Why Employee Turnover Can Be Good for Your Dealership

By Beth Kempton,
May 18, 2017

A low employee turnover rate is often considered a sign of a successful business and strong management. But if it means low-performing employees are sticking around your dealership, a lack of turnover can do more harm than good – and cause your profits to take a hit.

Rather than focusing on complete employee retention, your dealership should have a purposeful turnover strategy to replace employees who aren’t meeting your expectations. Not sure where to start? Here are some key benefits of practicing purposeful turnover at your dealership:

Increase Sales

By only keeping employees who meet their monthly goals, you can ensure your dealership remains profitable and continues to grow. This is more important now than ever, as many dealerships are moving to base plus bonus pay plans, rather than commission-based pay plans, and you don’t want an employee who isn’t moving inventory to make a comparable salary to a 12-car-a-month employee. Setting clear goals and holding team members accountable can help keep your business moving forward.One way to practice purposeful turnover is by setting a minimum number of cars each salesperson needs to move per month. Set clear expectations from day one and provide the tools and training your sales team – and other employees – need to be successful in their roles. If a salesperson doesn’t meet the expectations and goals, such as moving at least 10 cars several months in a row, for example, it’s a sign they are becoming disengaged and you should consider letting the employee go.


Improve Customer Service

On both the sales and service side, satisfactory customer service is vital to your dealership. Customer service strongly influences customer’s decision to buy a car from your dealership and whether or not they choose to service the car with you after the purchase. The customer experience also impacts online reviews. Automotive News highlighted a Subaru general manager who joined a dealership in October 2012 and noticed the dealership had poor online ratings. By 2016, he significantly improved the online ratings by either reforming or firing staff who weren’t meeting customer satisfaction expectations. By only keeping your best employees on staff, you can improve customer service, which will help your dealership attract both returning and new customers.

Focus on Star Employees

While purposeful turnover can help you increase sales and improve customer service, another way to help your dealership thrive is by elevating your star employees, also known as intentional retention. Part of your business strategy should always be identifying your top employees and ensuring they’re in the right place to move your business forward. In some cases, the right place might be the employee’s current role – such as a strong sales team member staying in sales. In others, the employee might be even more valuable to your business by moving to a different location, or moving to a position of influence, such as a team lead or corporate trainer. No matter where you move a star employee, always remember to backfill the role so productivity isn’t lost after the transition.

Your people are your strongest competitive advantage, and by having a strategy in place to purposefully turnover bad hires and retain your best employees, you can ensure your dealership stays profitable over time.

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About the Author

Beth is the content strategist on Hireology’s marketing team, responsible for creating compelling blog posts, eBooks, marketing materials and other content. Her background includes five years of experience at a B2B digital marketing agency, where she crafted content for a variety of clients, including several in the HR technology space. Before beginning her career, Beth attended Loyola University Chicago, where she studied advertising and public relations.

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