Dealer Employees Paid More, but Retention Remains Issue
The National Automobile Dealers Association released its second annual NADA Dealership Workforce Study back in November, but the organization dug back into the report this week, releasing a few more key findings — including an interesting tidbit on pay scales.
According to the report — which was produced in partnership with DeltaTrends — car dealership employees, on average, earn 27 percent more than the average weekly earnings of all U.S. private sector employees.
The 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 enrolled in the 2013 Dealership Workforce Study.
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 overall median salary in dealerships rose by almost 4 percent in 2012.
Dealerships are also 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.
NADA cautioned that to keep them, “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 are also increasing their female employee numbers, as dealerships hired women 19 percent of the time in 2012, up 2 percent from the previous year.
However, NADA 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 the U.S. private sectors of 41 percent.
That said, turnover is still an issue, NADA pointed out, stressing that high rates might be due in part to long hours.
“The total number of hours and weekend that employees are scheduled to work has a significant impact on retention,” NADA said in the report.
Sales consultants working 50 to 60 hours per week earn 4 percent more a year than their counterparts working 40 to 45 hours.But there's a caveat.
When employees work over 45 hours, turnover increase and retention decreases, implying a change to the incentive system may be due.
For more insight from the NADA study, see the Auto Remarketing story below:
NADA Report Offers Insights on Recruiting, Retention of Dealership Workforce