Millennials lead the way when it comes to calling it quits at car dealerships, where employee turnover has been a chronic issue.
Cox Automotive’s 2017 Dealership Staffing Study says the turnover rate for 20- and 30-something Generation Y’ers is 52%, meaning, on average, every other Millennial who hires on at a dealership ends up leaving.
But it is not just them. About one in three Gen X’ers and one in four Baby Boomers account for dealership turnovers that are “crazy high” industrywide, says Isabelle Helms, Cox’s vice president-research and market intelligence.
Total dealership turnover in general is 40%, but is 67% in sales, where working on commission without a guaranteed income scares away both jobholders and job-seekers, according to the study that proposes a remedy or two.
“We look at the pain points, and then think about opportunities to hire and retain talent,” Helms tells WardsAuto.
Such remedial initiatives include proper training of employees and hiring the right people to begin with. “But two-thirds of dealers acknowledge they don’t have a defined staffing strategy nor clear plans on keeping employees trained,” she says.
In partnership with Hireology, the Cox study sought opinions of about 1,000 people, including dealers, their employees and job seekers.
Of the latter, only 5% expressed an interest in an automotive job and only a quarter of that small group showed an interest in auto-retailing work, although respondent interest increased one third upon learning of dealership opportunities, Helms says.
Many of the people who showed “zero interest” in dealership employment said they didn’t want to work on commission or thought they lacked the necessary skills, she says. “The biggest opportunity is to create awareness. There is more to working at a dealership than being a front-line salesperson.”
Dealerships employ about 1.1 million people in the U.S.
Groups considered recruitment-worthy include college students, consumers who purchased a vehicle in the past six months, Hispanic job-seekers and people who already are working nights and weekends, the study says.
Helms describes some dealers as “progressive” in offering salaries combined with commissions and bonuses, flexible hours, regular recognition of staff accomplishments and up-to-date technology, something that’s particularly attractive to Millennials.
“We learned young people are driving a lot of changes,” she says, noting many of them pursue a balanced lifestyle and disdain grueling work schedules.
Although Millennials as a generation sometimes take a lot of heat from their elders for this and that, the study indicates many dealers see their strengths. Those include the ability to sell to peers, tech savviness and receptiveness to change.
Conversely, the study says Gen Y weaknesses as perceived by dealers include a need for immediate recognition, little drive or self-motivation, a sense of entitlement and an overdependence on technology.
Nearly 70% of dealership employees are more likely to stay at their jobs if they receive ongoing training. The attrition rate for rookies is reduced if they are trained or able to job-shadow a veteran worker “so they’re not thrown into the fire,” Helms says.
The revolving door of dealership employment costs the auto-retail industry $5 billion a year, according to the study. That includes the cost of constant hiring, loss of sales stemming from rookie missteps and employee dissatisfaction’s impact on customer loyalty.
“The cost of turnover is eating into dealers’ bottom lines,” Helms says.