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Younger generations could be answer to dealership turnover issues

July 26, 2019
As employee turnover across the U.S. reaches new heights and competition for talent redefines the workforce, dealerships find themselves at the epicenter of the struggle to attract and retain skilled workers. But Cox Automotive’s 2019 Dealership Staffing Study reveals an optimistic forecast with younger generation showing a greater interest in dealership jobs than older generations.
According to the latest study, about 20 percent of all dealership staff are likely to look for another job in the next six months, with one-third of non-management employees feeling neutral or unsatisfied with their jobs. The figures indicate high-risk potential for dealerships to lose a portion of their sales staff, which has an estimated 80 percent turnover rate, yet remains the group most likely to influence car buyer satisfaction, according to the Cox Automotive 2019 Car Buyer Journey Study.
"The good news is that dealerships have an opportunity to reverse this trend," said Isabelle Helms, vice president, research and market intelligence, Cox Automotive. "A new generation is entering the workforce and bringing with them a renewed interest in working at a dealership. To attract and retain employees in this highly competitive job market, dealerships should understand which benefits and cultural attributes employees value most and take action to effect positive changes within their store."
Among Gen Z and Young Millennials, more than 30 percent are interested in working for a dealership, even higher when roles other than sales are presented to them, according to the study. This interest is nearly 10 percentage points higher than interest shown by Older Millennials and Gen X.
With about 61 million members of Gen Z starting to enter the U.S. workforce, dealerships have a chance to build a culture that attracts and retains this younger, tech-savvy talent. However, to win over this next generation, dealerships must address significant gaps in today’s auto retail workplace culture, according to the staffing study.
 
• Dealership employee engagement is fading with one-third of dealership staff employees saying that they are not engaged nor excited about their jobs.
 
• Only half of non-management employees say their manager meets with them regularly to set goals that stretch their capabilities and grow their skills.
 
• The absence of work/life balance can lead to staff turnover with 40 percent of former dealership staff saying they left due to a work/life balance-related issue.
 
• A mere 39 percent of dealership staff believe their dealership is using the latest technology.
 
"Dealers can’t afford to take their eyes off their employees’ needs," said Bob Kostkan, senior director with Cox Automotive University. "With record high dealership turnover and a low unemployment rate of 3.7 percent as of June 2019, it’s critical that dealership leaders improve productivity while also enhancing employee engagement and retention. These are controllable issues that must be addressed to maximize customer experience and profitability."
 
Dealerships need to act now to create a culture that makes employees feel valued and shows them they have future growth opportunities. While participating in the Cox Automotive SHIFT/Reinvent Program in 2015, John Cragg, executive vice president for the Penske Automotive Group’s East Region and responsible for dozens of rooftops and thousands of employees, became aware of a blind spot — he was "delegating" when he should have been "empowering." As a result of this new awareness, he worked strategically with his HR and marketing teams to shift the focus to be more about empowering people and giving them opportunities to contribute in more significant ways.
 
Cragg has since seen consistent year-over-year improvement in employee turnover and satisfaction. His region now has the highest employee satisfaction scores in the company and the lowest turnover — outpacing industry averages, even for the highest performers.
 
In addition to empowering and engaging staff, dealerships should also invest in modern, user-friendly technology to help drive greater productivity and efficiency for employees. Having access to the latest technology is not only expected by these younger generations but required to succeed as a business in today’s digital age. To get the most out of technology, dealerships must also implement ongoing training opportunities. Equipping employees with the necessary tools to help them grow their skillsets and better take advantage of new technology will create happier workers and a more optimized workflow.
 
 

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