On average, your single highest expense in any given year is salaries and benefits. Over the last 5 years, dealers report that salaries and benefits account for about 11% of their total expenses, according to the latest United Equipment Dealers Assn.’s Cost of Doing Business Study.
That can vary from year to year, of course, but consider how your dealership compares to the average. Let’s say your total expenses for salaries and benefits fall well below that level — and you’re not in a financial position to increase wages or benefits.
Don’t worry. According to a recent study posted on Harvard Business Review, the top predictor of workplace satisfaction is not pay. Instead, it’s the culture and values of the organization, quality of senior leadership and career opportunities.
There are many consultants who can help you develop a formal statement of your company culture. However, it all boils down to describing your company and leaving out descriptions about the brands you carry, how long you’ve been in business, where you’re located, etc. It’s the “who” of your dealership, not the “what.” Think in terms of overall atmosphere, camaraderie, employee relations and connection to your community. You probably already have a company culture to be proud of; you just need to showcase it.
Fixing the quality of senior leadership may be a bigger task. It starts with you, so find out what kind of leader you really are — not just what you think you are. Simply type in “leadership test” into Google and you’ll find a variety of short, online and no-cost leadership surveys. I found the Strengths Finder program to be very good — a short, to-the-point book, loaded with ideas, as well as an online leadership assessment.
Start with whatever survey that appeals to you to uncover your true strengths and weaknesses. And, remember, you don’t need to be the “be-all and end-all.” Have your managers take a test as well and see where your collective strengths could come together to overcome your weaknesses.
Career opportunities may be a tougher issue to tackle, especially if you’re a small dealership. However, opportunities doesn’t necessarily mean advancement to management, for instance. It might just mean a chance to work on special projects to learn a new skill. Ask your employees what kinds of opportunities they are looking for and you might be able to boost their motivation very quickly — without increasing salary expenses.
To learn more about dealers’ overall expenses and changes over the last 5 years, read Chapter 2 in our “Measuring Up” series online: See How Your Expenses and Margins Stack Up.