Dealers should ensure employees' compensation remains competitive

AKRON — What does it take to make an employee happy and willing to stick with you?

That's a question probably all companies and entrepreneurs wrestle with, but it's especially relevant in tire retailing where Baby Boomers are retiring in droves and not many Millennials are interested in a career in the automotive trades.

Tire Business spoke with Chicago-based consultant Darrell Rowe on the issue of compensation and what to consider when hiring or promoting employees.

Mr. Rowe, who retired from Bridgestone Americas Retail Operations in 2014 as national director of teammate education and development, said that in his career with Bridgestone Retail, he found there was no "silver bullet" to compensating sales, management or technical employees.

"What I would say (to independent tire dealers) is their compensation package needs to be competitive with the local competition," he said.

• This story appears in the March 27 print edition of Tire Business. 

Mr. Rowe noted that the amount of wages, health insurance coverage, a possible 401K match and vacation/sick time is going to vary by region. But he has noticed that in the past few years that independent tire dealers are changing the way they're doing business by analyzing what they're offering and what their competitors are offering.

"They'll go to professional (trade) organizations and get compensation information from those, then build knowledge on what's offered in their geographic region," he added. "From that knowledge, they design a compensation model."

Undoubtedly, a fair wage that provides for an employee's cost of living is a starting point, Mr. Rowe said, but when it comes to fringe benefits, not every employee is interested in the same thing.

As a result, he advised against stereotyping either Generation Xers or Millennials.

"One of the things I've realized is it's not an individual's (age) group, but their situation that drives them," Mr. Rowe said.

For example, he said generally, young persons starting out in tire sales or service will be very interested in how much money they can make until they start a family and become more interested in time off and flex time.

And when it comes to working overtime, Mr. Rowe noted he's seen many tire industry sales and technical staff who are more interested in comp time commensurate with the overtime vs. extra pay.

"Flex time is more important to a lot of people because life is more complicated now," he explained. "That's true of all generations."

All generational groups are interested in developing their career paths, so ongoing education and training is a great benefit for tire dealers to offer, according to Mr. Rowe. He added that business owners should look at their people as their most valuable investments, not as the costs of doing business.

Automotive service technicians especially need to be viewed as highly skilled and computer-savvy independent business people, and their pay, time off, benefits, and continuing education should reflect that, he said.

Regarding dealership salespeople, Mr. Rowe suggested these tips on compensation:

• Start salespeople at an hourly base rate and add any overtime pay, then move them up to salary;

• Emphasize and train them in product knowledge and exceptional customer service; and

• Create an incentive program based on how well salespeople improve customers' overall experience with the dealership, from the front counter to the waiting room.

On that last point, Mr. Rowe said it's important to train salespeople not to upsell a customer on a product or service their vehicle doesn't need at that time.

Rather, a tire dealership that's customer-centric will be competitive, and owners should reward salespeople for going out of their way to satisfy customers, he added.