Revolving door in sales department slows -- for a while

Donna Harris covers automotive retailing for Automotive News.

The official numbers suggest that dealers should be having an easier time retaining salespeople than they have in many years.

The National Automobile Dealers Association reports that overall sales force turnover for franchised dealerships dipped to 34.4 percent in 2009 and a record low of 33.4 percent in 2010.

Since at least 1998, sales force turnover has averaged 45 percent.

It’s not surprising that during a time of high unemployment and economic uncertainty dealership salespeople would tend to stay put. The drop in housing values, too, would tend to keep them from moving to other jobs.

The big decline in the number of dealerships following the GM and Chrysler bankruptcies also leaves fewer places for job hoppers to land.

At the smallest dealerships -- likely in rural areas with fewer jobs to choose from -- sales force turnover dipped to 24.4 percent in 2010.

But dealers still tell me it’s difficult to retain good salespeople. The gross profit per unit continues to decline, driving some to pay minimum commissions and in some cases, salaries. As the economy recovers, dealers need to come up with some solutions for building a more stable sales force.

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