Compliance has been a “buzz word” in our industry for decades. Federal and state regulations that encompass the retail automotive world have been increasing, yet it’s still some of the decades old regulations that are getting businesses into trouble today. In order to establish a compliant work place, cultural change and understanding are required on everyone’s part. Everyone who works in a retail automotive environment is responsible for ensuring a professional and ethical environment. I know, it’s easier said than done, however, let’s explore why we are experiencing a need for more regulations from federal and state authorities. Today’s competitive market demands results and, sometimes, those demands lead to shortcuts. Here is where the compliance trouble incubates. While it’s true that competition demands bold and sometimes creative thinking, cutting corners is not the way to win.

The commitment to a compliant environment can be a great economic benefit while creating an ethical business culture. It can create a more productive and professional environment as a result of increased confidence in employees to combat the differences through understanding of regulations, not ignorance of them. Change will not be easy and can come with some costs. In order to be fully compliant and above reproach in the business and continue to be profitable, a price will have to be paid, and that price could result in old habits not going away so easily. There will be some employees who will not adhere to the change. There will be others who will do wrong until they get caught or until they fall behind forecast and feel the pressure to produce a sale. Neglecting safety in the service department or not documenting an injury in the parts department. Either way, permanent change will require real commitment from the top down and cooperation among all. Is it worth it? It can be; getting through the transition is well worth it for the integrity of the business’s future.

All cultural changes have to start from the top down. In order to implement a culture that understands the seriousness of compliance and adheres to the regulations, ownership and management need to lead. Holding their employees accountable to ensure the owners’ request for a compliant business must be understood and followed. It’s not an adherent practice at the beginning of the month and a compromised practice at the end of the month. It’s an everyday, all the time practice that creates a culture. In order to establish an everyday mentality and create new and consistent practices, many dealers are hiring or appointing “Compliance Administrators” to implement change. It requires an investment because they are full-time and that’s all they do. Their job responsibilities require much more than just the sales and finance departments. The job requires knowledge of compliance issues relating to service, sales, financing, and privacy, to name just a few.

If we begin to really educate the personnel who work in the dealership environment, to create a true professionalism for our customers, then we can reap the reward for doing things right. Most consumers don’t trust the retail environment. You need not go any further than the internet to see what advice is given to consumers who are embarking on the automobile purchase mission. The consumer receives advice to set up financing away from the dealer, to negotiate the trade separate from the purchase, and not to purchase any of the products offered in the finance office. Why is that advice necessary? Why does the consumer feel the need to gather information from the Internet? Past practices are not indicative of future activity, but past practices are embedded in the consumer world and that flat-out scares people. How do we convince the consumer that your environment is a safe and ethical place to do business? It takes time to change cultures, but because it takes time and work, it does yield a steady flow of customers and, ultimately, profit.

A full time compliance administrator enables the environment to become more aware, and awareness brings legitimate accountability. Wouldn’t it make great sense to teach and prepare today’s automotive professionals to be the best they can be? To represent the business the best they can? If people don’t know, or just don’t understand, we can’t expect them to behave in the manner we expect. If management exercises override or pushes compliance aside for the sake of a deal, then all the work and the message for ethics is lost. Senior management needs to be proactive and consistent in their message. Having a clear and written compliance policy and procedure enables everyone to have knowledge in the business they practice every day.

Each retail automotive business reflects the personality of the owner. As stated, cultures are built from the top down and the message should be clear to all: the right way or no way. A good reminder is “never does one deal make a career.” A compliance administrator allows education and process to work together to ensure the clear understanding of employees.

The compliance administrator is not only responsible for the retail and administrative regulatory education, but also is the resident expert in the area of OSHA, MSDS, EPA, hazardous material waste, as well as any additional state and local regulations encompassing the service department. The compliance administrator can and will ensure reporting to government agencies and insurance carriers. Their existence can save a business hundreds of thousands of dollars from uninformed or uneducated employee practices that can cause trouble.

How else can a compliance administrator help keep the business out of trouble? Some of the simplest FTC regulations are a good place to start on the sales floor and in the finance office. What can a sales person say? How can they say it and when and how should they say it? These are the challenges facing the sales team every day. Preaching without teaching will lead to the same result over and over. Compliance is an everyday thing and needs to be practiced everyday until it becomes a culture that employees have confidence in and appreciate. Employee understanding of compliance and regulations make for a more confident and credible professional. We can remind and we can reprimand for infractions of compliance, but until everyone in the business understands and agrees to follow the rules and regulations that govern the retail automotive business, this will continue to present challenges to the business. An appointed compliance administrator in the business gives the best chance to change the culture with a clear understanding that profit does not suffer, but credibility is enhanced, thus adding to the profitability of the business.