Why Dealerships Struggle to Keep Millennial Workers

October 5, 2018 / Dealership / 0 Comments /
Office workers in a modern lobby, group portrait

Every couple of decades, a new generation enters the workforce, bringing with it a new set of values, expectations, and beliefs. This shaking-up of the workplace is integral to bringing fresh insight and new ideas, but it can also lead to problems in employee satisfaction if not managed correctly.

The Turnover Conundrum

According to a recent article by the Wall Street Journal, nearly 60 percent of dealership hires in the past year are millennials. Out of that, more than half of them turn over annually.

It doesn’t take an HR genius to know that turnover is costly for your dealership and bad for employee morale. On top of the personnel issues it creates, high turnover will impact a dealership’s quality of service to its customers.

Given that most cars now feature a high level of technology, it requires more skill and knowledge to sell this type of product. If employees aren’t sticking around long enough to become adequately trained in vehicle specifics, it puts the sales staff at a disadvantage when negotiating with customers who often come in with a good deal of vehicle knowledge themselves. The internet makes it possible to learn virtually all there is to know about a vehicle, so if staff aren’t experts in what they’re selling, they will lose credibility fast.

The same WSJ article featured an interview with a senior manager at Nissan’s dealer training group. In the interview, the manager revealed that last year Nissan experienced a 100 percent turnover rate at its dealerships. This means that some positions turned over more than once during the year.

To understand what is causing these retention issues, we have to examine the new workforce and what they expect in the workplace.

Holding On To Millennials

A person’s actions and attitudes are guided by their values. That is why it’s essential to understand the values and expectations of the incoming workforce.

In general, millennial workers are put off by the stereotypes car dealers have had in the past. Haggling, bait-and-switch, and “boys’ club” atmospheres are practices that many young workers find unappealing. While these practices are not present at every dealership, it’s worth investigating your current work climate to see if it could be contributing to a retention problem.

Pay is another factor affecting retention. As many millennials are burdened with student loans and other forms of debt, having a consistent paycheck is more important to this generation than ever. Some dealerships have combatted the natural ups and downs of commission-based pay by switching to salary pay, or by offering a flat rate per vehicle sold versus a percentage of gross profit. Another option is to provide bonuses for hitting certain sales goals, as well as perks like full insurance coverage or more flexible hours.

But the problem doesn’t end with employees. As millennials’ purchasing power increases, they will become dealerships’ primary target customers. As a generation that is accustomed to purchasing everything from socks to mattresses via Amazon, millennials will expect a car-buying process that is just as seamless. This is where dealerships have the opportunity to get ahead by offering a superior service that people prefer and look forward to, rather than resorting to online or third-party alternatives.

 


About the author

John Paul Strong: As owner and CEO of Strong Automotive Merchandising, John Paul Strong brings more than two decades of advertising experience to the table. He is the author of Next Day Traffic and leader of 100+ employees servicing more than 230 clients across the country. In 2018, John Paul was listed in the Birmingham Business Journal's Top CEO Awards and 2013's Top 40 Under 40.


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