Franchised auto dealers have had a much easier time keeping their sales forces intact over the past two years, a national study shows.
In 2009 and 2010, the average dealership lost about a third of its sales force. Historically, dealerships have lost closer to half of their sales forces each year.
Average turnover for dealerships of all sizes was 34.4 percent in 2009 and 33.4 percent in 2010, the National Automobile Dealers Association reports.
Since at least 1998, NADA says sales force turnover has averaged 45 percent.
People are reluctant to leave their jobs during a time of high unemployment and economic uncertainty. The big decline in dealerships after the General Motors and Chrysler bankruptcies also has left fewer places for job-hoppers to land.
The drop in housing values also tends to keep dealership salespeople from moving to other jobs.
"If your house was under water, you'd be reluctant to move to another area," says Paul Taylor, NADA's chief economist.
At the smallest dealerships -- likely in rural areas with fewer jobs to choose from -- sales force turnover dipped to 24.4 percent in 2010, Taylor points out.
Some dealers view the downturn as an opportunity to keep promising salespeople. As gross profit per unit continues to decline, dealers often are paying minimum commissions and in some cases salaries.
Dan Boettcher is general manager of four Des Moines, Iowa, dealerships owned by Ken Garff Automotive Group of Salt Lake City. He says annual sales force turnover is running at about 10 percent.
Traditionally he has lost 40 to 50 percent of his salespeople in a year.
"We're doing a lot of training," Boettcher says. "We've been very selective in our hiring. And we've gone to more guarantees in our pay plan."
Often dealers pay a minimum commission of $100 to $150. Boettcher's stores are paying a minimum $250 per deal.
Even dealerships with substantially higher turnover rates are seeing an improvement.
Phil Long Dealerships, which has 11 new-vehicle locations, mostly in Denver and Colorado Springs, Colo., says 2011 turnover as of April was 78 percent on an annualized basis, down from 97 percent in 2010.
"The market is doing better, and there's some stability," says Michelle Hill, corporate communications manager for the Phil Long group. "We train our sales teams. We invest a lot in our employees."
NADA recognizes dealers' struggles to keep sales force pay competitive as vehicle margins shrink. Taylor says the association is revamping its sales force compensation survey to provide data that dealers can use to develop competitive pay plans.