Workforce and leadership development is a critical need for the future growth of a dealership’s business. That development must extend beyond training on the tasks needed to do one’s job. It requires so-called people and soft skills training as well. There is financial literacy training that future managers and leaders need.
“Dealers do not approach recruiting or training in a strategic way. That is partly because of time. We’re plugging a hole. When the hole becomes open, we’re not investing time to work on the business. We’re too busy working in the business,” says John Schmeiser, CEO of the Western Equipment Dealers Assn. (WEDA).
“And if we’re working in the business, working on the business suffers strategically. You can’t think of your business strategically if you’re putting out fires all day or dealing with customer issues or manufacturer issues or staff issues.”
WEDA and Farm Equipment conducted the survey of dealership CEOs over 2 weeks in November 2021. The results are based on 62 responses, representing 437 locations across the U.S. and Canada with 10,941 employees. The average number of locations per dealership was 7. By brand, 35.5% were John Deere dealers, 21% were New Holland, 17.4% were Case IH, 17.4% were Kubota, 11.3% were AGCO and 14.5% responded with “other.”
“We know that workforce development is not a new topic, but it becomes more and more relevant every year, and this year’s survey confirms it,” says Michael Piercy, vice president of dealer development with WEDA’s Dealer Institute. “Based on some of the results, you will find it’s not only relevant, but is now a major top concern for many dealers.”
According to the Cost of Doing Business Study, dealers’ average annual spend on training on an annual basis across North America is $30,000, Schmeiser says.
“When you look at the requirements from our manufacturers just on product training or service schools, that’s the $30,000 right there. We have a significant amount of our dealerships that are investing over a quarter of a million dollars on an annual basis in training because they look at training as an investment,” he says.
“I think that’s one of the barriers that we still have here in addition to time is training is looked at as an expense or training is looked at as a necessary evil because the manufacturers are requiring it and we will check off a box to meet dealer standards.”
Additional survey results are broken down in the infographics below.
How’s Your Bench Strength?
Dealer comments included:
“The challenges associated with managing a team and staff through the COVID era has been crushing to leaders. Responsible managers are trying to abide by local, state and federal mandates while trying to manage staff, many of whom are in rural areas. They would just rather quit than comply.”
“We have the talent, but most are unwilling to move, which is what we need them to do to advance.”
“Our issue is having sufficient staffing, period. Advancing roles is difficult when simply having enough people in the building is the larger issue.”
Where’s the Biggest Immediate Need?
When it comes to the immediate needs for senior or mid-level management, it’s no surprise that service managers were once again ranked No. 1. The most noticeable jump from the previous year was needing a store manager or general manager at 46%, a 6% increase. The need for parts manager increased by 5% over the previous year’s survey to 34%. All other management positions were fairly consistent to last year’s results.
Dealer comments included:
“We’re still at the basic level of growing our mid-level managers’ skill sets. They are good functional managers but do not have highly developed leadership skills. This is what is needed to attract and retain the talent that we need.”
“I would rank the need for a good service manager — one with the right mixture of technical and relational/leadership skills — to be the highest.”
“One or two unexpected departures of key employees and we are in trouble.”
Long-Term Needs
Service managers were once again ranked as the top long-term need by dealers. In the latest survey, 60% of dealers ranked service managers as the biggest need, up from 57.1% in the previous survey. This was followed closely by parts managers at 58%, which just shy of 35% of dealers last year ranked as the biggest need. Schmeiser noted as the most significant jump from last year.
Dealer comments included:
“Looking ahead to succession in 3-5 years, will need a strong overall aftermarket manager.”
“We are 5-7 years from needing department managers, unless a health issue shows up.”
Dealer Takeaways
Best Training Sources
Nearly 47% of dealership CEOs said there were adequate training sources available. When asked what their preferred source of training was, 45.2% said internal training/grooming by existing employees was their top choice. This is down slightly from 50.8% who responded the same way last year. Nearly a third of CEOs said they prefer independent training and consulting firms.
Dealer comments included:
“Hybrid of internal and independent. Have found that the manufacturer training is not beneficial to dealers, but rather a ‘tool’ to offload manufacturer duties to dealers; a method by which to ‘train’ the dealer to perform tasks that the manufacturer should have their own staff performing.”
“Need to incorporate more external, professional, ongoing management development, mostly revolving around people management.”
Self-Check — How Are You Doing?
CEOs were asked if they were doing enough to develop people to step into senior/mid-level management roles. Just over two-thirds (66.3%) said no and just 16.1% said they were doing enough. Another 17.7% said they were unsure if they were or not.
Dealer comments included:
“It is bold of me to say yes, but we have just embarked on a fully comprehensive and intentional leadership development track for our ‘NextGen”’leadership group using a third-party training resource.”
“Hasn’t been a specific focus. Just on the job training to give them more responsibilities and they gain experience.”
Want to Learn More?
View the webinar — Equipment Dealer Industry Workforce Development Survey Results — on Farm-Equipment.com.
Copies of the survey as well as breakouts by individual lines — AGCO, Case IH, John Deere, Kubota and New Holland results compared to the industry averages — are available from the Western Equipment Dealers Assn. Contact Michael Piercy (mpiercs@westerneda.com) or John Schmeiser (jschmeiser@westerneda.com) for more information.
What Skills Do Managers Need the Most Help With?
When it comes to the skills CEOs say their dealership managers need more training in, workforce development was the most popular answer with 80% either agreeing or strongly agreeing. “What that tells us is CEOs and owners are looking for skills and training on helping their key managers develop hiring skills. This is our topic, it’s workforce development, and it just goes right to the top and very distinctively that dealers need help in this area,” Schmeiser says.
Skill Development
When looking at dealerships of all brands, leadership training was once again the #1 need, with 70% of dealers either agreeing or strongly agreeing that their management team needs training in this area. When “agree” is factored in, the percentage goes up to 90%. Consistent with last year, operational best practices was a strong and solid #2. Another 80% of dealers either somewhat agreed to strongly agreed that understanding financials is a key issue for them. “The question most organizations are asking is, ‘Is our bench deep enough to handle future industry challenges?’ The answer most are giving is ‘no.’ This is troublesome, but fixable,” says Piercy.
Interpersonal Development Needs
In this year’s survey, the questions about skill development were expanded to include additional soft skills that may require training for managers. Strategic thinking had the largest percentage of CEOs say they either agreed or strongly agreed that their managers needed to develop this skill. “Some of this is attitude, some of this is behavior, but still these are necessary skills CEOs are looking for in their management team to help them take their dealership to the next level,” says Schmeiser.
