RV PRO

July '18

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162 • RV PRO • July 2018 rv-pro.com B U S I N E S S morning, more bright-eyed faces were looking over those once vacated desk- tops. There was an abundance of recent college grads willing to try taking a bite out of the Big Apple. Performance Outweighs Credentials Therein lies the effect of the market. Because there were so many people wanting to "try out" New York City, the wage was artificially low. They all had the requisite skills and training. They all could potentially fill the role. What ended up as the key determinant for longevity and increases in pay was their performance. I should let you know that compen- sation for those who remained increased rapidly as those who wouldn't or couldn't perform were weeded out. At that later point, companies had to compete for the better people with a higher compensa- tion structure. The market "evened out." As a footnote, my daughter thrived in the city. She keeps that N.Y.C.-based job to this day, even though it's remote from Atlanta, where she moved with her husband and our grandson. If I sound like a proud papa, I am! I Must Apologize All that is to point out that the market sets the level of compensation. It is really the only thing that does. Before we get into specific structures for comp in the dealership, let me make another point. It's by way of an apology. Here's the way we've looked at the market over the past 20 years. And I've been guilty of my part in this. People would ask me how much they should pay for a certain position. My response – and I'm not alone in this – was to sug- gest they look at what the car business pays for someone in that position and pay a bit less. The broad assumption has been that the RV dealership doesn't pay as much as a car dealership. I've come to see that as wrong thinking. What sort of candidate could you attract to the technician position if you were able to say that the top pay in that role was, say, $40 or $50 an hour? Do you suppose your recruiting would be easier? It becomes more reasonable when the tech pay is locked in as the cost of sale and the tech pay is in lockstep with billed and paid hours matching, as it does under flat rate systems. As the old saying goes, if you pay peanuts, you get monkeys. Structuring Dealership Pay Plans Let me shift gears a bit here and talk about the structuring of pay plans in an RV dealership. While there are cre- ative ways out there, I'd like to think about the fundamentals. There are just a few things to keep in mind in getting a pay plan set up. I want to list them for you here: 1. It is always best to pay based on a variable component. I'm using the term "variable" in the sense of "sales." That is, pay for performance by basing as much of the comp plan on commissions or bonuses as is possible. The role and the comfort level of the person typically filling that position has a balance to be struck. Salespeople will be willing to accept a plan based nearly entirely on commissions. Some techs are like that on flat rate. Pay for a service writer usually needs to give more security in the form of a regular salary or hour- ly-based plan. 2. As a rule, it is not wise to pay based on revenue. There are a couple exceptions I'll mention in the next point. Here's what I typically see: Someone gets the idea to pay writers or parts counter people on the sales they make. What they fail to consider is that every time there is a price increase, they just gave out a raise. And they did so with neither a change in the employee's performance nor a review process. Those are the pay plans that get out of control most quickly. 3. The two exceptions are the finance With the RV industry in expansion mode, the need to hire quality employees has taken on added urgency.

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