- News & Media
- Press Releases
- Wages Rise at New-Car Dealerships
NADA Study: Wages Continue to Rise at New-Car Dealerships
Millennials now account for 42% of the dealership workforce
TYSONS, Va. (Sept. 29, 2016) - The average
annual compensation for employees at new-car dealerships working in all
positions was $69,718 in 2015, an increase of 1% from the previous year,
according to a new study released today by the National Automobile Dealers
Average weekly earnings across all dealership positions
were $1,341 in 2015, a 1.4% increase, according to NADA's 2016 Dealership
Workforce Study (DWS), which highlights key trends on compensation, benefits,
retention and demographics of nearly 2,000 new-car and -truck dealerships that
participated in the survey.
“Now in its fifth year, the DWS continues to
show a retail-automotive industry with strong growth and earnings
opportunities,” said NADA Chief Economist Steven Szakaly. “U.S. new-car
dealerships reported improved revenues, earnings and employment across all
Dealership productivity, measured as gross profit per
employee, increased 0.4% to $8,446.
A new measurement in the 2016 DWS, which included a compensation analysis of
individual dealership employees or incumbents working in the same position in
2014 and 2015, revealed an average earnings growth rate of 6.3% year-over-year
compared to the average earnings growth rate in the private-sector of 2.2% in
General managers and F&I managers experienced double-digit
percentage earnings growth rates, while sales managers and sales consultants
increased 4.5% and 2.7%, respectively. Earnings growth in key fixed operations
positions increased an average of 7.5%.
In 2015, America's new-car
dealerships created new jobs and provided median weekly earnings of $1,026,
which exceeded non-farm, private-sector median weekly earnings of $825 by
Over a five-year period, average compensation across all dealership
positions increased steadily at an average annual rate of 3.2%, while median
income growth of all positions grew at an average annual rate of 2.6%.
TURNOVER AND RETENTION
For the first time in five
years, total dealership employee turnover in 2015 was relatively unchanged at
39.6%, up slightly from 39.3% in 2014, but still lower than the U.S. non-farm,
private-sector average of 46%, according to estimates from the U.S. Bureau of
Of the nine key positions measured in the survey -
general manager/operator, sales manager, sales consultant, F&I manager,
service manager, service advisor/writer, service technician, parts manager and
parts consultant - sales consultant and service advisor had the highest
turnover rates, but showed signs of improvement.
Annualized turnover for
sales consultants at all new-car dealerships, which includes both non-luxury
and luxury franchises, dropped five points to 67% in 2015 from 72% the previous
year. Sales consultant turnover at non-luxury dealerships declined to 72% in
2015 from nearly 80% in 2014. Turnover at luxury-brand dealerships was 48%,
unchanged from the previous year.
Service advisor turnover dropped two
points to 39%.
demographics at new-car dealerships according to the study continued to shift
from a generational perspective, but not a gender perspective.
dealerships are doing a better job of engaging and retaining Millennials,” said
Szakaly. “Sixty percent of all new hires in 2015 were Millennials, up from 57%
the previous year.”
Millennials (Gen Y) increased from 38% of the total
new-car dealership workforce in 2014 to 42% in 2015, eight points higher than
the 34% estimate of Millennials in the entire U.S. non-farm private-sector
"As more and more dealerships add flexibility to work
schedules and move away from 100% commission pay plans to attract and retain
Millennials, non-luxury brand dealerships reduced sales consultant turnover by
eight points,” Szakaly added.
The ratio of women working at new-car
dealerships was 18.6%, a slight increase in 2015. Women accounted for 20% of
all new hires in 2015, which was the same figure reported from the previous
The fifth annual DWS, which was conducted for NADA by the research
firm ESI Trends, analyzed more than 385,000 payroll records from 1,956 new-car
and -truck dealerships. Each dealership completed a questionnaire, which
identified franchises, and provided information on sales volume, weekend work
schedules and employee benefits.
The report, Automotive Retail:
National & Regional Trends in Compensation, Benefits & Retention,
also provides comparisons by luxury and non-luxury dealer franchises, as well
as other information and trend data.