The NADA 2016 Dealership Workforce Study tells the story. On average, the service advisor turnover rate annually is 39 percent. That’s roughly two in five service advisors every year. While it’s much better than the sales floor, with sales consultant turnover at 65 percent each year, it’s an alarming statistic. The detrimental effects are many including an impact on car sales.

The Results of New Faces in the Service Department

Repeat car sales are largely dependent on a service relationship with the selling dealer. In a CDK Insights report, “81 percent of drivers agree that a quality aftersales service is more important than price.” A consistent, personal service experience simply isn’t of the same caliber with high service department employee churn.

Consider a consumer’s impression when they pull into the service drive and are met with unfamiliar faces. The consumer must start a service experience from scratch, and without the trust they may have established with a previous employee. During the course of a three-year vehicle ownership, it’s possible that most or all of the employees a customer meets have moved on. That goes further than just service advisors, also; that extends to support staff, technicians, and management.

Can You Expect Repeat Clients?

Since quality aftersales service is so critical, can you reasonably expect a customer to return for their next vehicle purchase? An exhibited inability to retain service staff is likely to deter some customers while others haven’t developed an ongoing trusting relationship to draw their repeat business.

An Overall Indicator of Dealership Health

Employee churn in the service department can be an indicator of the dealership’s overall health. At minimum, a customer can get the impression from turnover that the store isn’t at its prime. As the face of aftersales service, a constant presence by a friendly, professional service team can aid in repeat sales, even if the sales floor has undergone significant staffing changes.

Stem the Flow of Service Staff Churn

Controlling the turnover rate in the service department has the potential to positively influence car sales. Demonstrated reliable aftersales service draws customers more so than price. As well, repeat business and referrals are much less expensive than ‘buying’ a new customer.

Hire Top Quality People

Look for experienced individuals with long tenures in their employment history. It’s unreasonable to expect zero turnover, yet hiring people with a tendency to stay put can dramatically reduce your churn rate.

During the hiring process, look for applicants with good moral character and positive references. The quality of person is more important than their current skill level also.

Provide Exceptional Pay Plans

While money is an obvious motivating factor for employees to stay put or move on, it’s more than that. Exceptional pay plans demonstrate the value you place on a team member’s hard work and are a reward as much as they are compensation. Develop strong pay plans that make it hard to leave.

Encourage Training and Advancement

Some churn can be expected due to ‘dead-end jobs’, even for top-quality team members. This impacts your store two-fold: you lose a good employee PLUS a future upward-mover. Encourage your service staff to continually develop and hone their skills, and offer opportunities to train towards advancement within the dealership.
Lower your service employee churn. The evidence will be noticeable in the service department morale, service department bottom line, and in the dealership’s car sales figures.

Originally posted on May 13, 2017

4 COMMENTS

  1. Your article is excellent but just the tip of the iceberg. How about the pressure to achieve that 100 CSI? In today’s business climate it’s either a pass or fail and the pressure is intense from the factory and management that so often is tied into the Advisors pay plan.This alone can make the best of the best to look elsewhere for employment. How about long hours? 9, 10, 12 hour days are common. How about working six day weeks and Saturday’s and holidays. How about the onslaught of demanding customers, incoming phone calls, technician shortages, insurance companies to just name a few challenges that Advisors face. Until the manufactures and dealers understand and address what a typical Advisor deals with turn over will remain high.

  2. Excellent comment John! Perhaps the high stress, unreasonably high expectations, absurd roller coaster commission pay plans, belligerent customers who refuse to pay for diagnosis time and believe everything should be warranty, and just plain bad upper management are causing higher than normal turnover? The stress level alone makes a potential six figure paycheck not worthwhile for many people. Manufacturers and franchise owners should survey their employees more than the customers to find out what is really happening. Technicians that are not treated very well will go home exhausted after work and tell ten of their friends and family members to stay very far away from automotive industry employment.

    • Martin were both spot on. I started my career as a service advisor 31 years ago. I wouldn’t be a service advisor for no amount of money today. It’s a no-win because of the issues we both brought up. 20 years ago at a Mercedes Benz dealer I was well into the six-figure pay scale. I then started into Fixed Ops management, then into consulting and training service management and advisors. In January I will be retiring from the car business. Thank goodness even though I was very successful and made a great income I wouldn’t do it again in my second life.

  3. I agree John, the cost of success in the auto biz is increasingly too high for an increasing number of employees. I’ve heard many veterans speak the same wisdom about how a career in this business was worthwhile and lucrative many years ago but certainly not anymore. Anyone else remember the great recession of 2008/2009? Too many have forgotten already. The no win situation is now quite prevalent after that disaster and the limp recovery up to today is not impressive. A 39% turnover rate and a tech shortage are shocking facts which could allow anyone to make conclusions about the dysfunctional state of this badly managed industry. John that tip of the iceberg will end up sinking the Titanic again and again until a better strategy is courageously implemented. Maybe it’s cheaper to beg congress for another bankruptcy bailout…

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