process to stay competitive. The median hiring process lasted just 16 days to place a new hire in Q3, down from 23 days in Q2. Scaled across the thousands of hires our dealership customers have made this past quarter, this quicker hiring cycle is adding thousands of weeks of productivity back to the economy. The median hiring process lasted just 16 days to place a new hire in Q3, down from 23 days in Q2 4

5 Candidate Sources Quality over quantity continues to be the story when it comes to the top sources of hires across retail automotive. Looking at a key hiring metric, the applicant to hire ratio shows how different channels drive substantially different results on the hiring front. This breakdown demonstrates how important a dealer s career site and employment brand are: top applicants will seek out great brands and apply to their website directly after looking for open roles, a career path, and an overview of the company culture. The main takeaway for dealers here is the potential to transform the dealership career site into a strong, low-cost way to build credibility with top candidates. Beyond this, paid job boards are a somewhat expensive investment for dealerships, and are only one fifth as efficient at delivering top candidates. It could be worthwhile to pull some of the money from monthly job board spend to invest back into the dealership s branded career site or find a programmatic way to source at scale. Finally, while it could be valuable to cast a wide net using organic job board feeds, it s important to see how it takes 10x the amount of applicants to match the impact of a career site. Top dealership teams should instead focus on building a smaller, but higher quality pool of talent instead of trying to reach for larger numbers of applicants that will take much more time to review and reject. The best way to do this is investing in a content-rich career site that only focuses on top talent seeking out your brand. Applicants Needed for a Qualified Hire Paid Job Boards 102 Career Site 20 Organic 222 The Applicant Experience How well do you understand your applicants? While many hiring managers may think this can be answered in the interview process, you may be missing perspective on why applicants applied to your company or more importantly, why a top employee skipped past your job for the competition. Hireology surveyed recent hires across the country who began jobs in retail automotive during the busy Q3 season. We asked them a variety of questions to help answer how they research dealerships, what their past roles were, and what ultimately made them apply and take the job to better understand what motivates today s applicants. YEAR OVER YEAR APPLICANTS PER DEALERSHIP Applicant Activity Findings 1,000 APPLICANTS The average dealership received 801 job applications this year - totalling 1.25 million applications across the Hireology dealer network. Breaking this down to Q3 activity, we saw 488,000 applications across Hireology dealerships - 60,000 of which advanced to the candidate phase, with 6,700 eventually hired by dealerships for new roles in Q YEAR Focusing on this top 1.37% of applicants, we asked questions to get details on their background and motivations to apply to their current roles. 5

6 Previous Jobs and Industry Experience We examined where recent dealership hires originated from. The results fell into three main buckets: Nearly 22% were unemployed, 33% had a non-dealership job, and 31% came from another dealership. Roughly 14% had other employment circumstances - whether partially retired, a student, or not actively seeking work. Recent Hireology and Cox Automotive research found that two-thirds of today s workers would be open to a career move, but just 5% would consider roles in the overall automotive field. For retail automotive, this number drops to a 1% sliver of the workforce who would consider working in a dealership role. By narrowly focusing on candidates with existing dealership experience, you may be missing a significant amount of qualified candidates looking for new roles who are currently employed outside of retail automotive. APPLICANT WORK STATUS BEFORE ACCEPTING THIS JOB Another Dealership Job Non Dealership role 31% 32.8% 21.8% 14.4% Unemployed Other Applicant Research Tools Today s top applicants are spending significant amounts of time doing online research before applying to open roles. Our survey found that 37% of applicants visited the dealership website to learn about the role while 35% also looked at the website to better understand the culture and history of the company. Over 20% of those surveyed visited Glassdoor.com to read anonymous employee reviews while 10% used other career sites like Salary.com to learn more about compensation and the team culture. Just 16% of applicants surveyed admitted to doing no research before applying. WHICH OF THE BELOW DID YOU USE TO RESEARCH COMPANIES ON YOUR RECENT JOB SEARCH? Visited the company career site for role details 64 Visited company career site for details on the culture and history 61 Read employee reviews on Glassdoor 35 Researched the company on Salary.com or similar sites 18 Asked friends and family about the company 66 I didn t do any research total responses RESPONSES The number one way these hires researched their dealership? They asked friends and family for their thoughts on the company. At 38% this even topped out doing role-specific research, showing how critical positive word of mouth marketing is - not just for your customers, but for your potential employees as well. 6

7 Applicant Research Tools Most of the hires surveyed had a positive experience throughout the hiring process. 81% of surveyed applicants said the application was easy to complete. Similarly, when asked if the interview process moved at a good pace, if the hiring manager communicated directly, and if the interview questions let the applicant explain their experience, the results were 83%, 86%, and 85%, respectively. CHOOSE HOW MUCH YOU AGREE/DISAGREE WITH STATEMENTS ABOUT YOUR NEW JOB 120 RESPONSES Strongly Disagree Disagree Neutral 40 Agree 20 Strongly Agree The online application was easy to complete The interview process moved at a good pace The hiring manager communicated quickly and directly The interviewer questions discussed my experience and how I could contribute in the role The key takeaway Top applicants want a seamless interview process with an easy-to-complete form, clear communication and relevant interview questions that move at a good pace. Missing any of these components could leave this qualified pool of candidates to look for new opportunities elsewhere. Accepting the Offer - What it Takes When it came time to accept an offer, a majority of the hires surveyed mentioned the role fit (69.5%) and the ease of the application process (40.2%) as major factors in their decision to accept the new job. Beyond this, another interesting trend emerged: 57.5% 45.5% 36.8% Cited a better work/life balance in factoring into their decision Read positive reviews about working at the company Mentioned reading company information online and learning about the culture 7

8 Accepting the Offer - What it Took Continued Surprisingly, many of these factors were not related to compensation: instead hires took the roles because of environmental factors and a positive hiring process. CHECK ANY FACTORS THAT WERE IMPORTANT TO YOUR DECISION TO ACCEPT THE JOB Company information was available on the company website 64 I heard or read positive reviews about working at the company 79 The application was easy to complete 70 The role seemed to align with my experience 121 The benefits seemed very competitive 70 The work/life balance seemed good RESPONSES Turnover and Tenure: How Long Do Hires Want to Stay? HOW LONG DO YOU HOPE TO STAY WITH THE DEALERSHIP 4+ Years 71.8% 7.5% 10.3% 4.6% No longer at company Looking for a new job 5.7% About 1 Year 2-3 Years While turnover has been a challenge plaguing retail automotive for years, a vast majority of hires are looking for long-term jobs to help them grow as professionals. When asked how long they d like to stay in their new roles, 71.8% of applicants hope to be at their company for the next 4+ years. Interestingly, 12.1% of those surveyed of being hired within the past 90 days are either already looking for new jobs (4.6%) or no longer with the company (7.5%) - showing that additional progress can be made at hiring better culture fits, implementing stronger training and onboarding programs, or having better manager interactions to set realistic expectations. 8

9 Applicant Process Perception on Brand Does a strong (or poor) application process impact your consumer brand? While this segment of survey respondents did eventually get the job, they had interesting feedback on what their perception of the dealership would have been if that was not the case. When asked if they never heard back from a company after applying to a role they d be qualified to fulfill, 33% of applicants said they would be less likely to support this business. 52.9% It wouldn t change how I feel about the business 32.2% I would be less likely to support this business If you applied to this role and never heard back, how would it impact how you felt as a customer to the business? Respondents were also asked whether they would support the business as a customer with a few scenarios: 44% would not support the business if they applied and received no response 57% would not support the business if they had a poor interview experience 78% would support the business if they were treated with respect throughout the process WHICH SITUATIONS WOULD IMPACT WHETHER YOU D RECOMMEND A FRIEND APPLY TO A COMPANY? 120 RESPONSES Much less likely to recommend Somewhat less likely to recommend Neutral Somewhat more likely to recommend Much more likely to recommend Didn t hear back from company after submitting application I was treated with respect through the application process I received consistent updates throughout the interview process I had a bad experience during the interview 9

10 Applicant Process Perception on Brand Respondents were also asked how situations would impact them referring others to apply for open jobs: 53% 56% 82% would recommend against a friend applying if they applied and did not receive a reply would discourage a friend from applying if they had a poor experience interviewing would encourage a friend to apply if they have a positive hiring experience WHICH SITUATIONS WOULD IMPACT IF YOU D LATER BECOME A CUSTOMER AT THE BUSINESS? 120 RESPONSES Much less likely to buy Somewhat less likely to buy Neutral Somewhat more likely to buy Much more likely to buy Didn t hear back from company after submitting application I was treated with respect through the application process I received consistent updates throughout the interview process I had a bad experience during the interview The best dealerships are mindful that their local talent pool is indistinguishable from their customers. A poor hiring experience can have a real-world impact on purchasing behaviors on friends and family members, while a positive hiring process can quickly help top employees encourage their network to submit applications. Being mindful of this fact to provide a great applicant experience will drive a positive employment brand and can build customer trust. LEARN MORE See how Hireology helps 1,400+ dealerships across the country centralize their hiring, onboarding, payroll, and talent management efforts to save time and money while finding great employees. Get a demo 10