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What Does It Take to Be One of the Top 100 Best Dealerships to Work For? It’s All About the Numbers.

Written by Ted Kraybill | May 31, 2023 1:00:00 PM

It’s a question that I’ve gotten more than a handful of times...dealers will ask me, “Ted, how do I become a top 100 best dealership to work for?” And I respond with something to the effect of, “it’s all about the numbers.” Powered by ESi-Q, we surveyed roughly 60 dealerships who were ranked among the top 100 best dealerships to work for in 2022 and when we looked at those survey results vs. the industry averages, the advantage that those top 100 best dealerships have is evident and far beyond the industry averages. 

Looking at the numbers, when you ask how often employees in a dealership recommend their sales department for someone looking to buy a car, the best dealerships have a 20-point advantage over the industry average. When asked about recommending their service department, there’s a 21-point advantage. When asked if they would recommend their dealership as a great place to work, the number is even higher at a 22-point advantage (for dealerships where we have employee survey data). 

As for workforce metrics, annual turnover averages 19% for the best dealerships (based on payroll data these dealerships submitted for the NADA Dealership Workforce Study). That’s a 15-point advantage over industry averages which can equate to an additional $600 – $700 in monthly gross profit per employee. This can mean an additional $500,000 – $650,000 in annual gross profit compared to average dealerships (for typical dealerships with 75-80 employees). 

3-year retention is 50% for the industry, which means that half of all dealership employees don’t make it to their 3-year work anniversary. For the top 100 best dealerships to work for, the 3-year retention rate is 67%, or a 17-point advantage over the industry average. A 17-point advantage in 3-year retention can be about a $1,000,000 in annual gross profit for the same typical dealership with 75-80 employees. The advantages of being the best and making the top 100 list will not only help you attract and recruit employees, but it's also a big financial advantage. The investments these dealers make in employee engagement and retention have an exceedingly high ROI! 

How do you become the best dealership to work for? 

So how do you become the best? Start by asking your employees what they want. When we look at ESi-Q-powered survey results for what employees want, these things have not changed much over the last 5 years.  

  • Fair and competitive pay and benefits: Competitive pay and benefits that reflect your local labor market should be obvious, but fairness is one aspect that many dealers often overlook. Perceived favoritism and not making bonuses due to factors outside the employees' control can contribute to employee happiness (or unhappiness, in this case). 
  • Positive workplace culture: feeling valued, recognized and a sense of belonging. These matter to all employees, regardless of generation, though they are particularly important to the younger generations. 
  • Learning and development opportunities – a career path: Is someone taking an interest in helping me improve my skills, improve my income, etc. They want someone to care about them and help them get better at whatever job they have at the dealership. 
  • Good work-life balance and personal well-being: This has been important for many years, but it has gone up in importance over the past few years with younger employees. Many employees want the company and their managers to take a personal interest in them and provide them with support to obtain and maintain a healthy and positive lifestyle.
  • Managers who are honest, trustworthy, caring, listening, and open to suggestions: Employees want to feel included in decisions and discussions about how we can do things better and differently. They want managers to listen to their ideas and hopefully put some of those ideas into action.
  • Clear direction and a sense of meaning and purpose: The direction can come from the top or from managers, but the sense of meaning and purpose is something employees must connect with on a personal basis. 

Based on what we see in the annual NADA Dealership Workforce Study data, more dealerships are paying closer attention to these soft benefits than they have in the last 5 years. This makes us very hopeful that we are starting to see some real progress being made on employee retention, engagement, and overall happiness. 

We are passionate about attracting and retaining dealership employees. Contact us to chat more about this!