Dealership Wages Outpacing Private Sector, NADA Study Shows
Employees at new-car dealerships made, on average, $69,718 a year in 2015, a 1% increase compared to the year prior, according to the NADA’s 2016 Dealership Workforce Study. 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.
TYSONS, Va. — Employees at new-car dealerships made, on average, $69,718 a year in 2015, a 1% increase compared to 2014, according to the NADA’s 2016 Dealership Workforce Study (DWS).
The average weekly earnings for dealership personnel also grew, increasing by 1.4% to $1,341 in 2015. Additionally, the average gross profit per employee at a dealership rose to $8,446, a 0.4% gain compared to 2014.
Over a five-year period, average compensation across all dealership positions increased at an average annual rate of 3.2%, while median income growth of all positions grew at an average annual rate of 2.6%, according to the study.
“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 departments.”
The study found that a dealership employee working in the same position in 2014 and 2015 realized an average earnings growth rate of 6.3% year over year. 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.
The year-over-year earnings growth rates for all dealership positions, however, were higher than the average earnings growth rate for workers in the private sector, who saw an average earnings growth rate of 2.2% during the same time period.
The study also found that, for the first time in five years, total dealership employee turnover in 2015 was essentially unchanged from the year prior. In 2015, the dealership turnover rate was 39.6%, a 0.3% increase from 2014. This figure, the study noted, was still lower than the 46% turnover rate seen in the non-farm, private sector.
Out of the nine key positions measured in the survey — which included F&I mangers — sales consultants and service advisors had the highest turnover rates. The turnover rate for sales consultants at all new-car dealerships was 67% in 2015, a 5% improvement from the year before, while the turnover rate for service advisors in 2015 was 39%, a 2% improvement.
The study also noted that more dealerships are hiring younger employees, according to the study. “New-car dealerships are doing a better job of engaging and retaining Millennials. Sixty percent of all new hires in 2015 were Millennials, up from 57% the previous year,” Szakaly said. “… 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.”
In 2015, Millennials represented 42% of the total new-car dealership workforce, a 6% increase from the year before, and 8% higher than the 34% estimate of Millennials in the entire U.S. non-farm, private-sector, according to the study.
The hiring of women, however, remained stagnant, as women accounted for 20% of all new hires in 2015 — the same as the year before, according to the study.
The NADA's fifth annual DWS was conducted by ESI Trends. The research firm analyzed more than 385,000 payroll records from 1,956 new-car and –truck dealerships.
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