Today, as in the past, independent jobbers, store owners, store managers and senior level executives at company-owned store groups continue to “talk-the-talk,” saying that their people are their greatest assets. The skills and knowledge of their counter sales professionals, managers, outside sales people and delivery drivers are the differentiators that provides their stores with a competitive advantage and positions their stores as the “suppliers of choice” with traditional commercial accounts and with DIY customers.
However, investigation into this commitment and financial investment dedicated to the development and continuous learning opportunities of the “greatest asset” suggests that the aftermarket lags behind other service and retail companies. This creates the Performance Paradox.
The counter sales professional is expected to have the knowledge, skills, capabilities and behaviors to serve customers face-to-face and on the phone. They’re expected to identify the correct part for all makes and models from a universe of hundreds of thousands of parts. Transactions are to be done accurately, whether a wholesale business-to-business transaction or cash retail transaction and they are expected to “know” the questions to ask and how to ask them so that each customer receives a tangible solution to their problem.
In today’s ever-changing automotive aftermarket, auto parts stores constantly seek ways to remain competitive and profitable. Employees and store managers are being asked to increase their performance by doing more in less time. Yet, we see little investment made to provide employees with the skills and knowledge needed to increase performance.
Why is the automotive aftermarket’s retail/wholesale segment so far behind other “customer-centered” businesses? Other retail and wholesale businesses are increasing their investment to develop the knowledge, skills and capabilities of each of their employees to maximize “store/company” impact. They acknowledge the relevance of the workforce learning and performing and the impact it has on business results.
Compare The Numbers
According to the 2006 State of the Industry report, produced by the American Society of Training and Development’s (ASTD) annual benchmarking report that collects data from a consortium of private and public sector companies, businesses are making a substantial investment in employee learning and development. High performing companies are using business measurement tools to gauge the efficiency and effectiveness of employee training and learning functions.
The report revealed that the learning investment per employee increased by 4 percent from 2004 to 2005. The average annual investment per employee for learning and development increased to $1,424 in 2005.
Another benchmark the automotive retail and wholesale segments can use to compare themselves with other retailers and customer-centered businesses is the investment in learning as a percent of total payroll. According to the report, other companies are investing 2.2 percent of their total payroll costs into employee learning and development.
Other data in the report that will serve as a good benchmark for the automotive retail and wholesale segments is the number of hours of formal learning per employee annually. In 2004, other companies were providing 35 hours per employee per year. In 2005, the commitment to have the best and brightest employees climbed to 41 hours of formal learning per employee in other business segments. These businesses operate in an environment less complicated than application-specific auto parts, yet they provide their employees an average of 3.5 hours per month of formal learning on their company’s products, systems, processes and customer service.
A statement often heard in the parts business concerning employees is, “We like to grow our own.” The question that should be asked in response to that statement is, “What kind of fertilizer and nurturing does your company provide these young upstarts you are growing?”
Why Invest In Employee Learning?
Learning and training is not an expense. It’s an investment in your most important asset. The auto parts business remains a labor intensive, high customer interaction field and a service demanding industry. Moreover, who provides all these services to the customer? Employees.
What is the secret to success and profitability in the parts business? Is it availability, location, or knowledgeable and courteous people? Ageless wisdom would say it is a combination, a recipe, which requires all three elements to be present. A good location with lots of inventory and an unskilled uncaring staff will not reach its full market share potential or provide the desired business results.
Walt Disney wrote, “You can dream, create, design and build the most wonderful place in the world…but it requires people to make the dream a reality.”
Chuck Udell, an aftermarket veteran and senior partner in our firm, serves on the national review committee at ASTD, where he reviews the training programs and employee development programs submitted by our country’s leading businesses. This position allows him to see various training programs and the level of commitment other retailers, wholesalers and customer centered businesses place on employee learning and development. What are the best companies doing that our industry isn’t? They are investing in programs that improve the knowledge, skills, behavior and capabilities of their employees. And it is impacting their business results and profits.
Author Jim Collins coined the phrase “The Brutal Truth” and the brutal truth for the senior management and owners in the auto parts industry is, “If you want your employees to do more, you have to do more.” You have to invest in your most important asset, employees, just as you invest in your other assets. Investing in employee learning and development provides an excellent return on investment while improving overall business results.