A compensation program that is at least on par with other dealerships is a critical part of keeping committed, motivated employees — and attracting new ones. The 2018 Equipment Dealers Assn.’s (EDA) Compensation & Benefits Report can help you see how your programs compare.
“The survey is a tool like anything else. You need to have access to it to see if you’re out of line. It tells you how your dealership stacks up with others,” says Joe Dykes, EDA’s vice president of industry relations.
Included in the report are statistics on the compensation of key corporate and dealership staff, broken down by department. The report also includes an employee benefits section covering information on the average health plans offered as well as dental, insurance, and retirement plans.
Breaking Down the Data
The initial 2018 survey was sent out to 3,600 equipment dealerships in North America. In the end, 287 dealerships’ data was included, representing 1,101 dealership locations. A third-party company sends out the surveys and then calculates the results. A majority of the responses were from dealerships with an average volume of $10-50 million (48%). The other average volume categories were: less than $5 million (13%); $5-10 million (17%); $50-100 million (10%); and $100 million and up (14%).
In comparison to the 2016 edition, the overall content of the survey is the same, but some changes were made. The most notable change was in the revision of volume categories, which now includes $5 million and lower volume categories. This change was made per dealer requests. Other changes included re-wording some sections to make them clearer and removing repeated/similar questions.
When comparing the 2016 and 2018 reports, some numbers may seem quite different. For example, for the corporate CEO position, the commission based on profit decreased from 15% in 2016 to 5% in 2018. However, Dykes says the percentages and earnings tend to fluctuate for positions and these results are within the norm.
The 2018 report also had significantly fewer respondents — 354 compared with 434 dealers in 2016. “We had slightly lower numbers, but we feel we did get a representative sample of dealers,” says Dykes.
He says there are several factors related to the lowered responses. For instance, the sample size was smaller because EDA promoted the survey mainly to human resources departments to obtain accurate figures. Also, some of the respondents started, but did not complete the survey.
How to Best Use the Data
While the entire report is beneficial to dealers, Dykes says dealers should pay close attention to health insurance and flat rate guides. According to the report, 87% of dealerships say they provide health and dental plans to full-time employees and their families (spouse and children). That compares with 83% in 2016. Dykes expects that percentage to continue increasing. EDA announced recently announced a program to help dealers find the best health insurance options to help address this concern. (Click here to learn more.)
The number of dealerships that self-insure is up to 29% in 2018 from 15% in 2016 (73% said no and 12% said partially. The question was changed to a simple yes or no for the 2018 survey.)
Another topic Dykes advises dealers watch is flat rate pricing for service departments. Only 34% of dealers indicate that they are using flat rate pricing in their service departments. That compares with 40% in 2016. While the number could have dropped in 2018 due to lower responses, the larger issue according to Dykes is that the percentage is still below 50%. Dykes expects additional questions to be added about flat rating.
"In addition to the flat rate data, it would be more useful for dealers to review the extensive shop rate data in the service department section to ensure they are in line with other dealers. This includes the various technician pay rates, customer service rates, internal service rates, delivery rates, etc. in the various volume categories,” Dykes says.