Building career paths for dealership employees: The key to retention and succession planning
Building career paths for dealership employees: The key to retention and succession planning
Building career paths for dealership employees is the key to tackling two critical workforce challenges: high turnover and looming retirements.
Without clear career direction, employees — especially younger generations — often lose motivation and seek opportunities elsewhere. Developing structured career roadmaps can help dealerships retain talent, reduce turnover, and prepare for seamless transitions when senior employees retire.
Discover how career pathing can benefit your dealership and keep your team thriving for the long term.
Picture this: a bright, motivated Gen Z employee joins your dealership, full of energy and eager to make their mark. But less than a year later, they’re handing in their notice, frustrated by the lack of career direction.
It’s a story that plays out all too often in dealerships across Canada, where turnover is high. And for your dealership’s more experienced workers there’s another ticking clock: the approaching wave of retirements.
In both cases, the solution is the same — clear, structured career paths. For dealerships, developing career advancement roadmaps addresses two critical challenges: keeping the next generation of employees engaged and ensuring a smooth transition as your experienced team members retire.
Why are career paths important?
Let’s face it — turnover is a challenge in the dealership world, especially among Gen Z workers. As per the Canadian Automobile Dealers Association’s (CADA) 2024 National Workforce Study, the current employee turnover rate is about 31 percent, with younger generations leading the way out the door.
Why? The report boils it down to three factors: commission-based pay, long hours, and a lack of clear career path. Without a sense of progression, employees lose motivation and start looking elsewhere. Gen Z and Millennials in particular, who make up a significant portion of the dealership workforce, are looking for more than just a paycheque. They want to know how they can grow, develop new skills, and advance within the organization. Offering a clear path forward can turn a disengaged worker into a loyal, long-term asset.
So, why should you invest time and resources into developing career paths? For starters, it’s a solution to one of the most common reasons why employees leave. When you offer growth opportunities, mentorship, and structured training, you show your employees that you’re committed to their future.
Here are just a few of the ways defining career paths can benefit your dealership:
Lower turnover rates: Employees who can clearly see their future within your dealership are more likely to stay long term. This reduces the cost of recruitment and training new hires.
Improved succession planning: A defined career path that allows for cross-training and lateral movement helps employees build versatile skills. This ensures you’ll have a pool of trained, knowledgeable workers ready to fill critical roles when senior staff retires.
Boosted morale and engagement: Employees who feel valued and see a clear path to advancement can be more engaged and productive. In turn, this can lead to better customer service and higher overall performance.
A key to long-term retention
In today’s labour market, dealerships can retain more employees by offering clear career growth opportunities. The CADA report revealed that the average tenure for all employees is just 3.3 years. By creating structured career paths and opportunities for upskilling for service technicians, advisors, and sales consultants, dealerships can incentivize longer tenure and increase employee engagement.
When employees can see a future with your dealership — whether it’s through advancement to a higher-level role or lateral moves that expand their skills — they’re more likely to stay. Clear career development pathways show your commitment to their growth and help build a loyal, motivated workforce.
By focusing on career development and creating well-defined advancement paths, dealerships can decrease turnover, enhance employee satisfaction, and build a strong talent pipeline for the future.
Preparing for retirements: A plan for the future
On the flip side, many dealerships are also grappling with another workforce challenge: succession planning.
Unlike turnover, retirements are predictable. But they still require careful planning. If you know key employees are leaving in the next few years, the time to start planning their replacements is now.
Succession planning sounds daunting, but it doesn’t have to be. It starts with identifying critical roles within your organization — like senior service technicians or sales managers — and creating a plan to capture and share knowledge and develop internal talent to fill these roles.
Be it through mentorship or training opportunities, your dealership needs to make sure the next generation of workers is ready to step up when the time comes.
How to get started
If you’re thinking about formalizing career roadmaps in your dealership, the good news is that it doesn’t have to be a massive overhaul. You can start small and scale up. Here are a few practical steps to help get you going:
- Conduct stay interviews: Start by having conversations with your existing employees to understand what’s working and what’s not. These stay interviews are a great way to gather feedback on how employees feel about their career, their goals, and what improvements they’d like to see.
- Offer mentorship programs: Pair experienced employees with newer hires to help guide them through their career development. Mentorship is a low-cost but effective way to transfer knowledge and build strong relationships within your team.
- Outline career paths: Map out potential growth opportunities for each role within your dealership. Whether it’s a vertical transition, or a lateral transition like a customer service agent moving to a sales consultant position, having a defined path gives employees something to work toward.
- Focus on high-turnover roles first: Start by focusing on the roles where turnover is the highest, like service advisors and sales consultants. By offering a career roadmap in these areas, you can begin reducing turnover while testing your approach before rolling it out more broadly.
A roadmap to retention and succession success
Building career paths in your dealership is not just about keeping employees around longer — it’s about creating a thriving, engaged workforce that grows with your business.
By offering clear opportunities for growth, you’ll not only reduce turnover but also make sure that when your workers retire, you have a prepared team ready to step up. The key is to start now, be proactive, and create a plan that work for your dealership’s unique needs.
Ready to build a career growth pathway?
Our team at MNP has extensive experience helping dealerships build personalized career development plans that work. Contact us today for a free consultation to explore how we can help you retain top talent and prepare for the future.
To learn more, please contact Chris Schaufele, National Leader, Dealerships.
Chris Schaufele CPA, CA
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