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Dealership employees paid more, but retention remains an issue

June 6, 2014
New-vehicle dealership employees, on average, earn 27 percent more than the average weekly earnings of all U.S. private sector employees, according to submissions to the National Automobile Dealers Association’s 2013 Dealership Workplace Study.
 
Results of the NADA’s second annual workforce study were released last November, but the organization recently revisited the report and examined a few more key findings — including an interesting tidbit on pay scales.
 
Participation in the 2014 NADA study is extended until June 30. To participate, go to www.nadaworkforcestudy.com.   
 
The 2013 report is based on 2012 hard data culled from 290,000 car and truck payroll records, and includes both national and regional data. More than 2,240 dealerships participated in the 2013 Dealership Workforce Study.
 
Among the 2013 report’s findings:
 
• Perhaps not surprisingly, compensation in luxury dealerships tends to be higher than compensation in non-luxury dealerships.
• F&I managers had the highest income growth in 2012, at 8.4 percent, followed by service managers at 8 percent and sales consultants at 7.8 percent.
• Overall, the median salary in dealerships rose by almost 4 percent in 2012.
 
Dealerships also are shifting a bit when it comes to who they are hiring. According to the study results, many dealerships are looking to the younger generation when ramping up their teams. Dealers hired members of Generation Y 41 percent of the time in 2012.
The NADA cautioned that, to keep younger employees, "We need to address dealership culture, work house, salary and incentive programs, as the turnover rate in 2012 for this age group was 54 percent."
Dealerships also are increasing their female employee numbers, as dealerships hired women 19 percent of the time in 2012, up 2 percent from the previous year.
However, the NADA report noted again that the industry might need to work on dealership culture, as the turnover rate for female sales consultants is at 76 percent.
The overall turnover rate for dealership employees is 35 percent, which is less than that of other U.S. private sectors of 41 percent. That said, turnover is still an issue, the NADA pointed out, stressing that high rates might be due in part to long hours.
"The total number of hours and weekends that employees are scheduled to work has a significant impact on retention," the report concluded.
Sales consultants who work 50 to 60 hours a week earn 4 percent more a year than their counterparts working 40 to 45 hours. But there’s a caveat.
When employees work more than 45 hours, turnover increases and retention decreases, implying a change to the incentive system may be due.
The NADA report also noted specific challenges dealerships can make on the recruiting front. Those include creating staffing models that reduce total hours dealership employees are required to work; shifting the focus from individual-based sales incentives to team-based awards; and taking steps to draw more women into dealership positions. 
 
 

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