4 Tips to Reduce Staff Turnover at Your Dealership

Employee morale and retention are critical issues in new-car dealerships. High turnover not only damages business performance but also results in significant financial costs. To mitigate these problems, dealership owners and managers must take steps to keep their teams engaged, motivated, and satisfied.

By leveraging technology, prioritizing benefits, and creating an enjoyable culture, you can build a stronger, more successful company that staff will want to stay with.

In a previous article, we discussed how to keep your team sharp and satisfied, where we explained how dealerships improve morale by:

1. Offering platform-specific onboarding and training
2. Training employees in soft skills
3. Hosting internal workshops led by team members
4. Creating a certification program to gamify employee development
5. Providing access to online learning programs

With that as a starting point, let’s explore what else you can do to retain staff — especially in the midst of current dealership staff shortages.

Leverage Technology for Employee Support and Engagement

Employee satisfaction comes partly from making work less tedious. Whether that’s improving service lane efficiency, its capacity, or making administrative tasks simpler, every step makes a difference.

Modern tech offers increasingly helpful solutions to support employees and keep them engaged. Digital assistants, for example, can help alleviate the workload and improve customer experience, leading to happier and more motivated employees.

By taking over tasks like setting service appointments and answering store hour questions, digital assistants allow employees to focus on more customer-oriented tasks — rather than getting bogged down by the busywork that often leads to burnout.

Moreover, the use of digital assistants creates a better working environment and improves job satisfaction by providing additional support. Employees no longer need to worry about issues like missing inbound calls while making outbound calls, since digital assistants can act as a safety net.

Similarly, providing a digital retailing option can help sales staff spend less time on each sale they make, and wasting less time on customers who aren’t actually ready to buy.

By incorporating technology into your dealership’s operations, you can create a more engaging, supportive, and efficient workplace. To really lay the groundwork for great satisfaction though, it helps to have great benefits and an enjoyable work environment.

Prioritize Benefits That Employees Care About

A strong benefits package is huge for employee engagement and retention. Offering comprehensive benefits such as good healthcare coverage, retirement programs, flexible hours, and continuous training can make a significant difference in your employees’ overall satisfaction.

For millennials in particular (who make up over 60% of dealership hires), a manageable work-life balance and competitive compensation are more enticing than traditional performance-based pay structures. With the current labor shortages, failing to offer an attractive deal here risks losing mechanics to other dealers and competitors.

Of course, sometimes not everything will be in your budget, so you need to ask yourself: what benefits can I provide my team that will set my dealership apart from competitors? You may want to discuss this with your staff and see what would make the biggest difference for them —the biggest benefits aren’t always financial.

By adapting to the changing times and offering flexibility, easy schedule alterations, and even telecommuting (at least for some roles, such as BDC employees), you can demonstrate your commitment to employees’ well-being.

Create an Enjoyable Work Environment

Empathetic leadership and an inclusive culture play a crucial role in employee engagement. There are countless ways to do this, but here are some places to start:

• Cultivate an open and transparent communication culture: encourage open dialogue and transparent communication by maintaining an open-door policy, holding regular meetings where staff can express concerns, and inviting feedback from employees (anonymous or otherwise). This approach fosters trust and collaboration within your team and makes employees feel valued. Address any workplace issues promptly and ensure that employees feel heard and supported.
• Recognize and celebrate successes: simple recognition for hard work or a job well done can go a long way. Acknowledge and reward individual and team achievements through public recognition, awards, or small tokens of appreciation. Celebrating successes can boost morale and create a sense of unity and pride within your team.
• Provide a clear path forward: nobody wants to feel like they’re stagnating. Providing no-cost training and outlining career progression tracks are essential to employee satisfaction. By supporting technicians and advisers in their growth, you can create a more positive workplace atmosphere, leading to higher retention rates.
• Offer better incentives to those who stay longer: whether someone doesn’t have much higher they can climb, or you just want to keep high-performing staff around, retention bonuses can be a big help. Sometimes this is a one-off bonus that grows with each additional year, or you may want to consider having preset salary increases that staff can look forward to as they stay at the company longer. Incentives like these should be clearly communicated from the start so they have something to work towards.

Sometimes however, creating an enjoyable work environment is less obvious.

Increase Customer Satisfaction

Where would you rather work: a dealership that the community loves and trusts, or one with a mixed reputation, where it’s not uncommon for customers to come in with accusatory tones and assumptions that you’re trying to rip them off?

Clearly, the second work environment sounds tense and uncomfortable — not somewhere you’d be excited to show up each day.

From the service team to the sales staff, dealerships have an especially hard time overcoming common stereotypes about their trustworthiness. That’s why we’ve written extensively about improving customer satisfaction at dealerships. Consider some of these tips to make your staff’s customer interactions more pleasant:

• Be proactive about addressing common service complaints
• Adopt customer satisfaction roadmaps or checklists, with a customer feedback loop to address common issues
• Improve your communication channels with customers to increase transparency, and improve the post-sale or post-service experience
• Offer prepaid maintenance plans in the service lane, so customers get discounts, and service staff can identify problems early, before they become expensive

This last point about offering prepaid maintenance in the service lane is a bit unknown to most dealerships, so we created a checklist for developing and selling one of these programs at your dealership. Download it today to learn more.