Dealerships don’t have a CSI problem.
They have an employee problem—and the numbers prove it.
Automotive retail loses an estimated $20 billion every year1 to employee turnover. Not because the problem is unsolvable, but because it’s been normalized. While dealers obsess over customer satisfaction scores, they accept 42% annual turnover2 as “just how the industry works.”
It doesn’t.
The dealerships winning in today’s market—on CSI, profitability, and growth—have figured out something the rest of the industry still ignores:
You cannot generate consistently happy customers with a revolving door of disengaged employees.
Over the course of this 14-part series, I dig into what separates the dealers who’ve cracked this code from those still hemorrhaging talent and wondering why their CSI scores won’t stabilize.
We explore:
What’s actually working inside high-retention dealerships
Why impressive programs often fail to produce engagement
How leadership behavior—not policy—drives turnover
Why compensation alone doesn’t solve retention
How generational shifts are reshaping workforce expectations
What workforce instability means for OEM execution
And why measurement is the dividing line between intent and results
Most importantly, we focus on measurement.
The dealers winning this battle aren’t guessing about what their people need. They’re measuring employee experience, analyzing trends, and responding to what the data tells them—before frustration turns into resignation.
The $20 Billion Employee Turnover Crisis in Automotive Retail Nobody Wants to Solve
The true cost of dealership turnover, and why ignoring it destabilizes customer experience and profitability.
High turnover is not inevitable.
Culture can scale.
CSI stability starts inside the dealership.
The $20 billion problem persists not because it’s unsolvable—but because too many organizations don’t measure it, and therefore never manage it.
This series is about changing that.
Because once you understand the employee–customer–profit connection in your own data, the path forward becomes much harder to ignore.
This series is written by Cathy Palochko, an automotive learning and development leader with decades of experience across dealer groups, OEMs, and industry research. Her work focuses on helping dealerships understand—and act on—the connection between employee experience and business performance.
What is the employee-customer-profit connection in automotive retail?
The employee-customer-profit connection describes the direct relationship between employee experience, customer satisfaction, and dealership financial performance. Dealerships with engaged, stable teams deliver more consistent service, build stronger customer relationships, and achieve better CSI and profitability than stores with high turnover.
Why is employee turnover so high at car dealerships?
Automotive retail averages approximately 42% annual employee turnover due to commission-heavy compensation models, demanding schedules, limited career pathways, sink-or-swim training approaches, and an industry culture that has historically accepted turnover as inevitable rather than solvable.
Why don’t most dealerships measure employee engagement?
Unlike CSI, employee engagement is not required or incentivized by OEM programs. As a result, many dealerships rely on assumptions rather than data, discovering retention problems only after employees resign instead of identifying early warning signs.
How does employee experience impact dealership profitability?
Employee experience affects profitability through reduced turnover costs, stronger customer loyalty, higher fixed-ops efficiency, improved sales performance, and lower management distraction. Stable teams protect institutional knowledge and drive repeat business.
What is the goal of the Employee-Customer-Profit Connection series?
The goal of this series is to show how dealership workforce stability directly impacts customer outcomes and financial results, using industry data, real dealership examples, and proven retention strategies that move beyond traditional thinking.
¹ Based on 2025 NADA Dealership Workforce Study data: 16,500 U.S. franchised dealerships × 64 average employees × 42% turnover rate × $49,323 replacement cost per employee (50% of $98,645 average annual earnings, per SHRM and Gallup benchmarks estimating replacement costs at 50-200% of salary).
² 2025 NADA Dealership Workforce Study.