e-MPLYOEE retention

Introduction
• An employee leaving a company is like a stone thrown in a
still pond: ripples of disruption spread through the
organization, creating unbalance. In any business, this
unbalance can be expensive.

• The cost of turnover for a company is more than the cost

of retention. Turnover can cost a company in recruiting and
administrative fees and training costs. Lack of attention to
core reasons from employees on their way out, and slower
productivity until new recruits hit the floor can be costly.
Consider an example, someone who owns an
outdated, overused vehicle but won't even entertain the
thought of trading it, even though they can well afford to
upgrade. Because, the owner of the vehicle has probably
invested substantial time, money, and care into keeping it
in tip top condition. Now it seems senseless to throw it all
away. Plus, the cost of replacing the vehicle would be
enormous compared to the cost of upkeep on the old
one. Even with inanimate objects, we become
accustomed to Its personality and quirks, and we develop
a common trust between the object and ourselves.
 Car Dealership Industry
• Booming Industry (Statistics Nissan Motors have 19 dealerships in India and have 16 more
coming up within the next two years.)
• Small experienced pool of human capital market; forced to recruit fresher's.
• Front end is a sales focused Job, where targets matter.
• Peak Months: Mar-Apr and Sep-Oct
• Offer a wide range of services from helping customers sell their used car to new car financing,
insurance, extended warranty, annual maintenance contract and after sales service.
• High sales force turnover rate: 7-8%
• To satisfy customer service needs, many dealers provide evening and weekend service and
employees work longer hours than other industries.
• The competitive nature of selling is stressful to automotive salespersons, as they try to meet
company sales targets and personal incentives as their pay package for a fresher is only
between 6-10,000.
• Most automobile salespersons and administrative workers spend their time at shared desks
in dealer showrooms.
• The number of workers employed by automobile dealers varies significantly depending on
dealer size, location, makes of vehicles handled, and distribution of sales among employees-
anywhere from 4 to 20 cars a month per employee.
• Salespersons success in selling vehicles and services determines the success of the dealer.
 How much does it cost to set up a car
dealership in India
Guesstimates on financial implications towards starling a car dealership

1. Land / Real Estate: This is the biggest number and would vary city 2 city. However, many dealerships
prefer to lease rather than purchase property outright. Lease rates may vary between 5 lacs - 15 lacs for
the dealership property in Mumbai. A decent size for a dealership can be anywhere upward of 3,000 sq. ft.

2. Interiors and infrastructure: This would include design, renovation, computers, client management
softwares, printers, inverter systems, beverage machines, brochures etc. Figures can range anywhere
between 75 lakhs to 1.5 crores.

3. Other expenses: Recruiting / training staff members, launch advertising, website development,
insurance (for dealership, employees and office inventory) etc. About 25 lakhs. Cost of recruiting a single
employee is about 10,000 to 15,000.

4. Merchandise Inventory: Depends on how many cars the manufacturer requires the delearship to have
on-hand at all times. Concorde motors had several cars most of which were Tata Nano in the basement.
This figure could be 1.5 crore +.

5. Service facilities: About 3 crore to set up. Concorde motors are still in the process of setting one up.
Some manufacturers (Toyota included) follow the 3S rule where each dealership has the sales, service and
spares under one roof.

The most important factor is management skills and a dedication to customer service. Manufacturers are
very particular of how you manage their customers.
 Major Players
Stiff competition among the market players, domestic as
well as global
• Maruti Udyog India Ltd
• Tata Motors Ltd
• Nissan India Ltd
• Hyundai Motors India Ltd
• Honda India Ltd
• Chevy India Ltd
• Ford India Ltd
• Force Motors
• Ashok Leyland Ltd
• Mahindra & Mahindra Ltd
 Objective Of The Study
• To identify how to reduce employee turnover
Management Perspective
• To know how to retain employees
Employee Perspective
• To find how much pride and esteem employees have
being attached to their organization
• To know how managers can play a key role in
retention strategy
To identify how to reduce employee turnover,
from the management perspective 2 case
studies were done, at 2 car dealerships',
Concorde motors and Ichibaan Nissan Motors
 Concorde Motors – Tata Motors
SVIMS\HR Emp Retention\HR Project Concorde
Motors.docx
 Case Study I Concorde Motors
• Follow core values of parent company Tata Motors.
• Always pay salary on time.
• Focus on hiring procedures and make sure that fresher's
are prepared for the sales job.
• Do everything to retain a tenured employee from leaving.
• Job rotation to make work more interesting.
• Increase responsibility with buddy system.
• Performance review and feed back given on a half yearly
basis.
• Incentives given for 70% of targets met.
• Road map of a career path in the organization.
 ICHIBAAN NISSAN
SVIMS\HR Emp Retention\nissan_interview.doc
 Case Study II - NISSAN
• Hire fresher's and mould them.
• Only retain revenue generating employees.
• Caliber and willingness to work are important traits.
• Give tenured employees responsibility.
• Have faith in them, trust & respect them.
• Provide Information, knowledge and training.
• Give feedback on performance.
• Recognize & appreciate their achievements.
• Keep their morale high.
• Turnover leads to more turnover, good will of the company
hurt.
• Create a disciplined work environment.
To know how to retain employees from the Employee
Perspective, a questionnaire was prepared and results
measured on 6 parameters with a five point scale.

QUESTIONNAIRE_for_Employees_on_Retentio
_-2.docx
 Talent Management System

Recruitment & Selection Training & Development Compensation

Organizational Environment Support Leadership

Development

Performance Appraisal Relationship Career Development

 Major Aspects of Employee Retention
• Compensation – Rewards and Recognition, timely
salary, incentive based performance
• Organization Environment – Pride for working in the
organization, Recreation activities, Core Values
• Personal Growth – Growth opportunities and variation
of tasks, Planning your future with your organization
• Management employee relationship – Appreciation of a
job well done
• Support for getting the job done – Employee
participation and support from immediate supervisors
• Job itself – Targets are achievable, willing to go the
extra mile to complete the job
 Formula for Retention
Retention = AJ + Eid + C.S + PG + OE + C

AJ = Appropriate Job Choice

Eid = Early identification of vulnerable employees
CxS = Continuous Support
PG = Personal Growth
OE = Organizational Environment
C = Compensation
Pride and Esteem
Key Role of Managers in Retention Strategy

“Is it true people leave Managers and not Organizations?”

The answer is YES!!

Manager’s Role
• Creating motivating environment
• Standing up for the Team
• Providing coaching
• Delegation Extra Responsibility
• Focus on future career
 Conclusion
• The process of retention is not as easy at it seems.

• There are so many tactics and strategies used in

retention of employees by the organizations.

• The basic purpose of these strategies is to increase

employee satisfaction, boost employee morale hence
achieve retention