The average salesperson turnover rate in automotive dealerships is nearly 50 percent. And according to Delta Trends, a retail industry employee compensation and retention consulting firm, it takes about three years for a salesperson to become fully trained and develop their skills. What, then, does retaining a sales staff for three or more years do to a dealership's bottom line? Aside from the costs saved in recruiting, hiring, and training new workers, it improves customer loyalty, drives more repeat and referral business, and increases profits.
An NADA study suggests that the dealerships with the highest retention rates share many of the same practices as those who made Automotive News' 100 Best Dealerships To Work For list:
Recognizing that employees have lives outside of work - and taking steps to accomodate them - is helping more and more dealerships improve retention rates. Enforcing rigid "bell-to-bell" workweeks is likely to alienate salespeople (specifically younger ones) who value their free time almost as much as they do their paycheck. Stores can improve employee motivation by:
Giving employees greater flexibility makes them feel respected, and thus, more purposeful and invested in their work.
The team concept
Fostering an environment of collaboration, not competition, improves morale among employees. Workers want to be part of a team effort, not forced into me-against-you sales battles. This isn't to say that dealers should stop incentivizing top performers. But many dealerships are beginning to see the value in promoting team incentives as well - things like steak dinners, gift cards, or extra time off for sales teams that hit their targets.
Small acts of kindness
Bonuses and incentives are great, but human rewards can go just as far in promoting employee well-being. Small gestures like bringing in breakfast or offering a few words of praise show workers that they are valued and respected. Managers who get to know their salespeople on a more personal level (family, outside interests, etc.) are not just building rapport, they are learning valuable information about their employees' goals, experiences, and motivations - so that they can manage more effectively.
Dealerships cannot rely solely on paying their employees more to increase retention. Because even though commissions and bonuses have gone up significantly since 2009, the turnover rate hasn't changed in most stores. Those that have improved, however, recognize that more salespeople are motivated by things other than money, and have worked to create more enjoyable and less restrictive workplaces to keep them there for the long haul.