NADA Study Reveals 71 Percent Turnover For Dealership Sales Positions

NADA has released their 2015 Dealership Workforce Study. The report provides national and regional trends in compensation, benefits and employee retention.

The stated goal of the 2015 NADA Dealership Workforce Study is to “assist its dealer members in being as efficient as possible in the operation of their dealerships.” This in-depth report provides a wealth of information within its 140 pages. Perhaps the most staggering finding is employee turnover rate in retail automotive.

You may have had issues finding, and keeping the right employees for your store. According to this study, and as you may have imagined, you aren’t alone.

Data from Page 20 of the NADA report showed National Retention and Turnover for all types of dealerships.

Highlights of the turnover data include:

The annualized turnover rate for all dealership positions is 39.4 percent. That figures is a 3 percent increase year-over-year. One-year retention for all positions hit 71 percent and three-year retention came in a 47 percent.

Sales consultant annualized turnover is 71.9 percent, which is a YOY increase of 5.6 percent. The sales role also had a one-year retention rate of 60 percent and three-year retention rate of 32.8 percent.

NADA chief economist Steven Szakaly spoke about the turnover for sales people in retail automotive in a press release. In a statement, Szakaly explained, “The high turnover rate of sales consultants can be attributed to two factors. First, this represents many entry-level workers who decided to try sales but then realized they did not like it. Second, automotive retailing is going through major industry changes, which is putting pressure on sales staff earnings.”

Switching gears back to turnover on the finance side of retail auto, the annualized turnover for F&I Managers is second only to sales consultant in YOY increase at 5.0 percent The F&I Manager annual turn rate is now 36.7 percent

Also on the service side, Service adviser/Writers saw an annual turn rate of 41.0 percent, an increase of 4.5 percent YOY, while the annualized turnover rate for service technicians came in at 24.1 percent, up only 1.2 percent YOY.

On the management side of the business, the annualized turnover for sales managers went down 0.2 percent to 26.3 percent. Sales Managers showed a one-year retention of 81 percent and three-year retention of 57.8 percent.

General manager or dealership operators saw an annualized turnover rate of 15.9 percent, up only 1.1 percent YOY, while this position boasts a one-year retention of 93.2 percent and three-year retention rate of 80.6 percent.

There are many moving parts when it comes to employee turnover in car dealerships including compensation, benefits and the amount of investment made in employees through position and career training programs. With the data from the NADA report, it’s important to consider employee turnover for all positions in retail auto went up around 3 percent from 36 to 39 percent, however 39 percent is still 5 percentage points shy of the BLS-estimated 44 percent turnover rate for the entire private sector.

Szakaly also added his thoughts on franchise dealership job opportunities as a whole saying, “Jobs at new-car dealerships have continued to outpace average U.S. wages, and are some of the best-paying jobs available. This highlights the importance of the retail-auto industry to U.S. job growth, and how critical new-car dealerships have become in their communities across the country in providing high-paying, stable employment opportunities following the recession.”

This report, that NADA is selling through their customer service department, provides some eye-opening numbers each dealer needs to be aware of. If people are dealerships’ most important asset, what’s the best approach to tackle this issue? What do you think are the primary drivers behind high turnover rates? For more information about this data see the full NADA study.