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Automotive Study Addresses Dealership Staffing Challenges

Posted by Harrison Friedes | Mon, Jun 10, 2019 @ 10:00 AM

Asian Car Salesman Speaks to Woman Entering CarCox Automotive’s “Dealership Staffing Study” addresses the dealership staffing challenges that plague auto dealers every day. This study randomly sampled 50 dealerships executives (owners, principals, and GMs), 343 dealership employees, and 834 people from the general U.S. population.

Below is a synopsis of the challenges and solutions presented.

Dealership Staffing Challenges

First, payroll equals more than half of the dealerships’ gross profit margins on average. Also, the average cost per new hire is $10,000, and the turnover rate in a sales position can be as high as 67 percent. This means a dealership with 20 salespeople could potentially lose $134,000 a year in this one area alone.

In addition, two out of three dealers do not have a specific staffing strategy in place. It may be vital for these dealerships to develop one, as on average salespeople have 2.7 years tenure. Furthermore, Millennials make up 42 percent of the workforce in dealerships, 60 percent of new hires, and more than half turnover at an annual rate. And finally, female employees turnover at an even greater rate, 90 percent annually.

Dealership Staffing Solutions

Car Salespeople Pointing towards CameraThe study points out that 42 percent of new car buyers return to make a purchase simply because they had a prior good experience at a dealership. This indicates the importance of training salespeople in the necessary skills to attract repeat business while ensuring they remain retained themselves.

To attract Millennials, it could be wise to make a greater effort to stay current with the times. Seventy-eight percent of Millennials were strongly influenced by how innovative a company was when deciding if they wanted to work there. One possible option for remaining innovative is to frequently solicit and hone the input of millennial employees regarding management topics.

Along similar lines, only 43 percent of short-term employees surveyed report discussing career opportunities during their interview. Consequently, mentioning opportunities for career advancements can further assist successful automotive dealership staffing.

On a more fundamental level, dealerships would be well-served to make sure their customer-facing employees receive enough training to do their jobs comfortably. Only 54 percent of employees in customer-facing positions reported they received enough training to do their jobs well. Checking in with employees to make sure they are provided with adequate tools can be a great first step.

The study breaks down recruitment into three steps:    

  • Attracting desired talent.
  • Assessing talent for skills and fit in the organization.
  • Onboarding new hires to set them up for success and keep them deeply engaged.

Aerial View of Car Salesperson and CustomerTo keep a strong handle on staffing, Cox recommends dealerships:

  • Have a strategic plan for hiring, staffing, and training employees.
  • Consistently track turnover.
  • Actively recruit rather than hire only when needed.
  • Provide formal training outside of OEM product training.
  • Frequently prompt discussions about career growth and development in a way that provides opportunities to employees.

These actions will help any dealership face their dealership staffing challenges and prevent a loss of income.

Dealership Payment Solutions

Staffing is a challenge all dealerships need to make sure they are addressing. Another timeless area to address is payment processing. Auto dealers can use CrossCheck's Auto Industry RDC Solution (C.A.R.S.) program to help increase sales and mitigate risk while saving time and money. C.A.R.S. has three main components:

C.A.R.S. uses Remote Deposit Capture (RDC) to automatically deposit guaranteed checks into auto dealers’ accounts. Along with RDC, C.A.R.S. employs Multiple Check, a premiuim service which allows consumers to write up to four guaranteed checks on one sale or down payment. Finally, C.A.R.S. utilizes the Check on Delivery (COD) premium to guarantee the payment of delivered parts.

Download our free guide to learn how C.A.R.S. can serve your dealership.

auto dealer cars

Topics: Auto Dealerships

Written by Harrison Friedes

Inbound Marketer with Crosscheck, dedicated to giving you clear and informative content that will add to your business practices.