New Report: Employee Salaries at New-Car Dealerships Rise

McLEAN, Va. (Oct. 27, 2015) - Employee compensation and productivity at new-car dealerships increased across all job positions in 2014, according to a new report released today by the National Automobile Dealers Association.
 
In 2014, the median weekly income for all employees at new-car dealerships increased 5.1 percent to $1,026. On average, dealership employees earned nearly 29 percent more than employees in the private-sector workforce, according to a comparison of dealership salaries and 2014 fourth-quarter median weekly earnings of all U.S. employees, as compiled by the Bureau of Labor Statistics.
 
“The bottom line is that new-car dealerships offer well-paying jobs with benefits,” said NADA Chief Economist Steven Szakaly. “Jobs at new-car dealerships have continued to outpace average U.S. wages, and are some of the best-paying jobs available. This highlights the importance of the retail-auto industry to U.S. job growth, and how critical new-car dealerships have become in their communities across the country in providing high-paying, stable employment opportunities following the recession.”
 
In addition to national and regional data on dealership compensation, the 2015 Dealership Workforce Study report, Automotive Retail: National & Regional Trends in Compensation, Benefits & Retention, includes data on retention and turnover for 60 dealership job positions, as well as information on employee benefits, hours of operation and work schedules.

Dealership productivity, which is measured as monthly gross profit per employee, increased 3.4 percent to $8,410 per month per employee in 2014. Growth in average and median weekly wages was in line with estimated increases in employee productivity and the competition for talented dealership employees, Szakaly added.
 
Employee turnover across all dealership positions increased from 36 to 39 percent, which is still 5 percentage points below the BLS-estimated 44 percent turnover within the entire private sector.
 
The only key dealership position whose annualized turnover exceeded that of the average private-sector rate was sales consultant, which recorded a turnover rate of 72 percent.

“The high turnover rate of sales consultants can be attributed to two factors,” Szakaly added. “First, this represents many entry-level workers who decided to try sales but then realized they did not like it. Second, automotive retailing is going through major industry changes, which is putting pressure on sales staff earnings.”

Annualized turnover for all dealership positions varied significantly by region, from a low of 27 percent in the Mid-Atlantic region (New Jersey, New York and Pennsylvania) to a high of 46 percent in the Mountain region (Arizona, Colorado, Idaho, Montana, Nevada, New Mexico, Utah and Wyoming).

Other key workforce trends at new-car dealerships in 2014 include:

  • Growth in median income for key sales positions averaged 1.8 percent compared to an average of 6.2 percent for fixed-operations positions, which include service managers, service advisors/writers and auto technicians.
  • Women comprised 18.5 percent of employees on new-car dealership payrolls in 2014, nearly a full percentage point more than in 2013. Among the key positions, F&I manager had the highest ratio of women followed by service advisor.
  • The percentage of Millennials working in dealerships increased from 27 percent to 31 percent. Millennials represented 48 percent of dealership new hires in 2014.
  • Employees working at midsize dealer groups (10 to 40 dealerships) outpaced large dealer groups in weekly earnings.
  • The number of dealerships that were open on Sunday increased to 41 percent in 2014 from 34 percent in 2012.

The fourth annual Dealership Workforce Study report was prepared for NADA by the research firm ESI Trends, which conducted the study and analyzed 2014 data. The report is designed to help dealers recruit, hire and retain employees.

The 2015 study analyzed 290,000 payroll records. In addition, each dealership completed a questionnaire which identified franchises, and supplied information on sales volume, weekend work schedules and employee benefits. The report also provides comparisons by luxury and non-luxury dealer franchises.

The enrollment period to participate in the 2016 study opens on Dec. 16, 2015. For more information or to participate in the next study, visit www.nadaworkforcestudy.com.

To purchase the report, call NADA Customer Service at 800.557.6232.