HUMAN CAPITAL INDEX

Employees continue to be the single largest expense in a dealership business and there is no doubt the effectiveness of your people is the difference between outstanding and average results, which is more pertinent in challenging trading conditions. Understanding the key influences that differentiate high performers is difficult, but critical in unlocking the full potential of your workforce.

BDO have developed a framework to assist in understanding the impact your workforce is having on achieving your strategic ambitions. Unlike more traditional disciplines, human resource (HR) professionals have struggled to develop a method of valuing and assessing the impact its workforce can have on the success of a dealership.

In conjunction with our clients, we have developed a methodology that moves us closer to understanding the critical levers that influence a dealership’s performance through its people. The BDO Human Capital (HC) Index looks to combine critical workforce elements, such as availability, capability and engagement, as well as labour cost measures, to determine which of these elements can lead to more sustained dealership performance and improvements in workforce productivity. The BDO HC Index will allow leaders to focus attention on the areas that provide the highest return on investment.

Whilst the BDO HC Index can draw attention to the critical workforce dynamics of a dealership, it is heavily influenced by the industry and the organisational focus. A more dynamic industry, such as automotive retail, will need to pay more attention to its workforce capability and ensure emerging capabilities are identified and addressed early and regularly.

Higher performing dealerships tend to have a BDO HC Index result of 6 or above, whereas the below average performing dealerships tend to see results below 4 on the 10-point BDO HC Index scale. What appears to have the greatest impact on performance for higher performing dealerships is their ability to retain key elements of their workforce.

Accepting, of course, that there are many factors influence overall performance, the largest single driver relates to people. It comes as no surprise then that there is a positive linear correlation between the BDO HC Index result and the net profit to sales achieved for dealerships reviewed.

For further information on the BDO Human Capital Index, please contact the following BDO representative-

CRISTIAN ULLOA
Partner – Human Capital
Direct: +61 7 3237 5950
Mobile: +61 404 800 931
Cristian.Ulloa@bdo.com.au

MARK WARD
Partner – Automotive
Direct: +61 7 3237 5744
Mobile: +61 402 443 566
Mark.Ward@bdo.com.au

RANDALL BRYSON
Partner – Automotive
Direct: +61 7 3237 5792
Mobile: +61 418 778 265
Randall.Bryson@bdo.com.au

 

Randall Bryson
Partner,
BDO Automotive

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