Staffing Metrics for Parts Departments
Dave Vance studies his employees’ performance metrics like a big league manager eyes batting averages or ERAs. He looks for tendencies, or trends, and ponders how to improve them.
And, similar to how baseball teams intensely study analytics data these days, Vance takes a deep dive into performance metrics to gauge what they truly mean to his employer.
“I’ve worked for some stern organizations that really looked into individual sales,” explains Vance, currently the parts manager at Right Honda, in Scottsdale, Ariz. “It made me look at all the avenues of what [the sales statistics] meant, and how to motivate people with them.”
Vance studies his parts department employees’ performance metrics daily in Right Honda’s dealer management system, typically early in the day. He continuously updates the information and stores it in a spreadsheet that’s shared with everyone from the dealership’s owner to the least tenured parts employee.
He uses the spreadsheet to make sure everyone in the parts department is on the same page, and motivated to hit benchmarks. Vance is a firm believer that you can’t improve what you don’t measure.
Without seeing their performance metrics, Vance says, parts employees “wouldn’t have a goal to reach. They wouldn’t know whether they’re doing better or worse.”
Vance, a veteran of nearly three decades in the auto industry, explains how to ensure that parts department metrics remain high.
Monitor Gross Profit Average Closely.
In Vance’s view, gross profit average is a clear indicator of the value an employee is providing his or her parts department. Vance wants an indication of whether or not his staffers are try to make every sale they possibly can. An ideal monthly benchmark, at Right Honda, is $47,000 per employee (the facility’s benchmarks are based on forecast predictions built off prior years’ financial figures, and the annual forecast is largely created by upper management).
“I watch those numbers, and if they start fluctuating off of an average, we can address it and see why—if there’s a certain coupon affecting it, or if someone’s giving the store away to try and increase their sales,” he says.
“If [gross profit average] goes down drastically, I can address it quickly and find out why… And, if it’s on the rise, I can find out what they’re doing right and train the other counter people.”
Push Monthly Sales Per Employee.
Few performance metrics gauge a counter worker’s productivity as well as sales per employee, Vance says. He hopes to see each employee produce $125,000 in sales per month.
“I track monthly sales by employee and average it based on month-to-date, or a prior year,” he notes, to see “if they’re staying consistent, and if they’re staying consistent with the other counter people.”
If Needed, Offer Incentives.
Occasionally, members of Right Honda’s parts department will be offered performance bonuses—perhaps $200—if they can meet monthly goals for sales or profits.
“I’ll offer a spiff program for my guys to be able to raise the bar, the goal,” Vance says. “If there’s a month that I know is consistently a downward trend for the year, I’ll push a spiff out there, to get them to overcome a certain goal.”
Share Figures with Staffers.
If Vance studies his employees’ performance metrics like a big league manager, then his department’s Google spreadsheet serves as the box score. It helps indicate who’s performing admirably, and who’s stuck in a slump.
The spreadsheet clearly indicates the profits and overall sales that each employee has produced. Vance feels that list of performance metrics “raises the bar for the individual that’s struggling.”