One of the key struggles I continue to hear about from dealers is the inability to attract and retain employees.

Turnover has become a normal part of the industry, but many sources report employees aren’t leaving for better pay – they’re looking for better technology, coaching, training, and growth opportunities. Take a look around your dealership: Who do you think will still be with you in a year? More importantly, why are so many employees leaving?

Losing employees can have a significant impact on your bottom line, with replacement costs averaging 150 percent of the departing worker’s salary.¹ Digging a little deeper, we find that:

• According to the National Automobile Dealers Association (NADA), average turnover is 43 percent annually (with a much higher rate coming from the sales department).
• If the average yearly salary for a dealership employee is $55,000, that translates to $82,500 in replacement costs.
• In F&I, which has some of the highest salaries and is one of the most profitable departments, DrivingSales found an average dealer will spend $1.6 million each year in personnel replacement costs due to employee turnover. If an F&I manager walks out tomorrow, how much money will you spend to replace them? Can you even replace them?

Think of that same F&I manager. Maybe they excelled in their position and left for another job. Maybe they worked really well with others, knew your business in and out, and gave the best customer service.

You may have filled their role quickly, but how difficult was it to replace the work they did in that role? Do you ever wonder what you could have done to keep them from leaving? Would more money or a title change have been enough? Is there something else they were missing in their job experience?

Another critical component of low employee retention is how it affects the customer experience. It’s no secret that customers want a great buying experience. In fact, customer experience is three times more important than the vehicle design when making a purchase.²

Are you bringing your A-team to customer experience or have your top performers moved on to new jobs? Is your team ready when they have that one shot to make a great first impression or are you forced to rely on employees coming off the bench?

To keep employees engaged and customers happy, the work environment you cultivate is crucial. Here are a few ways you can start creating a world-class dealership experience for both customers and employees:

1. Offer new, engaging, user-friendly technology with built-in training for your employees.
2. Use solutions in service or sales that enable a forced-march process so your employees hit every point and customers don’t miss anything.
3. Reduce the need for third-party vendors, duplicate data entries, and manual keystrokes with connected technology throughout the dealership.
4. Keep customer contact information up to date so employees instantly know who they’re working with and customers feel valued.
5. Engage customers with a better F&I process and shorten contracts-in-transit times by funding deals electronically.

Updated technology will have a significant impact on your business. Employees will be more efficient and engaged, providing better customer interactions. Additionally, you’ll see a decrease in employee turnover, saving you money and keeping good employees at your dealership. What’s not to love about a better way of doing business?

¹ G&A Partners

² Deloitte

About the Author

Scott Worthington is the Director of Product Planning at Reynolds and Reynolds responsible for the ERA-IGNITE and POWER platforms, Business Office applications, Data Archiving, Reporting and Analytic Solutions, and ReyPAY^®. With over 28 years of experience, Scott started as an ERA^® trainer in 1991. His other roles have included being an original member of the Reynolds Consulting Group, running the Service Readiness organization, Marketing Director, and ERA Solutions Executive.