In 2015, the National Automobile Dealers Association (NADA) released its annual workforce study. The study found that compensation rose 5.1 percent for all employees at new car dealerships, and productivity rose 3.4 percent. Income growth in fixed operations (service and parts) was 6.2 percent, compared to 1.8 percent for sales positions.
What were the key trends this year in terms of compensation at dealerships?
The most important things are that we’ve seen salaries and wages go up, and that we’ve seen productivity go up as well.
Fixed-ops compensation is rising faster than sales compensation. What does that tell us?
Part of that is driven simply by the effect of sales. Sales are up. It’s also a result of the increased dependence on fixed operations a profit center. There has been a realization that since margins on new vehicles are under so much pressure, that you need to focus on this area of the business.
What else is happening relative to service and parts salaries at dealerships?
I think compensation rates are clearly moving upward across all of those categories, and part of that is reflected in the fact hat there is fierce competition for qualified techs as well as mechanics. A secondary problem is that there hasn’t been a stream of these individuals joining the labor force. Traditionally, and wrongly, these jobs have been looked down on, and there is a need for dealers and the industry as a whole to engage with community colleges and with high schools to attract people.
There has been a continued increase in the number of women working at dealerships, as well as younger employees (particularly millennials). How will this affect dealerships?
Certainly I think expectations on work hours and relative compensation is very different. Part of the high rate of turnover you see is that in many cases, younger workers find out that they don’t like some of the work that’s involved, as in sales. That’s not really saying anything negative about the industry, but is a reflection of the fact that younger people try out jobs, but don’t necessarily stick with them.
In many respects this industry faces the same challenges that every other industry does. A huge amount of the knowledge base is retiring, and you have to figure out a way to transfer that knowledge base to the younger workforce.
Subscribe to Aftermarket Business World and receive articles like this every month….absolutely free. Click here.
