How do you know it is time to hire more people?
During a recent discussion on a Facebook forum someone asked, “How do you know when it is time to hire another finance manager?”
We are not talking about replacing anyone, but adding someone to the dealership payroll. In part, it addresses the performance level of the finance manager already on board; in part it focuses on the workload.
The answers to this question varied. Here is my take: There is not a blanket response. All finance managers are not created equal.
Some people would argue that if a finance manager is consistently signing over 70 or 80 deals a month, consider hiring another manager. But if you are a 90-car store, you may not be able to pay two finance managers enough to keep anyone with respectable talent by allowing them only 45 touches a month.
In this case, consider varying the process, rather than hiring a second manager.
In a store doing 300 cars a month and employing three F&I managers, consider bringing on a fourth. That would give each one an average of 75 touches.
Another variable to consider is the fact that some managers will reach their peak performance at 40 to 50 deals. Once they start signing more than that, their numbers drop. Some peak at 70, some at 100.
This varies not only by person but also by the processes in the dealership. In some stores, the finance manager is responsible for everything from running credit, submitting deals, prepping deals, printing paperwork, checking red-flag regulation compliance, getting the contract funded and more.
In other stores a finance manager’s job is simply to sell products and hang paper. In such cases, the F&I manager is capable of signing more deals.
Customer satisfaction is another factor in deciding whether to hire another person. Check your customer-satisfaction surveys. What are customers saying? Are they happy with the explanation of their paperwork or the time it took to get into the office? If not, consider hiring another manager.
Look at funding time for contracts. Are contracts regularly coming back to be re-signed due to oversights? Consider hiring another manager.
Look at the hours worked. Are your managers working 65 hours or more on a weekly basis? Another manager might be needed.
There is no one answer to this question. Some of these issues may have nothing to do with the number of managers on the job. How a deal is brought to the finance office can affect all of these issues. So can a poor finance manager.
An understanding of the entire picture is required to decide if the most profitable move is getting another finance manager. Whether the cost of the additional employee outweighs the potential of more income always is a factor.
Contact me at email@example.com with any questions.
Chris Cochran is Finance Director of the Haddad Motor Group in Massachusetts.