Dealership employment stabilizes

Jan. 1, 2020
Most key service, parts and sales positions at auto dealerships have higher average salaries than the median household income in their regions.

Most key service, parts and sales positions at auto dealerships have higher average salaries than the median household income in their regions, and employees in dealer parts departments have some of the lowest turnover in the industry. Those are the findings of a new dealership workforce study that examined salaries and retention rates in the industry for thousands of dealerships.

NADA University, the educational arm of the National Automobile Dealers Association (NADA) released the 2012 Dealership Workforce Study Industry Report at the end of 2012. DeltaTrends designed the study and completed the data collection, while a team from Northwood University analyzed the national and regional data for the industry report.

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According to the findings, most key dealership positions in the report had higher individual average salaries than the median household income, and all exceeded the national average individual wage index. In addition, job retention, turnover and tenure at dealerships were more favorable than the national norms in most job categories.

The national wage index used for the study was just $42,980. According to Ted Kraybill, president and founder of DeltaTrends, the national averages for most dealership positions far exceeded that, including service managers ($99,105), service advisors ($60,678), B-techs ($52,415), parts managers ($86,556), and parts counterperson ($45,829).

According to the data, the average service advisor in a luxury franchise makes approximately $74,000 annually, compared to a service advisor at a non-luxury store ($56,000 per year). Not surprisingly, turnover is lower at luxury franchises. B-techs, meanwhile, earn $60,000 a year at luxury stores, versus $50,000 at non-luxury locations.

To measure tenure and turnover, the study asked whether employees had reached their three-year anniversary at each location. "Productivity tends to start to max out and level off at the three-year mark," Kraybill says.

For service managers, the average rate of turnover was 19.5 percent nationally, with a three-year retention rate of 69 percent. For service advisors, the turnover rate was 36 percent, and just 54 percent were at the three-year mark. Comparatively, B-techs had a 24 percent turnover rate, with 61 percent having reached their three-year anniversary.

The parts department, meanwhile, has some of the lowest turnover in the dealership. At the parts counter, the turnover rate is 16 percent, with 68 percent of those employees reaching their three-year anniversary.

"I think one thing you see is that there is a more predictable schedule in the parts department," Kraybill says. "They tend to work fewer weekends, and the hours scheduled for work have a lot of impact on turnover."

NADA had previously published a biennial compensation study, but the new study is based on a much larger sample size (350,000 payroll records from nearly 2,500 dealerships), and features national, regional and statewide data.

"This is the most comprehensive dealership workforce report ever produced in our industry,” says NADA Chairman Bill Underriner. “We appreciate the dealerships that participated and the invaluable support we received from the state and metro ATAEs (Automotive Trade Association Executives). The level of detail and planned annual updates will prove to be an indispensable resource to help dealers manage their workforce more effectively in a competitive marketplace."

While the data collected was different, Kraybill notes that between 2009 and 2011, salaries for almost all positions went up anywhere from 10 to 15 percent on average. "In 2011, we saw some stability come back into the workforce," Kraybill says. "Turnover went down. Most dealerships were very quick to contract when business dropped in 2008. There was a lot of churn."

In addition, the study found that there was a positive connection between years of tenure and increased new and used vehicle sales, as well as a strong correlation between dealership sales hours and new unit sales. In other words, the more hours the dealership was open, the more sales they closed. The downside to extended hours, however, was increased turnover in most positions.

"On the sales side, while being open more hours generates more sales, the sales people who are expected to work more hours tend to turnover faster," Kraybill says. "We see the same thing with service advisors. That's especially true when there's not much correlation between the number of weekends they work and how much money they make."

For more information, you can order the study here:

www.nadauniversity.com/workforcestudy

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