Inspired Satisfaction: How to Predict Employee Turnover
Every employee has a chance of turning over. They could outright quit their job, be recruited elsewhere, or you could terminate them. While the probability is there and many external factors outside of a manager’s control could affect an employee’s likelihood of quitting, the majority of actions that can directly lower this likelihood are under the leaders’ control.
Green Pea Profit Loss: For this topic, the term “Green Pea” means new to your dealership. After measuring turnaround metrics from dozens of dealerships, the average new hire takes close to 40% more “Ups” than their more seasoned counterparts. Regardless of waiting on more customers, they often close at 35% less than an employee who has been there for over 6 months. If your veterans are waiting on 30 customers and closing at 60%, it’s safe to say your new hires are waiting on 45 and closing at 30%. When an employee understands your process, customer, product, the team, etc., after working somewhere for at least 6 months, they will close significantly more deals per month versus their greener counterpart.
Impact on the rest of the team
“They’ll hire anyone with a pulse.” is the red flag that flies high when I interview sales teams. Bringing in new employees can often cause stress on the rest of the team and create indicators like that one, which imply your business has reached an extreme amount of turnover. Your team has broken and people may refuse to help the new hires, and rather they become just a number. Instead of wanting to get to know, work with, and help the new hire, this will create a mindset of “They won’t last here anyway.” It’s at this point that managers are all alone in the quest to recruit, hire, train, and coach new salespeople. The rest of the team will begin to hinder your efforts. Standards drop to a new low for new hires and veterans will no longer believe they are a part of something great. This lowers employee motivation, and high producers on your team have leverage because they know that they will be harder to replace. Hopefully, they won’t use that against you.
Impact on customer retention
Customers feel the turnover too. Especially the customers who would stay loyal to your dealership and bring repeat business and referrals. When they come back in and see a new employee who doesn’t understand them or get to know them, all the rapport and relationship that initially made the deal, is out the door. Astute customers may even wonder, “Why are there always new salespeople in this place, every time I visit?” They want to go somewhere where everybody knows their name (to coin off of the theme song to the popular 80’s and 90’s show, Cheers). The implication of high employee churn is extremely costly to your company and has a further reaching impact than most managers give credit for.
Predict the Future
There is a surefire method for understanding the likelihood an employee will leave or be terminated. Looking at the illustration, there are two Axis.
The X-axis determines the level of employee motivation. There are several key factors involved. First is the number of the 10-employee motivation requirements that are being met, and to what capacity. Of the ten needs, managers usually meet only two or three that are most important to them in their own career. If an employee has different primary needs, they often feel neglected by management. As a result, employee morale can slide left on the axis, showing a lower morale which ultimately creates a less than desirable employment situation. These needs will be discussed in another chapter in this book.
The Y-axis determines the level at which their livelihood needs and wants are being met in relation to their perception of being able to have them met elsewhere. In addition, it involves the employee’s success as perceived by their managers. The reason these two factors must be combined for this measurement is because if an employee is meeting their criteria of success at a job, but their manager doesn’t believe so, they are likely to be engaged differently by their manager. On the other side, if they don’t feel successful at their job, or aren’t meeting their personal expectations of success, but the manager feels they are, they will be treated as such. This ultimately raises their perception of success on the Y-axis. Both internal, and external factors may influence where an employee lands on the Y-axis.
Perception is the key word here because perception is reality. An employee may feel they are as successful as they can be in their role at their current place of employment but do they feel they could get closer to their version of success elsewhere? If they do, they will slide down on the Y-axis and the likelihood of them staying at your dealership decreases immensely. The quadrant that they fall into will determine the likelihood that they will quit, be recruited, be terminated, or stay as long-term employees.
The top right corner: This is Inspired Satisfaction. The employee’s engagement needs are being exceeded. The employee believes that they are more successful than they would be at any other place of employment. Their manager perceives them as successful and a top producer for the company. The employee’s overall morale is high. This employee will remain a happy engaged employee for a long time to come.
The top left corner: This creates Driven Success. The employee feels successful at their job and their managers feel that they are successful. The employee believes that they are doing the same or better at their current place of employment than they could do elsewhere. However, there are engagement needs that are not being met. As a result, the employee’s morale is lower than it could be. If they are in the Driven Success column, the employee may have a low likelihood of quitting because they are meeting their personal expectations of paying their bills and career success. However, these employees are susceptible to recruitment from other companies. It only takes for them to believe that they could be more successful or equally successful elsewhere. A close network or a potential new manager can convince this employee that the work conditions and motivation requirements will be better elsewhere. If this happens, they are likely to move on for greener pastures on the morale side.
The bottom right corner: I call this “Lackadaisical Fulfillment.” These employees are your friends, they are treated with respect and have high morale levels. However, their personal version of success is not being met. They are perceived by others and often their managers that, “they could do more”. Frequently, these employees stick around because they enjoy the people that they work with, or enjoy the job or place of business in and of itself. These people may be challenging to fire because a manager has built a positive relationship with them. However, these people are susceptible to being removed from the company because they do not meet expectations. They may also quit of their own volition because they are not able to live up to their own career success standards. There is a fairly high probability that a company with high accountability, goal setting, and standards for achievement will terminate this employee.
The fourth quadrant: Finally, this is “Frustrated Disengagement.” This is when employees are disengaged because motivation requirements are not being met. Their career satisfaction is low and they often believe that they can do better elsewhere. These employees are more than likely already searching for external opportunities. They often take bold, negative action against the company when removed from the organization or willingly departing. The employees in this category are the ones most likely to file suit, formal complaint, and damage your organization’s brand when leaving. Keeping them on without doing anything is a grave mistake as they may be disengaged and could cause damage as an employee. They won’t look out for the company, because they don’t believe the company or manager is looking out for them. They need to be coached quickly into another quadrant to avoid damage from being done to the manager’s reputation, the dealership’s brand, and the overall health of the organization. Their likelihood of being employed at your place of business without action being taken are slim to none. Plan on replacing these employees within 30 days.
A manager’s return on investment (ROI) of time spent with their employees is extremely important to shed some light on. Managers should spend at least one hour per week with an individual employee in order to improve each employee by 10% over the course of 3 months. However, new hires generally take up a fair amount of this time. This causes the middle of the pack employee, or top producing veterans to get neglected. 10% improvement of a higher producing employee shows a much higher ROI of managers time. In perspective, 10% of a 10 car person at 2000 a car will result in 1 more deal and $1100 more profit vs 10% of a 20 car person at 3000 a car results in 2 more deals and $6600 more profit. The coaching question becomes, how can you spend this necessary time with you’re A and B players if your constantly C’ing people for interviews to replace those that quit?
For the skeptics who will think that your veterans can not be improved by 10%, it is proven that they can. However, for more information, I am speaking on this topic at Rockstar Automotive Conference in Las Vegas Nevada on the 14th and 15th, and would love for you to attend! That being said, a manager can spend the same time with a veteran employee and get a much larger ROI.
We as leaders must upgrade our leadership style, ability, and knowledge just like we upgrade technology at our dealership. We must find new and creative ways to meet employee motivation requirements to ensure that our team members enjoy coming to work. We also need to ensure that we are aligned to each employee’s personal expectations of career success and financial satisfaction. In this way, we understand their goals and objectives and can help ensure that they meet them. When we work with our employees, and these goals are not aligned to the company goals, the employee’s comfort zone needs to be stretched to reach new heights. Only by doing so, we ensure our employees reach inspired satisfaction and remain loyal to us and our leadership.
Next chapter: Let us walk through the 10 Employee Motivation Requirements together…
This is an excerpt in an upcoming book in sales and leadership by Sean Kelley CEO of Car Motivators. Car Motivators helps auto industry leaders achieve great results through their people and their technology. We believe training should be tailored individually to be real and relevant to your business. By coaching excellence into every member of your team together, we can create winning cultures of unstoppable champions at each layer in your dealership that will exceed expectations, understand the value everyone brings, communicate effectively, and be aligned to the direction you are taking your company. We would be honored to learn more about you and your unique challenges to determine if we could help you create this culture. Please email Sean@carmotivators.com or Get Started For FREE With Coach Chat to achieve greater results through your people and technology! Sean also has a featured VLOG on http://www.dealershipnews.com and speak across automotive conferences accross the country like Digital Dealer, Rockstar Auto Conference, AutomotiveGameChamers!