U.S. dealerships are enjoying drastically lower turnover rates as their employees' pay has soared, but industry experts warn the trend won't stick around when inventory levels normalize enough to make the job of selling vehicles harder and less lucrative.
2021 was a fruitful year for U.S. dealership employees, as their average earnings pushed past the $100,000 mark for the first time. The jump was led by increases for employees involved in vehicle sales, where high demand resulted in pricing power and a seller's market for dealerships. NADA said average weekly earnings at dealerships participating in its annual Dealership Workforce Study increased 27 percent in 2021. With these gains, average dealership turnover fell to 34 percent — the lowest turnover rate ever recorded in the 11 years NADA has conducted the study — from 46 percent in 2020.
But those improvements have been mainly driven by the ease of selling in the low-inventory market of the last two years and thus are closely tied to the high commission checks sales employees are getting as new- vehicle transaction prices routinely align with sticker price or above, dealership employment experts say. And the shift isn't permanent.
"It's the best time ever to be a salesperson on a variable comp plan," said Adam Robinson, CEO of dealership recruitment technology company Hireology. "You've got dealer sales personnel making $200,000, $300,000, $400,000 a year. Of course, the turnover rate is going to be low. You don't have to sell right now."