DealersEdge Professional Forums

I would very much like to hear some discussion on Personnel Turnover Rate

1. What is your dealership Personnel Turnover Rate?
2. If it is low why and if it is high why?

The last several months have been a rude awakening for me. I am in Texas and spent 16 years with one dealer. Looking back on financial statements it would be fair to say we averaged about a 20 to 25% overall dealership turnover rate. The variable averaged about 25 to 30%, so obvious fixed average was lower. In 1999 the owner sold the dealership and I did not fit in with the new owners plan so it was time to start looking for a new job. Two weeks later my family and I are moving across the state to what I thought was going to be a challenging and rewarding new dealer. As General Manager of variable operations of three domestic dealerships in a major metropolitan area, I was very excited about the new challenge. About 2 months into the job is was working on a business plan for the remainder of 1999, and getting prepared for the year 2000. While going over past financial statements I was shocked to find out that the dealership that the owner had owned for the longest length of time, the overall personnel turnover rate was a shocking 185%, keep in mind this dealership only had 90 employees. The variable turnover rate was a staggering 205%. The other two dealerships were not much better. Needless to say I resigned the first part of this year.

After taking a few months off to relax and spend time with my family, I decided it was time to go back to work. This time I made sure the first thing I looked into was the dealerships personnel turnover rate. I have been on several interviews all across the country, while not all have made me an offer, 4 of the ones that have had an overall personnel turnover rate of 90% or higher. Now I know that turnover has always been a problem in our industry, however I have been shocked at how much of a problem it is at some dealers all across the country. Maybe I was spoiled for 16 years, or maybe the dealers with low turnover obviously have no openings. I would certainly like to hear some comments.

The other rude awakening I had happened last month. And it might be a testament to why the turnover in salespeople might be so high. After turning down several offers and fixing everything around the house that was broke, I decided instead of driving my wife nuts on a daily basis I would find a temporary job as a salesperson. I thought it would be challenging to see if I could still sell after many years of management, and it would keep me abreast of what is going on in the market, and most important create some income so I would not drain my finances. I also decided that I would be up front and tell the dealership that would hire me that my intention was to eventually find a job as GM or GSM, that way their would be no surprise if I had to go on a interview. The first dealer I called and talk to the General Sales Manager, and he said they were always looking for experienced sales people. When I went to the dealership I asked for the GSM, and told him I was looking for a job. I did not mention my past experience, only that I had experience. He told me I needed to see the Sales Manager, however he was not in so I talked to the assistant manager. I told the assistant manager of my previous experiences and that I had been everything from salesperson to general manager, I did not tell him my intentions, I thought it would be best to tell the Sales Manager or the General Sales Manager. The assistant manager told me to come back the next day and talk to the Sales Manager, and so the next day I returned to the dealership and told the assistant manager that I was there to see the Sales Manager. He told me to wait a few minutes and that he would tell the Sales Manager I was there to talk to him. Two minutes later the assistant manager came out and told me they had enough salespeople on the floor and did not need anymore salespeople at this time. A shock since the GSM told me they where always looking for good experienced salespeople. By the way I spent a total of about 15 minutes at the dealership. I decided to investigate the hiring practices at some other dealerships and I am shocked at some of the hiring practices I found. I went to one dealership and asked for the GSM, again this one also told me to talk to the Sales Manager. This manager told me to fill out an application and he would have someone interview me after I was done. After waiting in the sales lobby for about 45 minutes, finally someone came and got my application and took me into an office for an interview. After about 10 minutes of the interview, this person told me he was amazed at my previous experience, and that he was really a salesperson and not a manager. He said the manager was busy and asked him to interview me. Neither the manager nor the GSM knew of my past experience. The salesperson doing the interview was embarrassed, and told me he had only been working at the dealership about six months.

If this is the way some dealers intend to fill sales positions, with todays job market they have a long and hard road ahead of them. I know the turnover rate and hiring practices are not like this everywhere.

I would certainly like to hear some discussion on this subject.

P.S I am still looking for a GM/GSM position

Hi,

In my opinion, personell turnover is a function of business conditions and the 'clique-ishness' of dealer employees. Think about it: the manager wants as many sales people available to cover floor traffic, but the existing sales personell see more sales people as less sales for them. This is a conflict that leads to people leaving a job because someone new was hired.

This also occurs in the shop: techs are paid by what work they flag and the more techs the shop has, the less opportunity for the other techs. Again, if you hire additional techs, the current staff may see this as a pay cut and find work elsewhere.

Also take into account seasonal effects: summer seems to be busy and requires more people than winter. Did you account for this characteristic?

Haven't given the subject much consideration since I believe the goal of the business is to make money. If low or high turnover allows me to reach the goal, then so be it. Just on the surface, its easy to say our turnover is low since the same people have been at the store for many years.

As for your job hunting experiences, you probably look like a threat to the middle sales management of the stores you applied with. If I where a GSM and interviewed someone who wanted my job, I don't think I'd rate the applicant very high. GSM's like job security.

Suggestion: talk directly to the dealer/operator and let them know your ambitions. I would not be opposed to hiring an ex-GM for a sales job but I'd worry that you would leave at the first opportunity putting my business in the same situation it was before you were hired!

scott

It has been my expereince that hiring at many dealers is a catch as catch can proposition. Poor up front interviewing and information gathering and little or no research such as credit and background checks. Too bad because the cost of a poor hiring decision and resultant turnover is high. I speak from bitter expereince.
Rob K
Dealer Service Corp.

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It's too bad that finding and retaining good people, offering a job ladder and longevity inducements is not the normal way of doing business. Too bad, too, that a lot of employees have to move around to move up (sometimes because they're so good at what they're doing for you that you don't want to promote them). This job market seems to be giving us mirror-foggers at best, and our learning curve on hiring and keeping good people is certainly shortened.

Vic