I know you’re thinking, “Great, another article on employee retention.” It’s a topic that has been quite popular since NADA’s Dealership Workforce Study gave it the attention it deserved a few years ago. But the statistics are staggering, and until the issue is fixed, the effects need to be driven home. It deserves to be a focal point for you in the coming months and years. Think of it as one of your KPIs.

First, the numbers:

• Overall dealership employee turnover in 2016 was 43 percent, trending downwards by a few points from the year before.
• Sales positions at non-luxury stores saw annual turnover rates of 67 percent, a modest decrease since the previous year at 71 percent.
• Service advisor employee turnover also dropped from 41 percent to 39 percent.

But that, my friends, is far from good. We’re going to focus on service advisor employee turnover rates, how it affects your store, and what you can do.

How Service Advisors Who Jump Ship Hurt Your Store

Like all sales positions, people are replaceable. That might raise your eyebrows to hear, but it’s true. There are a few extremely tough aspects of replacing a service advisor, though.

• It’s expensive to replace an advisor. It costs your store thousands of dollars per month in unrealized service sales, training costs, and in guarantees you provide while the advisor gets up to speed. According to a DrivingSales study, employee churn costs approximately $45,000 per employee!
• CSI scores suffer. It’s a matter of getting up to speed again. A new employee has bumps in the road and typically has a few complaints here and there. Unfortunately, OEM CSI scores don’t take employee churn into account.
• They take customers with them. Some customers only trust one service advisor. If that service advisor leaves, certain customers may not return (even if they don’t follow the advisor elsewhere).
• It hurts morale. When staff leave, it has other staff members wondering about the ship’s stability. Do they need to be looking elsewhere too?

Why Service Advisors Leave

There are really just three reasons that a service advisor will want to leave your dealership. Some might argue it’s more or less, but these are the basics.

• More money/workflow elsewhere. Often it’s a pipe dream, thinking the grass is greener elsewhere. But if a service advisor is starving and can’t make ends meet at home, they’re going to be searching for a new job. Whether it’s their pay rate or the amount of work that is or isn’t coming into the shop, the result is the same.
• Disagreements with management. It happens that service managers and service advisors can butt heads. If a service advisor can’t get on the same page as their manager, regardless of whose fault it is, eventually they’ll move on.
• Better hours/location/promotion elsewhere. While you can’t fault an employee for trying to better themselves, it can cost your dealership big time. Losing a good team member outside of your store or dealer group always hurts.

How You Can Change Employee Retention Stats

Unless you have a promotion to offer every service advisor that’s moving up the ranks, you’re going to lose one here and there. But there are a few things you can do to minimize employee churn in the service department.

• Review your hiring process. I once had a manager who based the hiring process solely on the interview, never called references, and barely read the resume. Make sure you truly source the right candidates for your service advisor positions – the ones who have the drive to succeed, not necessarily the job history. You’ll eliminate needing to fire poorly-performing staff if you hire good ones at the start.
• Pay them fairly. I’ve never been a proponent of commission-based service positions (unless I had a really good month)! Instead, a healthy salary-based position with performance incentives and regular performance reviews is the best, in my opinion.
• Build a team atmosphere. People clash, especially when you’re in each other’s faces for 10 hours a day, five days a week. As a manager, take time to build your team up by providing non-work-related activities where you and your staff can mingle without titles hanging over your heads. Also, allow your staff to disagree with you, carefully consider their input, but make it known that your decisions are to be honored.

Thirty-nine percent service advisor turnover is too high. It costs you much more than you realize to lose a good service advisor, so do what you can to hire good ones and retain them. Minor costs to keep your good people are definitely less expensive than paying $45,000 for a new person.