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Training Investment: Money Down the Drain

Welcome back to part two of our series on the true costs of employee turnover in the retail automotive industry. In our previous installment, we explored "Recruitment Expenses." Now, we shift gears to delve into the significant impact of "Training Investment."

Training Investment: Dollars Down the Drain

When a new hire joins your dealership, they don't magically become a productive and knowledgeable team member overnight. It's the training and development process that transforms them into valuable assets. However, when employees leave prematurely, your training investment can feel like money going down the drain, adding additional costs to the incoming hire.

As with the previous article, we base our discussion on the 2022 NADA Workforce Study. In this article, we focus on Sales Consultants and B-Techs, using Median Averages as a more accurate representation of the industry's reality.

For Sales Consultants:

  • Median average income: $97,670 (an increase of 37% over 2021)

  • Annual turnover: 46%

  • Average tenure rate: 2.2 years

For B-Techs:

  • Median average income: $64,580 (an increase of 8% over 2021)

  • Annual turnover: 28%

  • Average tenure rate: 3.7 years

The Cost Implications

The all-encompassing cost to replace Sales Consultants and B-Techs amounts to $114,774.62 and $131,368.75, respectively. When we break these figures down to the average training portion of the position, it averages $9,349.36 for Sales and $6,085.70 for B-Techs. These numbers do not account for additional training outside the dealership, only considering an average of 15 minutes of mentoring a day from a more experienced colleague.

Now, let's multiply these training costs by the number of employees in these roles and consider the potential in-house training expenses. For instance, if you employ 10 Sales Consultants and 8 B-Techs, the costs of recruitment alone would be $56,709.03 or nearly $5,000 per month, often invisible to the bottom line.

Breaking Down the Potential Costs

  1. On-the-Job Training: The time spent by experienced employees and trainers to educate new hires is a valuable resource, including formal training sessions and informal mentorship.

  2. Materials and Resources: Training often involves resources such as manuals, videos, software, and tools. These materials incur costs that are lost when an employee departs.

  3. Reduced Productivity: As new employees go through their learning curve, a temporary dip in productivity is common. This affects sales, customer service, and overall performance, directly impacting your bottom line.

  4. Training Facilities: Some dealerships have dedicated training spaces with associated maintenance and utility costs, wasted when turnover leads to underutilization.

  5. Certifications and Licensing: Many automotive roles require certifications or licenses. Your investment in getting employees certified is lost when they leave before contributing to your business.

Moreover, consider the long-term training investment. As employees become more experienced, their training leads to increased productivity, efficiency, and customer satisfaction. When they leave, not only is their training cost lost, but the potential benefits of their improved performance are also gone.

Strategies for Maximizing Training Investment in the Automotive Retail Industry

Here are four effective strategies to retain staff and maximize your training


  1. Foster a Supportive Work Environment: Create a workplace where employees feel valued and supported, encouraging open communication and positive culture.

  2. Offer Growth Opportunities: Develop clear growth trajectories within your organization and provide opportunities for skill development to keep employees engaged.

  3. Mentorship Programs: Implement structured mentorship programs to help new hires adapt quickly and feel more connected to the team.

  4. Performance-Based Incentives: Reward employees for loyalty and excellent performance with incentive programs that motivate staff to stay and excel.

The goal is to make your training investment go further and increase the ROI on your workforce. By addressing these issues head-on, we can pave the way for a more prosperous future in the automotive retail industry.

Share your thoughts and experiences with training investments and their challenges in the comments below. Together, we can uncover solutions to mitigate turnover and enhance our industry.

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