With all of the talk about the inventory issues and the concern about arising e-dealers a massive issue in the auto industry is often overlooked and that issue is the strikingly high turnover rate of sales professionals.
How Big is the Problem?
A recent Cox Automotive study reports that dealerships on average are experiencing 80% or more turnover of their salespeople per year. That is an incredible increase from their previous reports from 2018 estimating salespeople turnover of 67%. The turnover rate is only getting worse as the years progress and the pandemic has exacerbated the issue tenfold.
Forbes has coined the term “Turnover Tsunami” to describe the huge amount of turnover sweeping across America. That couldn’t be truer because this “Turnover Tsunami” is hitting every industry in its path, not just automotive. There have been other terms to describe this phenomenon such as the ‘Great Resignation’, but this surge has been more than just people quitting their jobs. It has resulted from a longing for something better.
The Achievers’ Employee Engagement and Retention Report stated that as of March 2021 52% of workers in America planned to look for a new job in 2021 and we are absolutely seeing workers follow through on that plan now.
What is it Costing You?
On average, to get a new hire fully up and running in this industry it costs $10,000 each says Auto Success. That means that new hires who are invested in and end up leaving their position are costing the industry billions of dollars.
Ted Kraybill, president of ESI Trends, a firm that conducts the annual National Automobile Dealers Association Dealership Workforce Study, backs this up commenting, “How big of a problem is it for the industry? It’s half a million a year for the average dealership. It’s billions of dollars for the industry. And it is not getting better.”
These are billions of dollars the auto industry cannot afford to waste, especially after the major economic hit of the pandemic.
How Do We Fix it?
Value your salespeople and make investing in them your number one priority. Truly valuing your people and setting them up for success in a way that unfortunately most dealerships do not will provide you with loyal, happy employees who stick around. If you’d like to learn more about how to invest in your people read our blog here.