High employee turnover creates high costs for dealerships. In addition to the cost of finding a new team member and negotiating a new salary, there is also the incurred cost of time, energy, and inactivity on the lot.

Unfortunately, high turnover is epidemic at many dealerships. According to a McKinsey & Co survey, lower-performing dealerships experience an average of a 71% turnover rate. That’s a pace that could prove fatal to some. 

Breaking the Cycle

There are steps dealerships can take turn the tide. These methods address the core issues that drive the exodus from dealerships. They look at the fears, needs, and unique talents of staff members. In short, the steps are creating mobility paths, offering fixed salary options, and providing means for employee empowerment. 

Creating Mobility Paths

One fear employees have going into the automotive business is career mobility. In many instances, there is no clear path from sales upward. Looking at the job, many worry that they’ll be stuck in sales for the rest of their lives.  For an ambitious young salesperson, that thought is enough to give a job a hard pass or to get out fast.

A smart dealership looking to cut turnover will outline and publicize a straightforward track for advancement within their business. Employees should know what steps they need to take to move forward, whether that means continued education, the number of years served, or other requirements.

Additionally, giving in-house internship and learning opportunities can improve a job’s attractiveness as employees feel as though they can grow within the role. They know they’re not just doing the same thing forever, relying on only the experience of time to improve from their first day. Instead, they’ll see that they’re becoming more significant assets and experts, adding value to their titles, rather than losing it with age. 

Offering Fixed Salaries

Although this upcoming generation has a reputation for flightiness, the truth is that many of them are more risk-averse, wanting stability over fast cash. For this reason, many look for jobs with fixed salaries, even if the end total of those salaries is considerably less than a commission-based pay scale. Women as well are more likely to prefer a stable, fixed salary they can depend on over the unknown of commissions.

turnoverThough salaries are frequently lower than commissions, these groups feel they’re getting a good deal, with a better work-life balance. For this reason, dealerships are starting to offer the option of salaries for sales staff, with the additions of fewer hours and available bonuses.

These programs are succeeding in attracting and keeping the demographics above at higher rates than typically seen. Dealerships should consider giving employees a choice of which payment system they want to buy into, as well as the option to switch between them at specified intervals if they desire. 

Providing Means for Employee Empowerment

One of the things that leads to hiring a sales member is their talent. Dealerships look for things like initiative, ambition, creativity, and more when interviewing. However, after starting the job, new hires can find themselves running into a lot of red tape that impedes their ability to perform at their highest levels. They discover that they need to continually look for managers to approve their ideas, or hand off tasks they feel capable of doing for themselves.

Giving employees freer reign to do things is a huge morale booster. Knowing that they’re trusted and have room to try new approaches helps cure disengagement at work, and in turn, lowers turnover rates. Find ways to give sales members and teams more autonomy, and they’ll feel greater fulfillment and loyalty to the dealership.

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