To measure success among their industry peers, dealers once used their vehicle, parts and service sales figures as the only benchmarks. As dealership accounting has become more sophisticated, so have the benchmarks. As a result of this evolution in accounting benchmarks, the industry has witnessed changes in the structure of the dealer organization.
Think back to how the Comptroller was positioned within the automotive organization a few years ago. This person was seen only as a number cruncher, a necessary evil who churned out the mandatory financial statement for the manufacturer. As dealership accounting benchmarks have changed, so has the way the Comptroller's position is viewed. As the dealer's reliance on more sophisticated data and benchmarks has increased and the financial assets have received more attention, the importance of the Comptroller position has increased. The Comptroller who once occupied some remote corner in the dealership now finds his or her position elevated within the organization and positioned among the Fixed and Variables Managers as an advisor to the dealer. In many organizations the Comptroller's status has been raised to the level of Chief Financial Officer, a vital part of the executive team.
As the evolution of benchmarking techniques continues, a new change in the dealership organizational structure is emerging and centers around the Human Resources Manager (HRM). As a new measure of success, many dealers are focusing not just on sales figures, but on the productivity measures associated with all sales and all departments of the dealership. This evolution has brought a new category of assets to the forefront - HUMAN ASSETS.
Is your organization considering human assets by using productivity related figures to measure success throughout the organization? If so, against what standards are you benchmarking? MPG monitors its clients' financial figures related to productivity monthly. Using MPG's third quarter 1997 index, representing 20% of MPG automotive clients nationally, see how your store(s) compare below:
How does your organization measure against these figures? Is employee productivity a topic that is receiving attention in your organization? As the human side of dealership benchmarking figures gains in prominence, we find dealers becoming more concerned about how these assets are managed. Facets of human assets management currently receiving the greatest amount of attention are recruiting, interviewing, orientation training, personnel records maintenance and team building, among others. What these elements have in common is their impact on productivity and the need to have standardized functions that are well managed and consistently applied. Obviously, the average employee turnover, which exceeds 70% in most dealerships, has an awesome impact. Consider the dollars wasted on training alone.
In today's dealership environment, who has the time to devote to these processes? The answer is no one, which points to the need for a new position to manage and monitor these processes for the dealer, the HRM (Human Resources Manager). We at MPG believe strongly that any dealership with 60+ employees needs a formalized human resources department headed by an HRM knowledgeable in all human resources functions. It is not enough to hire or simply assign someone the HRM title; rather, this person needs to be positioned at the executive level as an advisor to the dealer and upper level hiring managers. It is our hope that the HRM position will see the rise in responsibility and importance witnessed with the Comptroller position in recent years. We may indeed eventually find human assets to be more important than financial assets.
Consider the changes taking place in the automotive industry. What will make your organization a strong competitor in the coming decade? Will it be your access to money that sets you apart from your competitors? Not likely, as money is easily accessible to most business owners and more accessible to the public corporations and superstores. The factor that is most likely to differentiate you from your competitors is your access to and management of quality employees. The human assets are the scarce element that will make the difference in the future of your business.
NEW VEHICLE DEPARTMENT
NV retail per NV emp. 5
NV gross return per NV emp. $7,742
NV dept. net profit per NV emp. $1,649
NV retail gross per salesperson $14,325
Retail units per salesperson 10
SERVICE DEPARTMENT
Mechanical ROs per mech. emp. 25
Mechanical gross per mech. emp. $3,944
Dept. net profit per mech. emp. $78
USED VEHICLE DEPARTMENT
UV retail per UV emp. 6
UV gross return per UV emp. $9,310
UV dept. net profit per UV emp. $3,656
UV retail gross per salesperson $18,168
Retail units per salesperson 12
PARTS DEPARTMENT
Parts sales per parts emp. $27,202
Parts gross per parts emp. $7,858
Dept. net profit per parts emp. $1,984
NEW AND USED DEPARTMENTS
N&U retail per N&U emp. $8,202
N&U gross per N&U emp. $2,364
Retail gross per salesperson $16,482
Retail units per salesperson 11
BODY SHOP
Body gross per body emp. $4,371
Dept. net profit per body emp. $901