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Sewells best practise: Guide offers some good news at last

The 2005 RMI/Sewells Retail Motor Industry Pay Guide has just been published (see page 10 for full report), and there is good news on pay increases and staff turnover.

There is clear evidence that pay increases are coming under control, and the trend in staff turnover is down.

Staff pay and benefits account for over 70% of the gross profits generated by the average franchised dealer, so the magnitude of pay increases is a major issue. And pay increases have been like a runaway train since the retail motor industry started to gather momentum after the recession at the beginning of the 1990s.

The problem has been a shortage of quality, skilled staff.

As a result, wage increases escalated as retail motor businesses competed for staff in the labour market. But consecutive surveys have found that the gap between rewards and real pay increases is diminishing, and the 2005 Pay Guide confirms the slowdown.

The report also confirms a slight but continuing downward trend in staff turnover. Some effects of shortages are still apparent, notably franchised dealer service technician who enjoyed some of the largest increases of all.

However the 2005 Pay Guide survey discovered an increase in apprentices, which means the trade is responding to this problem.

Some wage inflation is a good sign and means business is prospering. But remember – pay too little and you will be unable to attract and retain the best staff; pay too much and you will adversely affect profits and become uncompetitive.

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