Sonic Automotive, a major U.S. retailer with over 150 car dealerships, recognized it had a tremendous problem a decade ago. The traditional car-buying experience was fraught with pain points for consumers, negatively impacting sales. 

The organization decided to tackle the problem head-on and ran a customer focus group to understand what part of the sales process needed to be changed. Their findings were clear: the company couldn’t keep hiring the same type of sales reps they’d always targeted.

“We knew we couldn’t hire the same type of people we'd been hiring,” Douglas Bryant, the vice president of talent management, training, and recruiting at Sonic Automotive, said.

Bryant went on to describe how Sonic Automotive revolutionized its hiring practices during a From Day One webinar titled “The Keys to Building Future-Ready Leadership: From Potential to Power,” moderated by Rebecca Knight, a contributing columnist at Harvard Business Review. He was joined by Dan Miller, a solutions architect at talent intelligence firm SHL, which Sonic partnered with to transform its sales staff. 

The findings of Sonic Automotive’s focus group led to the launch of Echo Park, a used-vehicle retail chain built on a new customer-centric model. It also revolutionized how the organization recruited talent, moving away from gut feelings to a science-based approach that yielded highly profitable results. 

The Counterintuitive Path to Success

Sonic Automotive’s initial assumptions about what characteristics defined a successful salesperson were upended. Standard practice in the industry at the time was to hire based on demographic factors and previous experience, with the hiring manager’s intuition guiding the process. The company collaborated with SHL to conduct studies that defined what a “good” salesperson really looked like. They analyzed various factors like military experience, previous sales history, and college degrees. The result was startling. 

“Our hiring managers liked hiring through gut instinct. They think they know what good talent looks like,” Bryant said. “The silver bullet was the SHL assessment. That was the only thing that loaded and correlated to success.”

The surprises kept coming. When Sonic Automotive opened a call center to handle customer appointments, the assumption was that new hires should come from sales backgrounds. However, the data showed reps with sales backgrounds performed worse. “We found out there was an inverse correlation between those sales abilities and the number of appointments set,” Bryant added. “We were totally hiring the wrong folks.” Instead, multitasking and customer service skills were the true predictors of success.

The Tangible Results of a Skills-Based Approach

The impact of Sonic Automotive's move to a psychometric assessment-based hiring system was tremendous. By setting the cutoff score at the 30th percentile, Sonic’s small recruiting team was able to manage over 100,000 applications a year and present hiring managers with only the top two or three candidates. 

The benefits of embracing a data-driven approach were undeniable. One initial study revealed that salespeople who were in the top 70% on the assessment sold an average of five cars per month. “That may not sound like a lot, but if you extrapolate that out across 150 stores, it was $100 million net to the bottom line,” Bryant said.

The benefits of the new hiring system also extended to employee engagement and retention, giving Sonic a significant advantage in an industry where turnover rates are usually around 60%. Sonic’s turnover rate plunged to as low as 20%, while employee engagement and customer service metrics are now at all-time highs across its divisions. 

Identifying the Skills That Actually Matter

The key to Sonic Automotive identifying the type of salespeople its customers actually wanted was focusing on enduring behavioral skills, rather than gut feelings. SHL measures 96 different behavioral skills in its assessments, which are grouped into 20 core competencies and 8 major categories.

“When we think about the skills that we want to focus on in predicting long-term success, it tends to be best to focus on those skills that are more durable, such as things like collaboration or adaptability or critical thinking,” Miller said. These are more predictive than resume-based factors or self-reported skill levels.

For example, a broad personality trait like extroversion is broken down into more specific categories like networking or presentation skills. “When we’re thinking about fit to a particular role, we tend to focus on those skills,” Miller added. “When we’re thinking about something like broad future potential, that’s when we focus more on those broad personality traits.”

One of the most sought-after skills hiring managers look for today is learning agility, the capacity to learn from experience and apply those lessons to new situations. SHL developed a “re-skilling potential assessment” to measure this trait. “It’s designed to capture how quickly someone can learn and grow and improve in those areas,” Miller said. It helps identify individuals who can rapidly adapt and close skill gaps.

Overhauling Culture and Overcoming Resistance

Sonic Automotive’s transition to a new hiring system came with its share of challenges. The company had to overhaul its entire sales culture to reinforce the collaborative skills its assessments identified. 

“In a traditional car dealership, the salespeople are really pitted against each other,” Bryant said. The company changed pay plans, reporting structures, and incentives to reward teamwork over individual cut-throat competition.

Convincing skeptical managers that it was time to change the hiring process required a data-driven approach. Sonic Automotive allowed for exceptions but tracked them meticulously. “I kept track of these exceptions, and then I’d watch our term list,” Bryant said. He would follow up with managers whenever they had to fire one of their “exception” hires, and the results spoke for themselves over time. Bryant says these managers will not hire anyone without an assessment score. 

The data-driven approach also helped eliminate personal bias from the hiring process, leading to a more diverse workforce. Bryant notes that recent engagement surveys show that female employees now score higher than their male counterparts, a reversal from past years. 

The Future: AI, Mobility, and Enduring Skills

Miller and Bryant both addressed the impact of artificial intelligence on the hiring process and skills sought. SHL is incorporating AI into its platforms and conducting research to identify who can use it best, says Miller. The study includes assessing both the technical and behavioral skills needed to leverage AI effectively. 

“The leaders of tomorrow are not going to be managing a solely human workforce,” Knight said. Miller agreed, emphasizing the need for skills that complement AI.

The next step for Sonic Automotive is using these assessments for internal talent development and mobility. “We're starting to view the assessments and the data, using [them] more and more for development after you join Sonic,” Bryant said. 

SHL’s talent mobility platform allows employees to explore roles within the organization that might be a good fit, providing them with autonomy over their career paths and boosting retention.

Bryant’s advice for organizations hesitant to embrace a skill-based approach to hiring is to lean on the data. Sonic Automotive’s decade-long transformation shows us that challenging long-held assumptions with concrete data creates a more efficient workforce that’s more engaged, more diverse, and more prepared for the future. 

Editor’s note: From Day One thanks our partner, SHL, for sponsoring this webinar.

Ade Akin covers workplace wellness, HR trends, and digital health solutions.

(Photo by RealPeopleGroup/iStock)