70% of AutoNation sales staffers opt for new pay plan

Offer pay consistency and most employees will latch on, AutoNation Inc. has learned from the rollout of its new pay plan.

Last quarter, the pay-plan option took effect at all AutoNation dealerships. It offers salespeople a base salary plus bonuses and incorporates a new scheduling mechanism.

Seventy percent of the sales force chose the new option, known as Pay Plan Plus, while 30 percent chose to stay on the traditional commission-driven plan, said Marc Cannon, Auto-Nation's chief marketing officer.

"We're evolving with the work force, so I have to be able to offer something that is appealing with the young professionals entering the retail business," he said. "Their mindset and the way they approach work is different. The scheduling is different. Their pay ideas and concepts are different."

AutoNation, the largest new-vehicle retailer in the U.S., has rolled out the plan gradually over the last couple of years. New hires and long-term AutoNation dealership employees alike jumped on the new plan, Cannon said.

He said AutoNation's sales-staff turnover is lower than the industry's, but employee retention is a hot-button issue that many dealerships want to improve.

Industrywide, sales consultant turnover was 67 percent in 2015, according to the National Automobile Dealers Association's 2016 Dealership Workforce Study. That's a 5 percentage point fall from the year earlier, but still the highest turnover percentage among the nine key dealership positions: general manager/operator, sales manager, sales consultant, F&I manager, service manager, service adviser/writer, service technician, parts manager and parts consultant.

Only one-third of all sales consultants stayed in their positions for three years.

The pay-plan option "entices people to make a career choice," Cannon said. "The thought process on it was, as people start to leave and change jobs, millennials are coming out and we have to have something that appeals."

AutoNation gives employees their choice of the two plans to cater to different priorities and standards. "Some love [the new plan]; some prefer to stay on the old plan. It really depends on the person," Cannon said.

Some employees thrive on commission-based pay, while others want the stability and predictability of a base salary.

Across the board, though, employees have appreciated AutoNation's adjusted scheduling strategy. The retailer has started "scheduling to peak," Cannon said.

That means the most employees are scheduled to be on duty when the most customers are coming in or calling. For example, Cannon said, if "we know that on a Thursday evening, business picks up around 4, we want to make sure we are staffed appropriately for the 4 p.m. rush."

You can reach Hannah Lutz at hlutz@crain.com -- Follow Hannah on Twitter: @hm_lutz

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