In the ever-evolving world of automotive retail, adaptability and foresight are key to ensuring long-term success. One pressing challenge that dealerships face is attrition, with the latest Motor Salary Survey revealing an average staff turnover rate of 31%. However, the good news is that there are ways to mitigate this issue and future-proof your business. In this blog post, we’ll explore how you can achieve this by taking strategic steps to address employee turnover and plan for the skills your dealership will need in the future.
Understanding the Attrition Challenge
The Motor Salary Survey conducted by BDO highlights that the automotive industry has seen an average salary increase of 7% in the past year, which is consistent with the UK average. However, this rate is notably less than the 16% increase experienced in the previous year, reflecting the post-Covid surge in profits.
The survey also points out that the highest salary increases occurred in the parts, service, and administration departments, with pay rising by 8-9%. In contrast, vehicle sales departments saw a 4% increase, following a substantial 14% rise in the prior year. Notably, service technicians are in high demand, with their salaries increasing by an impressive 13% on average due to a skills shortage.
The challenge of attrition comes at a significant cost for dealerships, including recruitment expenses, time invested in training new hires, and increased wage pressure as they compete for top talent. The survey reports that, on average, it represents a loss of 7-8,000 people in the last 12 months for dealerships participating in the survey.
Strategies to Reduce Attrition
To future-proof your dealership and reduce attrition, consider implementing the following strategies:
1. Employee Development Programs
Invest in employee development programs to enhance skills and boost job satisfaction. Offering opportunities for career growth and skill development can make your dealership a more attractive place to work.
2. Competitive Compensation
Stay competitive in terms of compensation packages to attract and retain top talent. Keep an eye on industry salary trends to ensure your offers are competitive.
3. Flexible Work Arrangements
Consider offering flexible work arrangements, such as remote work options or flexible hours, to accommodate the changing needs of your workforce.
4. Focus on Employee Well-being
Prioritize the well-being of your employees by offering wellness programs, mental health support, and a healthy work-life balance.
5. Succession Planning
Develop a robust succession plan to identify and groom future leaders within your organization. This ensures a smooth transition when key personnel retire or move on.
Preparing for the Future
In addition to addressing attrition, it’s crucial to plan for the skills your dealership will need in the future. With the introduction of agency models and the ongoing shift to electric vehicles, the automotive landscape is changing rapidly. Here are some steps to help future-proof your business:
1. Assess Future Skill Requirements
Identify the skills that will be in demand as your dealership evolves. This might include electric vehicle expertise, digital marketing skills, and data analytics capabilities.
2. Offer Training and Upskilling
Invest in training and upskilling programs to ensure that your existing workforce is equipped with the skills needed for the future. Consider partnering with educational institutions or industry experts to provide specialized training.
3. Embrace Technological Advancements
Stay abreast of technological advancements in the automotive industry, including electric and autonomous vehicles. Adopting these technologies early can give your dealership a competitive edge.
4. Diversify Your Services
Explore opportunities to diversify your dealership’s services, such as offering electric vehicle charging stations, vehicle subscription services, or digital showroom experiences.
In conclusion, addressing attrition and future-proofing your dealership go hand in hand. By implementing strategies to reduce turnover and preparing for the skills and technologies of tomorrow, your dealership can remain agile and competitive in a rapidly changing industry. The automotive world is evolving, and those who plan accordingly will be best positioned for long-term success.