Car Dealers Learn Right Way to Fire People

So many people attended a recent Compli webinar, the workplace compliance firm did a reprise on the same topic: firing employees.

It wasn’t necessarily that the webinar audiences were mean-spirited ax wielders looking for victims to terminate. Instead, the surprisingly popular program focused on how to get rid of problem employees without exposing the employer to legal liabilities.

Recently acquired by KPA, Compli provides human resources, compliance and training and software. Many of its clients are car dealers.       

In a Wards Q&A, Toby Graham, KPA’s marketing director, talks about anti-harassment issues, fostering a healthy work environment, the gender challenges of dealerships that historically employ more males than females, the need to properly orient new hires and, yes, how to fire without getting into a legal fight. 

Wards: What are the trends as far as anti-harassment in the workplace?

Graham: Definitely the biggest trend in the news everywhere is sexual harassment. The #MeToo movement has really brought that to the surface, to the point that state governments are getting involved.

For instance, both the state of New York and New York City have put in regulations regarding anti-sexual harassment training and programs. California is starting that up this year. You’ll see more and more states getting proactive and expecting companies to do the same.

It’s interesting how it stems from a social movement and turned into a regulatory movement.

Wards: Dealerships tend to employ more men than women. Does that make them different workplace cultures?

Graham: It’s super interesting. The Equal Opportunity Commission did a lot of research on what constitutes an organization that is likely to have a harassment culture. And dealers tend to have a lot of the red flags. There can be different levels of power. There can be people considered star performers. There’s a whole laundry list.

Wards: Those are red flags?

Graham: Yes. They may say whether you are at risk of having harassment. Absolutely, dealers can fall sway to that. There is such a reputational cost of employing someone who is a harasser or of having a harassing culture. Dealers are so focused on having a fantastic reputation to bring in new customers. Yet anything even sniffing of harassment can impact the bottom line.  

Wards: Your firm helps with so-called employee onboarding. What is that exactly?

Graham: It is the process of making sure new employees are comfortable in their role, understand what they are supposed to do, how they impact the company and right down to where the restrooms are.

Wards: It’s new-employee orientation then, not something like waterboarding? (Toby Graham, left)

Graham: Done poorly, it is like waterboarding. If you don’t onboard people well, they are 50% less likely to stay with the company for longer than three years.

Wards: For years, auto retailing has had chronic employee turnover. How is that addressed?  

Graham: It’s so interesting because dealers have so much money going out as far as turnover. Some (dealership jobs, notably in the sales department) have 70% turnover.

It makes more sense to put more money towards retaining people than towards constantly hiring people. A big part of that is making sure existing employees are part of the organization and working towards something greater. You’re fixing a leaky bucket.

Wards: Why do you suppose there is such a turnover? Is it pay? Night and weekend hours?

Graham: It’s critical mass. It can be the pay, hours, weekends – all of that – and it can be that there’s no reason for staying.

Wards: What’s the solution?

Graham: One is to give people a reason to stay. Younger generations aren’t motivated 100% by money. They like to be part of something bigger. It makes sense for a dealership to fulfill their desires beyond money.

Wards: Compli a few months ago did a reprise of a webinar because the attendance for the first one was so high. And the topic was firing people.

Graham: We were shocked.

Wards: Is that a cautionary tale that 5,000 people attended a webinar on how to fire employees?

Graham: There is so much money at stake if you don’t do this right. Think of all the wrongful termination suits. Many times, it boils down to the employer not having processes in order.

We found this under the stone when we were talking about harassment. You find these harassers that you need to move out of your organization. How do you do that without opening a can of worms?

Wards: Your takeaway was that the attendees were not people who enjoyed firing other people?

Graham: No. Hiring and firing is part of the business. That 70% turnover we were talking about a minute ago happens for more than one reason.

Wards: So presumably people attending that webinar wanted to know how to properly terminate, if it came to that.

Graham: How to correctly fire them and to know the level of exposure. Dealers need a consistent process and proof that demonstrates a rightful termination. It’s a matter of having the documentation.

Wards: There has to be a documented justifiable reason?

Graham: Exactly. Not just hearsay or “just because.” That doesn’t stand up in court well. The average cost of a wrongful termination case is $130,000. And it typically takes three years to resolve.

Wards: OK, anything else going on of interest?

Graham: We’ve done a bunch of research around harassment, terminations and onboarding. The next area we’re focusing on is managers and how important they are to the health and well-being of a dealership. We’re looking at how managers impact a corporate culture.

Wards: What defines a good manager?

Graham: Someone who can help the team set goals, have discussions, understands the impact of a manager and their team’s impact in developing a culture that doesn’t tolerate harassment.

A good manager focuses on compliance in various areas. We’re seeing how critical managers are in building a healthy dealership. They’ve been overlooked in their care and feeding. A sales manager might understand desking well, but not so much how to set team goals, build rapport and make sure harassment doesn’t occur in the organization.

Wards: Does that mean training managers more? You don’t usually think of managers as the ones being trained on a regular basis at a dealership.

Graham: They’re being overlooked for training. By focusing on this small group of managers, it may have a greater impact than just focusing on the rank and file.

Wards: How receptive are dealers to these things?

Graham: Some of them are, and some of them aren’t.

Wards: With the ones that aren’t, is it because they think they already know or because they just don’t want to know?

Graham: Our biggest competitor is apathy.

Wards: Where is that based?

Graham. Everywhere.