It already uses pension benefits and additional holiday entitlement to reward team members for long service, and gives ad hoc cash rewards for star performers at each year-end. However, he feels inspired by retail group John Lewis’s method of publishing regularly to staff how the company is doing and rewarding all its workers with a share of the year’s profits.
Putting such incentives in will require confidence that the car market won’t turn again, Reeve said, because it would create expectations that must be matched. Pension auto-enrolment has also been a major investment – previously only about half of the workforce were in the pension scheme.
The group is also expanding its teams to enable existing staff to focus more on the customer experience. Reeve gave the example of service advisers now being trained to upsell. This requires them to spend more time with the customer – time they won’t have unless more people are brought in.
He wants to tap into the young people out there who want work, he wants the right people and, with the academy in place, he hopes some of them will help to run the business one day. He acknowledged that he faces finding a balance between investing in his workforce and keeping costs under control, but said the group has never been in better shape to invest in people. “Part of this job is you have an obligation not just to your manufacturers, but also to the towns and communities you’re in, and I feel we’ve not got a better balance in trying to be an employer of choice,” he said.
“As I said, 60% of our senior people are home-grown, that shows there is a career path. As we get bigger, that growth will put more pressure on us, so the biggest thing is making sure we can get the right people and develop them. The right people will reduce the problems.”
Candidates undergo telephone interviews to make a shortlist and applicants for senior posts are interviewed by a panel including the dealership’s general manager and the relevant group manager. In addition, two regionally based HR managers work with Pentagon’s HR director to support the management of every dealership on personnel issues such as staff sickness, disciplinary procedures and recruitment. Reeve is pragmatic about his people – that some may change, that things happen in their lives, and that the motor industry is about long hours – and he wants support there for his general managers when it is needed.
Expansion is certainly on the cards for Pentagon when it has the right opportunity. The ambition is modest – one or two more sites per year, likely with its existing manufacturer partners – and with its people strategy now in place, it can be assured that integration should bring fewer surprises.
Whose margin is it anyway?
“I remember the time when you used to get your margin and make your profit,” said Trevor Reeve, who launched Pentagon in a joint venture with Vauxhall Motor Sales 23 years ago.
“Now it’s a challenge because of the amount of what once was a retailer’s margin that has been put at risk through various standards.”
Due to the current incentive model, he believes franchised dealers are forced to get a flying start each quarter because they cannot afford to miss the money at risk through targets and back-end bonuses.