OFFICIAL PUBLICATION PLANNING FOR DEALERSHIP SUCCESSION PUB. 3 2023 ISSUE 1 BUT DEALERS SHOULD NOT WAIT A Delay in the Safeguards Rule,
THERE’S A LOT RIDING ON YOUR LOT. WE CAN HELP PROTECT YOUR INVESTMENT. • Property and Casualty Insurance • Dealer Open Lot • Workers‘ Compensation, ADMIC • Employee Benefits • Dealership for Life Sales and Service Training • F&I Products and Training • Sales and Service Lane Training • Cyber Liability • Life Insurance and Personal Lines • HR Tools and Resources Reach out to John Foresman (jforesman@uscky.com) or Richard Goss (rgoss@uscky.com) or call us at (502) 244-1343 today to protect your business. The Underwriters Group has been there for all your auto dealer needs for the last 80 years, and we continue to be innovators in the marketplace. We offer a full suite of risk management needs including: A privately owned, and truly independent, risk management firm helping businesses protect their people, assets and future. | USCKY.com
We’re more than a financial partner. We’re an invested one. True relationships matter. We don’t take this lightly. The best are built on a deep understanding of your short- and long-term goals and always backed by thoughtful, strategic advice in support of your vision. With full-service financial solutions and a deep bench of industry expertise, we’ll build a team around your organization to focus on your success. So, let’s drive further—together. To learn more, contact Jason W. Smith, head of Dealer Commercial Services, 407-237-4011 or Jason.w.smith@truist.com. Truist.com/DealerServices © 2022 Truist Financial Corporation, Truist, Truist purple and the Truist logo are service marks of Truist Financial Corporation. All rights reserved. Truist Securities is the trade name for the corporate and investment banking services of Truist Financial Corporation and its subsidiaries. Securities and strategic advisory services are provided by Truist Securities, Inc., member FINRA and SIPC. | Lending, financial risk management, and treasury and payment solutions are offered by Truist Bank. | Deposit products are offered by Truist Bank, Member FDIC.
©2023 Kentucky Auto Dealer | The newsLINK Group, LLC. All rights reserved. Kentucky Auto Dealer is published four times each year by The newsLINK Group, LLC. for Kentucky Auto Dealer Association and is the official publication for this association. The information contained in this publication is intended to provide general information for review, consideration and education. The contents do not constitute legal advice and should not be relied on as such. If you need legal advice or assistance, it is strongly recommended that you contact an attorney as to your circumstances. The statements and opinions expressed in this publication are those of the individual authors and do not necessarily represent the views of Kentucky Auto Dealer Association, its board of directors, or the publisher. Likewise, the appearance of advertisements within this publication does not constitute an endorsement or recommendation of any product or service advertised. Kentucky Auto Dealer is a collective work, and as such, some articles are submitted by authors who are independent of the Kentucky Auto Dealer Association. While the Kentucky Auto Dealer encourages a first print policy, in cases where this is not possible, every effort has been made to comply with any known reprint guidelines or restrictions. Content may not be reproduced or reprinted without prior written permission. For further information, please contact the publisher at 855.747.4003. CONTENTS 8 10 18 6 President's Message Our Hard Work Pays Off Jason Wilson 7 2023 KADA Executive Committee 7 Who we are at KADA 8 A Delay in the Safeguards Rule, But Dealers Should Not Wait By Hao Nguyen, Esq., Chief Legal Officer, ComplyAuto 10 Planning for Dealership Succession Dividing Multiple Dealerships Amongst Family By Duncan Moseley, Managing Director, Business Transition Advisory Group, Truist Wealth 13 Drive Our Industry Forward by Contributing to our KADET Fund 14 Over-Sharing in the Workplace? Why Your Company May Need a TikTok and BeReal Policy By Fisher Phillips 18 How Automotive Digital Retailing Can Affect Your Dealership 20 The Great Retention Tips to Retain Your Employees In 2023 23 2023 Important Dates To Remember 24 KADA Preferred Partner Programs 4 KENTUCKY AUTO DEALER
Reliability is important. Equal Housing Lender. ©2021 M&T Bank. Member FDIC. CTD-903 210908 V1 Providing stability to auto dealerships since 1951. From the people closing the deal to the vehicles themselves, dependability is everything in the auto industry. Which is why dealers choose to work with M&T Bank for the long haul. Through the industry’s highs and lows, our clients have come to rely on our steady support. We’ve learned the ins and outs of the business along the way, enabling us to deliver the right products - from floor plan to construction financing, merchant services to purchasing cards, and investment management to 401(k) advisory and wealth planning. It’s this dependability that helps dealers like you do what they do best - run their businesses. That’s what understanding what’s important is all about. Get in touch with M&T today. Timothy Flynn Dealer Commercial Services tflynn2@mtb.com 412-398-7655 mtb.com/dealerservices
PRESIDENT'S MESSAGE JASON WILSON Dear Kentucky dealers, The past few months have been busy and productive at KADA. We have been focused on the 2023 Legislative Session, which just recently came to a close. From meeting with legislators to trips to the Capitol to countless phone calls with our KADA Legislative Affairs Team and Legal Counsel, I can confidently say that our hard work paid off. Our main priorities, House Bill 150 and Senate Bill 163, were met with success. SB 163 is critical because it prohibits manufacturer direct sales and requires retail reservations to be assigned to dealers. It also ensures that military members are not required to have a Kentucky driver’s license to register a vehicle in the state. HB 150 guarantees that franchise dealer rights are even further protected, which is imperative in our ever‑changing world. These important pieces of legislation will benefit our industry for what will hopefully be years to come. Thank you to everyone who reached out to legislators. And thank you to our 2023 Chairman, Joe Cummins, and Board of Directors who actively participated in pushing our agenda forward. We’ve also been busy working alongside our Preferred Partners Programs to offer you the best tools and resources to help your dealership thrive. From webinars to spotlights in our Kentucky Horsepower podcast to highlights in our email communications, our goal is to provide you with opportunities to improve your business and develop your people. Please pay attention and participate in these partner initiatives. You have the opportunity to support your business, your association and your industry. As we cruise into spring, we are focused on our 2023 KADA Convention. This year we will be joined by dealers from Virginia, West Virginia, and Maryland. We will also be celebrating the 85th birthday of KADA. We have lots of fun activities planned and a great lineup of speakers that will have you walking away with tips, trends, and tools to succeed. Please register today — I hope to see each one of you there. We also have our Annual Golf Tournament on Monday, September 18 at the Frankfort Country Club. Start getting your team together and register online at kyada.com. I’m looking forward to seeing you on the green! As always, I’d like to thank you for your support and participation. Jason Wilson OUR HARD WORK Thank you to everyone who reached out to legislators. PAYS OFF 6 KENTUCKY AUTO DEALER
2023 KADA EXECUTIVE COMMITTEE Moving the industry forward by advocating for car dealers to ensure that our members are being heard and understood by legislators. WHO WE ARE AT KADA Learn more about what we do by scanning the QR code below: https://www.youtube.com/watch?v=-wWpYIDMUCU JOE CUMMINS CHAIRMAN DON FRANKLIN AUTO GROUP DAVID MOORE CHAIR ELECT MOORE FORD CHRYSLER CENTER ROB MARSHALL VICE CHAIR MARSHALL AUTO GROUP RAY COTTRELL, JR. TREASURER RAY’S FORD CHRYSLER DODGE JEEP RAM NANCY SPARKS PAST CHAIR KERRY AUTOMOTIVE GROUP KIM HUFFMAN PAST CHAIR NEIL HUFFMAN AUTO GROUP CARL SWOPE PAST CHAIR SWOPE FAMILY OF DEALERSHIPS SHANE COLLINS PAST CHAIR BILL COLLINS FORD JIM REYNOLDS PAST CHAIR WALTERS AUTO GROUP DAN RENSHAW NADA DIRECTOR RENSHAW AUTO GROUP WWW.KYADA.COM 7
A DELAY IN THE SAFEGUARDS RULE, BUT DEALERS SHOULD NOT WAIT By Hao Nguyen, Esq., Chief Legal Officer, ComplyAuto In this article, we discuss the Federal Trade Commission’s (FTC) delay of the effective date of the revised Safeguards Rule (“Rule”) and its practical impact on your dealerships. We will then explain why you should not wait to implement data protection and cybersecurity safeguards at your dealership because the FTC will still come after you under another section of the FTC Act that gives them broad authority. Safeguards Rule – Some Requirements Delayed Until June 9, 2023 The FTC gave dealers across the country an early Christmas present when it announced on Nov. 15, 2022, that it is extending the deadline for the Rule by six months. However, it is important to note that this extension only affects some of the requirements and will make them effective on June 9, 2023. Specifically, the provisions that have been extended to June include the following: • Designating a qualified individual to oversee the information security program; • Completing written risk assessments; • Monitoring the access and use of sensitive customer information; • Completing a penetration test & vulnerability scan; • Encrypting systems containing customer information; • Training employees on security awareness; • Conducting Vendor & Service Provider risk assessments; • Implementing MFA on all systems containing customer information; and • Creating and updating a device and systems inventory. Notably, the provisions that have not been delayed (and never were) are: • Creating a written Information Security Program (ISP) for your organization; • Obtaining signed contracts from your vendors (“Service Providers”) who collect customer information, promising to implement reasonable safeguards; • Periodically assessing your Service Providers to ensure that they have reasonable safeguards in place; and • Implementing a system capable of detecting attacks and intrusions on your network. Dealers Should Not Wait to Implement Safeguards Rule Solutions On paper, the delay sounded good. However, once you dig into the details, the delay is not as good. Because some aspects of the Rule still became effective in January, dealers should not take this delay for granted. This is the time to press on in reinforcing their data protection and cybersecurity practices. Why? Firstly, completing all requirements of the Rule can be time-consuming because so many players are involved. You will need to coordinate with the vendor to oversee compliance (like ComplyAuto), the dealership staff, any Service Providers they work with (to complete their requirements), and potentially your IT company or Managed Service Provider. Unless you are working with an efficient and responsive team, natural bottlenecks may arise as one party waits on the other. Secondly, you should not “miss the forest for the trees,” meaning that the FTC should not be the main reason why your dealership is establishing these data protection and cybersecurity protocols. Yes, we want to fulfill these requirements to keep the 8 KENTUCKY AUTO DEALER
federal government at bay, but I would argue that the main focus should be to prevent data breaches and ransomware attacks! Think about the different forms of damage to your organization that could arise as a result of a data breach or ransomware attack: – Reputational damage: Dealerships are pillars in their community and word of a data breach will spread quickly. Additionally, vendors may be wary about working with you in the future. – Data breach mitigation: Depending on the level of your cybersecurity coverage from your insurance company (or lack thereof), you could be paying out of pocket for forensic professionals to “stem the bleeding,” so to speak, and try and recover what you can. – Dealership downtime: You can bet that your dealership will suffer significant delays as you try to survey the extent of the breach and work through the mitigation efforts. – Data recovery: If it was a ransomware attack that resulted in the loss of employee, customer, and dealership information, the road back to where you started will be a long one. Think of all the information that existed prior to the attack that you will now need to rebuild from scratch. – Consumer protection efforts: Depending on the extent of the breach, you may be legally responsible for the cost of providing identity theft protection measures to all of the consumers who suffered a release of their information. – State and federal penalties: Suffering a breach does not earn you any pity from the government. State and federal enforcement officials will come shortly thereafter to “pour salt in the wound” in the form of heavy fines and penalties. – Class action lawsuits: Always a significant concern for dealers is a class action lawsuit by harmed individuals who had their information either stolen or released. FTC Using its Broad Authority Under Section 5 for Cybersecurity Concerns Section 5 of the FTC Act prohibits “unfair or deceptive business practices in or affecting commerce.” Given that this clause has been around since 1914, it is safe to say that the authors did not consider cybersecurity during the time that it was drafted. Nevertheless, as a Nobel Prize laureate once said, “the times they are a-changin’” and the FTC has wielded this section as a sword to strike down businesses who have displayed poor cybersecurity practices. This has become such an issue that Brad Miller, Chief Regulatory Counsel at NADA, spoke about this during one of the educational seminars at the Dallas convention. Defining false data security or privacy representations under both “unfair” and “deceptive” terms of art since 2002, the FTC has negotiated consent agreements since then with most businesses, as many of them never wanted to test its authority over regulating cybersecurity. It was not until 2012 when a private company that had been the victim of a cyber-attack three times moved to dismiss the FTC’s lawsuit, stating that it had no authority, rather than enter into a settlement. Going all the way up to the Third Circuit, the court affirmed that the FTC does in fact have the authority to regulate cybersecurity based on factors I won’t bore you with here. Since then, there have been no direct challenges to the FTC’s authority over a business’s cybersecurity practices under this broad Section 5 and the FTC continues to use it repeatedly and effectively: • Consent order with an education technology provider for alleged poor data security practices that exposed sensitive information about millions of customers and employees. Specifically, it did not require employees to use MFA, stored information insecurely, and failed to provide adequate security training to employees. — January 2023 • Consent order with an online alcohol marketplace (and its CEO, personally) over allegations that its security failures led to a data breach, exposing the personal information of approximately 2.5M consumers. Specifically, it did not require employees to use MFA, did not limit employees’ access to personal data, failed to monitor security threats, and stored information insecurely. — January 2023 • Consent order with an online customized merchandise platform that failed to implement reasonable security measures and failed to adequately respond to several security breaches. Specifically, it stored SSNs and passwords in readable text, did not require employees to use MFA, retained data longer than was reasonably necessary, and covered up major data breaches. — June 2022 With the Safeguards Rule and the looming Motor Vehicle Trade Regulation Rule that the NADA is actively opposing, we believe that automotive retail is squarely in the sights of the new FTC commissioners. It is imperative that dealers continue in their efforts to expeditiously comply with all the new requirements of the Rule to achieve full compliance by the new deadline. If you’re feeling behind or overwhelmed, we’re here to help. Send us a message at info@complyauto.com or visit our website at www.complyauto.com to learn more about our “one-stop-shop” solution for the Safeguards Rule and our Compliance Guarantee. This article should be used as a compliance aid only and though its accuracy has been made a priority, it is not a substitute for professional legal advice. Each dealer should rely on their own expertise when using it. WWW.KYADA.COM 9
PLANNING FOR DEALERSHIP SUCCESSION Dividing Multiple Dealerships Amongst Family Middle-market business transitions are rarely simple, and family dealership transitions are among the most complex. Typically, a dealership begins after one family member opens a dealership and then decides to add more over time. Indeed, successful dealers say the best way to expand wealth in the industry is to increase the number of dealerships held. As the number of dealerships grows, so too does the number of family members involved in the business. An owner’s children may decide to work in the business, and some might even make it their career, while others may choose to work in another field. As their children become adults, dealership owners begin to wonder how they can plan for the succession of their business and the distribution of its assets amongst their children without risking the business itself or family relationships. When owners have multiple dealerships and several children working in the business, they ask, “Should I put my children in business together, should I separate the dealerships and divide them amongst my children, or should I just sell the business altogether?” When owners decide to keep the business, they want to know how to provide for their children with other careers. Take Marty, for instance. He started with one dealership and now has five, with a combined worth estimated at $150 million. Additionally, Marty owns the land where the dealerships are located, which is worth a combined $50 million. Outside the business, Marty has about $10 million in assets, including a $3 million home and a $3 million beach property enjoyed by the entire family. But most of his wealth — like the airplane available to all family members — is tied up in the business. Marty has three children. Alton and Betty grew up working at the dealerships and want to continue working in the family business. While they have quite different personalities, neither can run the business alone. The third child, Carl, is happy with his own career outside the business. Marty’s total estate is $210 million, or $70 million per child. He has three goals: expanding the dealerships under the family name, giving each child a fair share of the wealth, and doing so in a way that maintains family harmony. By Duncan Moseley, Managing Director, Business Transition Advisory Group, Truist Wealth 10 KENTUCKY AUTO DEALER
However, accomplishing these goals may become complicated. For example: • If Marty divides his estate by three, there aren’t enough personal assets for Carl to receive an equivalent value to that of his siblings without including some business interest. • If all three children receive a third of the business assets, the dealerships may suffer if they disagree on business goals. Moreover, Carl may resent salaries paid to his siblings, and they may resent him for taking a third of the profits when he doesn’t contribute. • If Alton and Betty can’t run the business together, there isn’t an even number of dealerships to divide between them, and the dealerships may lose value by not being part of a larger group. • The airplane and beach home may present a source of conflict if certain family members lose access to an asset they’ve enjoyed for years. And so, Marty is left with two crucial questions: “How do I treat each child fairly? And does the division have to be equal to be fair?” Eight Key Points for a Succession Strategy 1. Interview your children to determine the intent and desires of each. Do they want to work in the business? Can they succeed together? Can they manage the business as a whole? 2. Educate your children about what it means to be in business together. 3. Explain how assets are not equal. Why might a fair share not be an equal share? Why is $20 million in cash not equivalent to a dealership valued at $20 million? 4. Set clear expectations on what your children must do to maximize the benefits of your plan. 5. Involve your children in the business so you can mentor them, assess their capabilities, and examine their ability to work together. 6. Guide your children on managing their own personal financial lives and assess their ability to use the business’s assets responsibly. Developing a transition that supports both the needs of your business and your family ensures your hard work will provide for generations to come. WWW.KYADA.COM 11
7. Set a plan for children not involved in the business. If your children can work together but don’t all want to work in the business, consider including the other children as non-voting owners, communicating clearly what they might receive based on your projected growth strategy. 8. Consider alternative ways to pass value to children who aren’t working in the business. You’ll need a different approach for a child who doesn’t want to be involved with the business or whose involvement would disrupt the family dynamics or the business. Consider options like a life insurance policy, a dividend recapitalization to extract value, selling a business asset (including one or more of the dealerships), or prolonging a growth strategy for the business to keep that child’s inheritance on par with the other children. Discuss your approach with your children, showing your commitment to a fair — but not necessarily equal — distribution to a child who has chosen to pursue other opportunities outside the business. What Are the Keys to Creating a Successful Plan? • Time: Allow enough time to prepare the proper strategy. A succession plan is neither created nor accomplished overnight. • Education: Ensure you and your children have a thorough understanding of the options available within your business and outside of it so you can structure an appropriate plan. • Communication: Set clear expectations for your children, make sure they understand your approach and get their buy-in at every step of the process. • Flexibility: Make your plan flexible enough to accommodate changes in your business operations, family dynamics, and personal goals of your children. The Truist Business Transition Advisory Group has helped many dealership owners prepare and successfully transition their businesses, breaking through roadblocks with an integrated approach that leads to success and peace of mind for owners and their families. Developing a transition that supports both the needs of your business and your family ensures your hard work will provide for generations to come. Ready to prepare your dealership succession strategy? Ask your relationship manager about how the Truist Business Transition Advisory Group can help you and your family prepare to successfully transition your dealership. Go to truist.com for more information. MATH PROBLEMS AREN’T THE ONLY PROBLEMS WE SOLVE. LET US SOLVE YOURS. It’s impossible for a business owner to foresee every challenge a business will face or to know how to respond to every situation. At Bowden & Wood, we can offer you many standard solutions to your problem, or we can develop some more creative solutions when the standard answers won’t cut it. » Advisory » Strategic Planning » Buy/Sell Consulting » Retirement Planning » Audits and Reviews » Financial Statements » Taxes » Accounting and much more! (502) 583-0262 info@bowdenandwood.com bowdenandwood.com CALL OR EMAIL US TODAY. 12 KENTUCKY AUTO DEALER
DRIVE OUR INDUSTRY FORWARD BY CONTRIBUTING TO OUR KADET FUND As you have seen in this Legislative Session, there are constant threats to our franchise system and our business. Whether it’s industry changes, manufacturer demands, or economic influences, we face many challenges. In order to confront these together with a unified voice, we need your support and participation. Building and maintaining relationships with the legislators that represent you in each of your districts is how we are able to protect pro-business and pro-dealer rights. It is how we are able to ensure that our elected officials understand the needs and issues that we face in the dealership community. Which is why we ask that you consider donating to our KADET fund today. WE are the car dealers, and WE need to have a strong voice. Thank you to our 2023 President’s Club members: • Joe Cummins • Nancy Sparks • Tim Sparks • Kim Huffman • David Moore • Joe Cross • Vickie Fister • Dan Renshaw • Bill Cole • Dwain Taylor • Ray Cottrell, Jr. • Dann Hughes • Tim Kanaly • Rob Marshall • Trey Marshall • Mike Hyde • Jeff Eickholz For more information about contributing to KADET, contact Melissa Peach at mpeach@kyada.com. Please scan the QR code to donate today. https://kentuckyautodealerskyassoc.wliinc33.com/events/GIVE-TO-KADET-PAC-CAMPAIGN-42/register WWW.KYADA.COM 13
By now, many of us have seen a TikTok video filmed at someone’s workplace — a “day in the life” video, someone complaining about their coworkers, supervisors, or customers, or someone talking about an unrelated subject while at the office. And a relatively new platform, BeReal, goes a step further by encouraging users to provide an unfiltered view into their “real” everyday life at random moments throughout the day. Of course, such organic social media clips can be a valuable tool that helps market your brand and build stronger employee relationships — but where do you draw the line? These posts might include employees performing their duties during a meeting with co-workers or at a workstation, which raises privacy and confidentiality concerns. Moreover, employees flocking to social media to discuss their bosses and general work experiences — positive or negative — could lead to other troubles. When these videos go viral, employees may become unofficial spokespersons for OVER-SHARING IN THE WORKPLACE? Why Your Company May Need a TikTok and BeReal Policy By Fisher Phillips your organizations, influencing the conversation about work norms and creating trends that impact employers globally. With these changing dynamics, you may want to set new guidelines for social media use while ensuring your policies don’t run afoul of employment and labor laws. Here are four tips for updating your social media policies to reflect this modern era and stay on top of the latest developments: 1. Ensure Policies Reflect Recent Trends In the early days of widespread social media use, your policies may have simply prohibited employees from using company equipment to post non-work-related content online and required work posts to be business appropriate. But social media use is rapidly evolving in new ways that you may not have anticipated when your policies were first drafted. What should you know about current trends as you consider policy changes? For one thing, TikTok has quickly grown in popularity over the past two years with more than a billion monthly active users — which means your employees are likely using the platform and are probably doing so during work hours. The app allows users to upload videos from five seconds to 10 minutes. TikTok then filters videos through their feed using an algorithm and shares them with other users. These videos may receive millions of views, comments, likes, and shares. While TikTok is popular, it’s obviously not the only platform featuring employees on the job. Unlike TikTok — where users are hoping to go viral — the BeReal app takes a less sensational approach. BeReal doesn’t 14 KENTUCKY AUTO DEALER
have filters, hashtags, or even followers. To view someone’s BeReal, you have to request to be their friend. The app encourages users to provide an unfiltered view into their “real” everyday life. Each day at a different time, the app simultaneously notifies all users to “BeReal” and share a photo within two minutes, regardless of their location. The camera on the app will then take a photo of the user with the front-facing camera while also taking a photo on the back camera, creating a BeReal snapshot to share with friends. This app can be potentially problematic for employers. Many times, BeReal alerts occur during work hours, so users end up taking pictures of their workplace or work area. Because BeReal is shared among friends, the app may create a sense of safety, and users might forget to censor confidential information. Moreover, while BeReal doesn’t have the same “viral” nature as TikTok, that doesn’t stop users from sharing their posts beyond the app on other platforms. This trend illustrates that the new generation of workers values the transparency these apps provide, with many not considering that their candid photos may also reveal company information. 2. Strike a Balance Before you decide to curb all TikTok and BeReal posts from the workplace, you should recognize that such posts can pay dividends. Employees who are active on social media may be more equipped to understand the social pulse of the company’s customer base. Additionally, allowing employees to contribute to company-sponsored social media posts shows that the company trusts them, which can increase confidence and make employees feel valued. Furthermore, social media networking may help employees collaborate, share ideas, and solve problems. This can lead to better employee engagement and retention. Moreover, utilizing social media in the workplace can make the company more desirable to potential applicants, particularly Gen Z and millennial job seekers. Social media is here to stay, and employers should recognize that policies barring all forms of social media use in the workplace may be unrealistic. In fact, about 72% of respondents to a 2021 Pew Research Center survey said they use some form of social media and 77% of respondents to an earlier survey reported using social media regardless of whether their employer had a policy in place. While not every company can allow on-the-job posts, those with flexibility might want to dedicate resources to creating a mutually beneficial, collaborative policy around social media use in the workplace. For example, allowing employees to share their experiences with your company through social media may promote transparency and provide job seekers with credible information on what it’s really like to work for your business. 3. Address the Potential Pitfalls While employers may benefit from employees’ on-the-job social media posts, you should address potential dangers, including legal and business concerns. Of the many legal concerns, the most glaring are privacy protections and confidentiality. As employees capture authentic moments during the workday for BeReal or post TikTok “day in the life” videos, they frequently walk around the workplace, recording offices, conference rooms, common spaces, the cafeteria, and more. The videos may inadvertently capture confidential information, such as audio of an internal meeting, the image of a client’s name, or a trade secret. Confidentiality issues also arise with employees who work remotely. For example, employees may take a video of their innovative athome workspace while a Zoom meeting is in progress or while their computer screen displays proprietary information. You should also be cognizant of how allowing employees to post on the job can potentially harm your organization’s reputation. TikTok and BeReal attract users who want to be authentic rather than staged, heavily filtered, or otherwise unauthentic. Thus, employees who choose to post on these platforms do not shy away from capturing the “realness” of their job. This, in turn, can lead to your employees sharing information that negatively affects the company, such as human resources concerns (including allegations of unprofessional comments made by colleagues), complaints about working conditions, and products liability issues. All of these discussions raise reputational and legal concerns that you should consider. While employers may benefit from employees’ on-the-job social media posts, you should address potential dangers, including legal and business concerns. WWW.KYADA.COM 15
4. Set Realistic Parameters With these benefits, risks, and (pop) cultural considerations in mind, what should your modern social media policy include? If you already have a solid employee handbook, a good place to start is by reminding employees that your existing policies still apply when using social media platforms. For example, an equal employment and harassment-prevention policy would cover discriminatory or bullying behavior towards colleagues whether online or in person. You should remind employees whom they should contact when they have a workplace concern. Additionally, let employees know that confidentiality policies apply when sharing content, so their computer screens and documents should not be visible in the background. However, depending on the nature of your business and your employees’ roles, you may want to create a more targeted policy on social media use. For instance, you may have different risks to manage if you encourage employees to engage with your brand, employ a younger workforce, or otherwise have a strong social media presence. As you likely know, your policy should be in writing and followed consistently. Where to go from there is more complicated. The explosion in social media use has only highlighted how regulating employee speech is difficult, nuanced, and occasionally backfires. But, of course, there are still some best practices: • Develop policies in collaboration with legal counsel, HR, technology, communications, and diversity, equity, and inclusion (DEI) teams. Be sure the policy matches the company’s voice and recognize that this is not a one-template-fits-all exercise. • Use plain language and examples. “Do not share client information, even if their name is covered” is more helpful than “Posting client information will subject employees to discipline up to and including termination.”* • Keep up with guidance from the National Labor Relations Board (NLRB) — which is subject to change. Note that blanket bans on discussing wages or complaining about supervisors or working conditions are not permissible under federal labor law. The Trump administration issued an employer-friendly rule to evaluate whether a policy interferes with employees’ rights to organize and engage in protected concerted activity. However, that ruling is potentially on the chopping block in a pending NLRB case. If the NLRB reverts to the prior, more restrictive evaluation, policies currently compliant could suddenly run afoul of the National Labor Relations Act (even in nonunionized work settings). This includes seemingly benign provisions about “respectful” content and limits on who is authorized to speak to the media. • Confirm applicable state laws. There is a legislative trend to prohibit employers from requiring employees to engage with social media as a condition of employment or even to ask for their social media usernames as part of a job application. • Develop a plan for consistently responding to policy violations. Two employees violating the same rule, in the same way, should not be treated differently based on whether they tripped the algorithm and went viral. Relatedly, consider the reputational risk of a too-harsh response — someone fired for social media content may likely use the same platforms to discuss their termination. Conclusion If you have questions regarding your social media policy, contact your Fisher Phillips attorney, the authors of this Insight, or any attorney on our Data Security and Workplace Privacy Team. We will continue to monitor developments in this area, so ensure you are subscribed to Fisher Phillips’ Insight System to get the most up-to-date information. The authors wish to thank Law Clerks Taric Mansour and Jazmin Luna for their work co-authoring this Insight. * This section has been edited to reflect the automotive industry. To see the original post, please visit: https://www.fisherphillips.com/news-insights/ over-sharing-iworkplace-company-may-need-tiktok-bereal-policy.html. 16 KENTUCKY AUTO DEALER
Plan ahead for your dealership’s long-term legacy Setting up a succession plan is an important consideration for the future of your dealership. Now’s the time to think about your priorities, such as maintaining control, taxes, liquidity, employees and family. What would you like the power to do?® Learn more with our comprehensive overview of Dealer Financial Services Succession Planning at business.bofa.com/dealer. “Bank of America” and “BofA Securities” are the marketing names used by the Global Banking and Global Markets divisions of Bank of America Corporation. Lending, other commercial banking activities, and trading in certain financial instruments are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., Member FDIC. Trading in securities and financial instruments, and strategic advisory, and other investment banking activities, are performed globally by investment banking affiliates of Bank of America Corporation (“Investment Banking Affiliates”), including, in the United States, BofA Securities, Inc. and Merrill Lynch Professional Clearing Corp., both of which are registered broker-dealers and Members of SIPC, and, in other jurisdictions, by locally registered entities. BofA Securities, Inc. and Merrill Lynch Professional Clearing Corp. are registered as futures commission merchants with the CFTC and are members of the NFA. Investment products offered by Investment Banking Affiliates: | Are Not FDIC Insured | Are Not Bank Guaranteed| May Lose Value | ©2022 Bank of America Corporation. All rights reserved. 4882341 05-22-0512
HOW AUTOMOTIVE DIGITAL RETAILING CAN AFFECT YOUR DEALERSHIP Digital retailing makes it easier and more exciting for customers to shop for cars. The physical and digital processes of buying a car are merged into one seamless experience for the customer, creating more engagement and more sales with the dealership. What is Automotive Digital Retailing? In the early 2000s, customers would visit, on average, five dealerships before purchasing a vehicle. Today, customers may visit two dealerships before making a decision. They know what they want to buy, and they know exactly where to go to get it. With this new age of consumers searching online for the car they want, dealerships need to change how they approach vehicle sales. Digital retailing is different from digital marketing. It’s more than just viewing an online inventory or marketing the dealership on social media. With digital retailing, customers can dive deeper into the car-buying process from the comfort of their homes. They want to buy a car the same way they buy every other product online: with an easy and streamlined checkout process and without pushy sales tactics or overly-complicated forms. They want to pick out exactly what they want and show up to your dealership ready for the keys. Even though it may feel like dealerships are losing influence and control in the car-buying process, it doesn’t have to be a bad thing. Omnichannel Digital Retailing Omnichannel is defined, in terms of business strategy, as a way to provide a seamless shopping experience from your phone to the store. There is no one right way to implement omnichannel because it depends 18 KENTUCKY AUTO DEALER
on the needs of the business and the customer. No matter how the customer wants to shop, they should remain interested and engaged across all shopping avenues. Using omnichannel, your dealership can control how the customer interacts with your brand and inventory. You can guide customers to the general inventory, or you can be more specific and push them towards a specific model of car you are trying to sell. Customers then will have control over where they go to complete the process, but your dealership pushed them in the right direction. This way, customers create their own experience while digging deeper into the buying process. You are able to reach your customers directly without an email or phone call while the customer makes their own decisions. The Two Types of Customers Digital retailing gives customers the opportunity to shop exactly how they want, and there is on of two ways they usually do. The first type of customer rushes through the whole process, wanting to make up their mind quickly. They want to offload their trade-in, secure financing, and complete the sale within a matter of hours from any device. They don’t want to be upsold and want to finish the process as quickly as they would at any other online retailer. They will only need to show up to the dealership to sign the final papers and grab the keys to their new vehicle, making the interactions in the dealership quick and minimal. They know what they want and don’t need to contemplate their decision. The second type of customer needs time to think everything through. They need to sell themselves on the idea of buying the car before they make any big decisions, contemplating all the possible options and making sure they are getting exactly what they want. They may want to discuss their options or ask questions about the specific qualities on the cars they are analyzing. They don’t want to feel rushed for fear they will end up regretting their choice after the sale is already complete. No matter which type of customer you get, both eventually end up at your dealership. An omnichannel provides flexibility for both types of customers to shop how they want. Whether the customer wants to race to the end of the buying process online or wants to do thorough research on various vehicles without hours of repeated conversations with a salesperson, an omnichannel solution is the way to go. A fluid omnichannel digital retailing experience allows the customer to go between your website and your dealership without losing their place or being forced to provide the same information multiple times. Customers like transparency and control, and when they have both, the chances of a sale improve exponentially. Implementing Omnichannel Digital Strategies There are multiple ways to implement omnichannel, but it can be difficult to know where to start. One of the most important aspects is simply knowing what the customer wants as part of their online shopping experience. Your dealership must create the strong online presence over multiple platforms that the customer is used to from other industries. Another important aspect is ensuring the customer has a seamless transition between digital and physical channels. AI features such as virtual assistants and virtual test drives boost the customer’s experience while also collecting data. This data could be about the customer’s vehicle preferences, what specific features they’re looking for, what features they are avoiding, and more. You can then save that data and use it for the customer’s in-person experience in the dealership as well. This will assist in reducing the number of repeated conversations between the customer and salesperson and avoiding asking for information that could have already been collected earlier. With smoother transitions and faster sales, the customer will walk out of your dealership feeling satisfied with their purchase. Plus, the new technology will make the process quicker and shorten the length of time it takes to process a sale, closing the gap between the fastpaced online markets and traditional in-person stores. Plus, customers will always be happy to no longer sit in a dealership for four or more hours. Even after the sale is complete, there are still opportunities to connect with the customer using omnichannel. The data collected from the online channels can be used to create personalized interactions and establish a long-term relationship with the customer. AI assistants can help remind customers about regular check-ups for the car and increase engagement with addon services. The customer won’t feel like they are part of a mass email to every customer that has ever shopped at your dealership, and instead, they will feel like they have a more personal connection with your dealership, building rapport and brand loyalty. In Closing Like everything else, the automotive industry needs to embrace the transition to the digital world. It may be difficult to begin, but a strong digital retailing experience will smoothly integrate your dealership with an online presence. It opens the door to new ways to leverage customer data, build trust with the customer, generate leads, and increase the dealership’s closing ratio. You could be closing more deals without using any extra manpower. It may be a challenge, but making this extra effort will pay off for you and your customers. WWW.KYADA.COM 19
Over the past year, and largely fueled by the pandemic, the term “Great Resignation” has become all too familiar with employers as well as the headache of employee turnover. According to the U.S. Bureau of Labor Statistics, approximately 38.6 million resignations occurred between January and September 2022, and the number of employees quitting has remained fairly steady month over month. Today, a fair number of employers are experiencing the adverse impacts of workforce turnover. In terms of financial loss, the cost of replacing an employee can range from one-half to two times the employee’s annual salary, depending on their role. Additionally, declining productivity, a lack of engagement and low morale are present as remaining associates must often pick up the slack from departing team members. This can lead to even more employees quitting. One might ask the question: Is there an end in sight to the revolving door of employee turnover? THE GREAT RETENTION Tips to Retain Your Employees In 2023 It is essential for employers to dig deeper into this problem to understand what is happening and to start the process of turning the Great Resignation into the Great Retention this year. In a recent survey by iHire, 2,665 U.S. workers named the top five reasons employees left jobs in the past 12 months: 1. Unhappy with their manager/supervisor (43.7%) 2. Unsatisfactory pay/salary (43.4%) 3. Poor work/life balance (35.4%) 4. Lack of recognition/appreciation (29.7%) 5. Few growth/advancement opportunities (28.3%) It is not a surprise that “unsatisfactory pay” was on the list at number two. Having a competitive compensation strategy is crucial to retention, especially in the economic climate we have today. However, it’s important to note that the other four reasons listed for turnover revolve around the employer needing to put its people first and improving the company culture. Benefits like health insurance, profit sharing and paid time off have become fundamental expectations in the wake of the pandemic. Not to underestimate their value because they are important, but benefits are not driving employee retention. To open the door to the Great Retention, company culture must be addressed. 20 KENTUCKY AUTO DEALER
Creating a Positive Work Environment. Getting your managers on board is the first step to creating a positive work environment. Difficulties with management was the top reason employees left a job this past year. Setting standards for transparency in communication can strengthen the employee/manager relationship. This can be accomplished by holding frequent meetings, actively listening, and maintaining an open-door policy. You may need to offer additional training to ensure managers are approachable and helpful. Other ways you can enhance your work environment and improve the employee experience is to expand your diversity and inclusion efforts, institute a regular recognition program to celebrate your employees and, if possible, expand options for how work gets done (e.g., remote, hybrid, flex time, job sharing, etc.). Employee Well-Being Poor mental health due to work-related issues is on the rise. According to a recent study by Corporate Wellness Magazine, 31% of workers experienced a decline in their mental health over the past year. That is up 24% from the end of 2020. You can start addressing your employees’ well-being by offering subscriptions to meditation apps, mental health benefits like an Employee Assistance Program (EAP), online counseling, and mental health PTO. It is also a good idea to make sure that your company’s health insurance covers mental health services. Being flexible with your employees can help prevent burnout and improve mental health while assisting them in establishing a good work/life balance. Don’t forget about the financial side of well-being — giving employees access to a lifestyle savings account or stipends for home office equipment, student loans, travel to and from the office expenses, and more can up the ante. Career Growth Today’s workforce wants the ability to plan for their future and know whether they can see themselves working with you long-term. Remaining status quo can lead to employee disengagement, a slow, quiet quitting, and eventually, can result in them walking out the door for good. Providing your employees with opportunities to enrich their skills and grow professionally pays off. Offering training and reimbursing associates for those expenses (coursework, advanced degrees and certifications) is a great way to invest in your employees. Encourage your managers to work with their teams and clearly define employee career goals. Then create a plan for how they can achieve them. Your company mission should be shared with employees and talked about from time to time. Employees should be familiar with it and understand its importance. Make sure it’s clear to your employees how their roles contribute to the success of the company moving forward. This can engage them and makes their work fulfilling and meaningful. When their work is fulfilling and meaningful, it can increase the likelihood of them staying and growing with your organization. Stay Interviews One more thing to think about is stay interviews. They are a highly effective retention tactic that is often overlooked. These interviews involve holding structured conversations — verbally or in writing — with your current employees to learn more about what concerns they might have and what they need to maintain job satisfaction. In other words, you need to learn what will make the employee want to stay and keep working for you. Some organizations make a mistake by assuming that, just because their employee shows up to work, they are happy. Be open to honest feedback, but don’t push too hard if an employee doesn’t want to elaborate on their comments. This practice should be done yearly and can help you take action and proactively address issues and devise a retention plan before it’s too late. As a bonus, stay interviews can contribute to building and fostering a culture of transparency and trust. Sample stay interview questions might include: • What aspects of your job do you enjoy the most? Why? • If nothing was off the table, what would you change about your job to make it more satisfying? • What would cause you to look for another job? • Can you tell me about a frustrating day at work you’ve had recently? A great one? Conclusion As workforce turnover continues, companies must work hard to overcome losing costly talent by creating a positive, inclusive and flexible work environment that supports employees’ well-being and career growth goals. And many of the retention efforts described above are doable for businesses of any size and come with no significant added cost. Now is the time to create a plan and implement retention strategies in your company. Take care of your employees, and you can make 2023 the year of the Great Retention. WWW.KYADA.COM 21
www.thenewslinkgroup.orgRkJQdWJsaXNoZXIy MTg3NDExNQ==