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How To Create A Warranty Watchdog

First and foremost dealerships must institute and promote effective practices for hiring success. Research shows that hiring the wrong warranty administrator can cost a dealership $30,000. Remember, most dealers operate at a 2% net profit margin. So if a warranty administrator loses $100 it will take $5,000 in sales to make up.

The high turnover rate indicates that most dealers do not follow planned steps in the selection process, which leads to disorganization in the overall recruitment system.

Below is the hierarchy of the selection process that should be followed:

  1. Preliminary interview
  2. Completion of application form
  3. Interview with service management
  4. Employment tests
  5. Background investigation
  6. Medical examination
  7. Selection by service management
  8. Dealer principal interview
  9. Realistic job preview
  10. Hire decision

Let's take a look at a couple of these elements:

1.) Job Description - A good job description is a performance prescription. It describes and prescribes the knowledge, skills, activities, and behaviors required to perform the job satisfactorily. That means everyone knows exactly what is expected of them. You can use job descriptions to:

  • Write ads that accurately reflect the duties and qualifications of an open position. You'll attract a more suitable pool of potential applicants
  • Send or give to potential applicants to review before they fill out an actual application so they'll have a realistic view of the job. You'll spend less time screening out applicants who misunderstood what was required and whose skills are inappropriate
  • Make sure you and the new hire have covered all the bases during orientation
  • Plan additional training for both new and previous hires
  • Measure performance for employee appraisals
  • Serve as a guide for performance improvement plans
  • Provide documentation (along with job standards, facts, and figures) and reduce the risk of legal problems in case of termination

2.) Personality Analysis Tests - Personality profiling is a must. Otherwise we get square pegs and round holes. After profiling thousands of top warranty administrators, J&L has come up with a candidate evaluation to determine likelihood of success.

There are seven distinct factors used to measure applicants against. They are:

  • Leadership ability
  • Stress factors
  • Need for self improvement
  • Can they handle desk work
  • Are they task or people oriented
  • What level of job structure is needed?
  • But most importantly… Do they have a high level of conscientiousness? These type of people are very detail oriented. They want to do things right. They want to be accurate and set high standards for themselves. They are naturally organized, logical and analytical.

There is such a thing as a perfect warranty administrator. Testing can help dealers find that right person.

3.) Quantitative Testing - Some dealers fall into the "experience trap". They want to hire someone who they do not have to train.
Beware: The goal needs to be to hire the best qualified, not the most experienced. People can be trained.

If you do hire for experience, then knowledge must be verified through quantitative testing based on manufacturer specific processes.

Once the hiring process is complete, the next step is to implement a training process.

4. Training Process - Utilizing the "Job Description" we must now plan to integrate the person into the new position to insure their success:

  • Written procedures - internal policy manual and written job procedures (like ISO 9002)
  • Manufacturer specific process training (immediate)
    - Classes
    - Interactive distance learning
    - Expert one-on-one training
    - Signed confirmation of P&P knowledge
  • Measurable specific goals
    - Reject rate
    - Turn around time
    - Etc.
    NOTE: Can be part of bonus program but not to be based on claim dollar volume.
  • Signed integrity statement

5.) Continuing Education - Warranty administration is not a static position. The type of highly, self-motivated individuals needed for "Watch Dog" positions are continually looking to learn.

There are manufacturer administrative messages, refresher courses, and bulletins, but what warranty administrators seek is knowledge specific to their professional position.

Top warranty administrator's want:

  • Interactive stimulation
  • High level of challenge
  • Information that is applicable to daily frustrations
  • Peer support
  • Sources of accurate help when needed