U.S. car dealerships are making progress in offering employees a better work-life balance, but continue to face challenges in retaining sales staff and recruiting women.
Those were some key findings in the National Automobile Dealers Association’s third annual Dealership Workforce Study released today. Its findings are based on data collected from more than 240,000 payroll records last year.
“The report shows a growth industry with strong earning opportunity in a challenging work environment,” said Ted Kraybill, president of ESI Trends, the Largo, Fla., firm that compiled the study for the NADA.
The median weekly earnings at dealerships outpaced those of the overall U.S. private sector workforce, and while the industry is “often characterized as a ‘high-turnover’ work environment, actual turnover at new-car dealerships is significantly less than the private-sector average,” Kraybill said.
Total dealership employee turnover increased from to 36 percent from 35 percent, compared with 42 percent nationally for private sector employees, said the report.
But sales consultant turnover exceeded the national average for the private sector, Kraybill said. The average dealership had a 66 percent turnover rate among sales consultants, up 4 percentage points from the previous year, said Kraybill.
A big part of that increase was because of higher numbers of Generation Y employees in those positions, Kraybill said. Of new hires, 47 percent were Gen Y, which Kraybill defines as those 18 to 29 years old. Most are coming into sales positions and service technician jobs. They constitute 27 percent of the dealership workforce, up from 23 percent the previous year, said the report.
“With Gen Y, for whatever reason, comes higher turnover,” Kraybill said. “A higher percentage of those unemployed are Gen Y, and dealers are having to draw from the ranks of the unemployed.”
In many cases, those Gen Y workers who come on board are people struggling to find jobs in their first career choice, Kraybill said. “So if they don’t have as many choices, then they have to consider things that might not have been their first choice,” Kraybill said. “It’s an opportunity for dealers who are getting a first crack at this new, untested talent.”
But Kraybill warns that dealers are turning off Gen Y workers because of the way that “dealers historically operate.” Specifically, he said, fully commission-based compensation doesn’t appeal to Gen Y workers.
Gender gap persists
Many dealers are starting to do the right things to retain sales consultants, Kraybill said, such as shifting toward more salary-based compensation. They are also “reorganizing their staffing models to reduce total hours and focusing on team-based incentives,” Kraybill said.
The percentage of dealerships that schedule employees to work more than 45 hours per week has declined over the three years of the study.
In 2013, 13 percent of dealerships surveyed scheduled sales consultants to work more than 50 hours, compared with 14 percent in 2012, the study said. The report showed 16 percent of dealerships scheduled service advisers for those hours, down from 17 percent the previous year.
The study found no change in the gender gap at dealerships. Of active payroll employees, 18 percent are women. Kraybill said part of the reason for the stagnation is that most available dealership jobs are in service as technicians.
“You’re getting more women coming in as service advisers, but a lot of them don’t want to turn a wrench,” he said. “So service isn’t going to help increase that, and on the sales side, the culture is very male-driven and it’s not necessarily an environment that attracts women.”
Among the other findings:
- In 2013, total dealership employment rose 3 percent to more than 1 million.
- Median weekly earnings were $976 in 2013, 25 percent higher than median weekly earnings of $782 for the U.S. private sector.
- Weekly earnings in 2013 increased 1 percent from 2012, a slower pace than the 4 percent growth the previous year.
The full report is free to participants and available to others for $150 at www.nadauniversity.com or 800-557-6232.