Car Dealerships, Especially Luxury Brands, Struggle To Retain Employees

Thu, Sep 29, 2016 2,001

The car-buying process has evolved in recent years, and it’s now rare for a buyer to shop for a car without first doing hours of research online.

Once a customer finally heads into the dealership, however, the salespeople they encounter might not be as seasoned as the workforce once was. Since 2011, there has been a steady decline in employee retention rate, according to a recent study, a trend that troubles those in the industry.

The median stint for dealership employees in 2015 was 2.4 years, the National Automobile Dealers Association found as a result of its 2016 Dealership Workforce Study. When the NADA first began conducting the study in 2011, the median tenure was 3.8 years.

The NADA’s study, which collects data from roughly 2,000 dealerships, reported only 45 percent of dealerships have an average retention rate of three years or more. When looking at only sales representatives, that figure falls to roughly 33 percent.

The national nonfarm private sector average, by comparison, is 67 percent.

From 2014 to 2015, non-luxury brands have improved their turnover rate of sales consultants, while luxury brands’ have remained constant. Both, however, are nothing to boast about.

“Still, can we really be pleased going from the 80 percentile to the 70s in turnover?” said Jim Appleton, president of the New Jersey Coalition of Automotive Retailers, via Automotive News. “That’s just a horrendous situation.”

Part of the reason dealerships are struggling is due to changes in the way customers shop.

During the purchasing process, most car buyers spend an average of 11 hours online and 3 1/2 hours offline, according to AutoTrader group, via The Wall Street Journal. As a result, customers are making significantly fewer trips to the dealership, and there’s less reliance on sales consultants to push product.

Thumbnail photo via Honda