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Employee Retention: Why Are We Going Backwards?

A recent article in Automotive News reports that the three-year employee retention rate at dealerships reached a new low, dropping by 2%.
In fact, the study showed that only 1/3 of sales consultants stay at a dealership for 3 years or longer. The article went on to share that the average tenure for sales consultants has steadily dropped since 2011, when it was about 3.8 years. Last year? 2.4 years. According to the article the result is:

“…reduced productivity, reduced median and average earnings, and reduced dealership profitability.”

What’s the answer to retaining employees?
Perhaps we should start looking outside of our industry, analyzing companies that people love to work for and figuring out which of those attributes we can adopt in dealerships.

Consider starting by simply asking employees if they’re happy or not, what could be changed that would make the dealership a better place to work, etc. However, be sure to do this anonymously, or you probably won’t get honest answers. Then sit back and be prepared because some of the answers you get may sting. You can’t, however, make changes without knowing what’s wrong and unhappy employees generally aren’t going to tell you to your face.


Our workforce is getting younger.
These days, many aren’t willing to work under the taxing conditions that we experienced. And it’s usually not because they’re lazy, or have a poor work ethic. It’s because our society and culture has changed. People prioritize things differently. And this trend isn’t going away. It’s only going to keep shifting


If we continue to try and operate dealerships the same way as 10 years ago – mandating “bells” and 70+ hour work weeks – we’re going to keep watching the front door revolving – existing employees leaving and new faces coming in. And if you don’t think your customers notice, you’d be sadly mistaken.

Making employee retention a priority can, by itself, improve customer experience and loyalty.
In addition, you will save money that would otherwise have been spent hiring and training new staff. Isn’t the whole point of retention and loyalty to increase revenue? Well those two words apply just as much to your employees as they do to your customers. Never forget that.

Views: 265

Tags: automotive, company, culture, customer, dealership, employee, loyalty, retention, satisfaction


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Comment by Mike Gorun on October 14, 2016 at 10:56am

First, thanks for the comments. Second, as Jeff pointed out, oftentimes dealerships operate much like an assembly line focusing only on customers and moving them along towards the sale thinking that a salesperson receiving a commission voucher is enough to let them know they did a good job but, in fact, recognition is sometimes a bigger motivator than money. Letting employees know that they are appreciated and making an effort to really know them on a personal level can actually increase retention as you cease to become a place that they go to to bring home a paycheck and become a place that they are invested in - which will not only create a better customer experience but will keep your employees around longer. Thanks again for the comment!

Comment by Ralph Paglia on October 7, 2016 at 9:15am

Jeff's comment makers several valid points... All of which should be motivation to do better than we have in the past. As Mike Gorun points out, simply continuing to do what we have done in the past is no longer viable.

Comment by Jeff Stolzenburg on October 7, 2016 at 7:38am

From my view.....I spent my entire life in the motorcycle industry...always interested in the auto industry though.  I made a move when I was 45 years old and spent two years selling Toyotas.  Great product, great dealership, great employees, but it showed me first hand about the "Corporate World".  Everyone at the dealership was just a number.  The last paragraph of this article hits it right on...."Retention & Loyalty apply to employees as well as customers".  I managed a Harley-Davidson Dealership with 58 empolyees until October of 2009.  Every employee had to be "factory trained" including the girls selling leather jackets, the service writer, and the front door greeter, everyone!  Corporate would keep track of each employee and their training status.  If we lost a fully trained employee (whether they quit or were fired) we had to replace that person immediately with someone equally trained.  It doesn't appear that way in the Auto world.  And I can say employees were an after thought with this Corporate owned Toyota Dealership.  It was all about numbers, that's it.  When the owner of the Auto Group came to visit  the dealership, he never recognized any employee including a 23 year employee who was still working.  Bottom line is....I learned a lot in only 2 years working in the auto industry and Employee Retention is years behind most other industries.

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