Dealerships in Florida don’t mess around. Last month, the Compli team headed to Miami and Boca Raton for the 2017 Florida Auto Dealers Seminar, and the productive conversations started as soon as we got there.
Literally—as in, the guy holding the door open for me was an attendee who was just finalizing the acquisition of a dealership, and we started talking about the relationship between compliance and business success as I was stepping foot into the lobby.
As it turns out, the dealership executives, principals, owners, and HR personnel who showed up to the event had as much to share with us as we had to share with them. From new prospects to clients who have used our platform for a decade, everyone had feedback, stories, and questions about Compli. People told us how our system made demanding jobs manageable, helped them meet their obligations across multiple rooftops, and propelled them along their leadership journeys. At the same time, attendees wanted to know how to better tie workforce compliance outcomes to their bottom lines.
And that was just the pre-seminar chat over coffee.
Whether you were present at the seminar and would like a refresher, or didn’t have the chance to make it out this time around, here’s a quick recap of what we discussed together:
Better Dealership Compliance Starts With Better Recruiting and Retention
Virtually every dealership has some form of compliance program in place, because they know they need something in place. But ask any executive, and they’ll tell you: they’re not business to run a compliance program; they’re in business to sell cars.
More and more, however, dealers are learning they can’t have one without the other. Compliance and financial performance are complementary objectives. A robust, auditable compliance program quantifiably reduces costs associated with hiring, litigation, and regulatory action. Similarly, when dealerships treat compliance as an afterthought—through what we refer to as “good enough” compliance—their headaches multiply.
Just look at rates of employee turnover. According to the National Automobile Dealers Association, turnover at US auto dealers averaged 40% in 2016. When you consider that next to Society for Human Resource Management estimation that it takes 90–200% of an employee’s salary to replace that individual [PDF], the average 72-person dealership is looking at $1.4 million per year in employee turnover.
Three ways dealerships can take action and use an automated compliance system to better retain and engage employees.
Essentially, all of these steps are components of a responsible, caring approach to your workforce. The more that employees feel that their employer is looking out for them, the better they’ll perform their roles. Of course, not every dealership has the resources to hand-hold every employee—and that’s where automated compliance comes in. Automation can help you put your hiring playbook into practice and increase alignment between the organization and employees at every level of management.
The Dealership Business Case for Compliance Automation
There are plenty of benefits to automation besides onboarding and retention. During the seminar, we discussed all the ways dealerships lose time and money through “good enough” compliance—think manual spreadsheets, binders, and so forth. To make our point, we cited a statistic from the Blue Hill Research Group [PDF]: organizations that use manual processes for their compliance related activities waste roughly 30% more time than organizations that had transitioned to automation.
That alone should motivate any dealership to consider automating its compliance program, but let’s not forget about the risks associated with “good enough” compliance. The average employment discrimination case, should it go to judgment—and should a judge rule in favor of the claimant—costs the defending organization $142,000, not including attorneys’ fees. Wrongful termination cases, meanwhile, average $162,000.
Obviously, a lot of claims get settled, but your rainy day fund will almost always take a major hit if you’re not taking the appropriate steps to document disciplinary actions and train supervisors. If and when a claim does come up, an automated, auditable system will allow you to demonstrate proof of compliance much faster and more defensibly than you could otherwise. Too many dealerships keep paper-based records with no electronic back-up; what happens in the event of a fire or flood?
Automated compliance can also help your dealership avoid legal action in the first place. An automated system can instruct supervisors on the likely causes of conflict and the best ways to handle everyday situations. I’m not talking about turning every member of your team into a legal expert, but empowering them with information and increasing their capacity to make a quick judgement. Supervisors should know when to take action and when to reach for outside help. It’s the difference between “I don’t know—someone else will handle it” and “you know, I saw a training on this once—let me go ask our legal counsel.”
For More from Compli’s 2017 Florida Auto Dealers Seminar, Get in Touch With Us
This is just a small sampling of the information we shared with our audience at the Florida Seminars last month. Other topics from our partnering sponsors included advertising compliance, tax updates, and pending litigation about dealer competition rules. Did you know that, in Florida, a dealership’s franchises must be at least 20 miles apart (based on population densities) from each other? We discussed what that means: Is it 20 miles as the crow flies? Is it measured from the edge or center of your dealership?
We also complimented another sponsoring partner’s presentation on another hot topic: cybersecurity. A week after the WannaCry ransomware outbreak, which some have called the biggest cyber attack in history, we spoke with our audience in Florida about how Compligo contains training content to inform employees on how to detect the signs of a breach and be more cognizant of their email and internet activities.
If you would like to talk about any of these topics—and see how your organization can incorporate smart compliance practices into your business for better outcomes overall—get in touch with us. We’d love to show you how Compligo makes dealerships more accountable, effective, and successful.