“It really, I think, forced more innovation, more calls or Facebook Marketplace searches,” Manzi said. “Dealers really need to get creative with how they source right now.”
Dealerships are also selling more efficiently with fewer employees, Manzi said. The number of dealers fell slightly in 2021 after falling more sharply in 2020 when the pandemic began. Total dealership employment fell 2.1% to about 1,055,400 people last year, from 1,078,000 for 2020 and 1,134,400 for 2019, according to Bureau of Labor Statistics data cited by the NADA.
The average dealership had 63 employees in 2021, generally flat from 64 in 2020, but down more significantly from 68 in 2019. The average number of new vehicles sold per dealer last year fell to 113 from 104 in 2019 and 2020, Manzi said.
“We still haven’t seen dealership employment nationally fully recover,” he said. “A lot of sales people have learned to be a little more productive. I think moving more of the sales process online could have helped with that.”
Manzi said he doesn’t expect dealership employment to pick up until sales rates are consistently closer to 17 million vehicles a year.
Payroll costs increased significantly last year, according to the NADA report. Average annual payroll per dealership jumped 22% to $4.95 million in 2021, from $4.06 million in 2020 and $4.09 million in 2019, according to the report.
Manzi attributed the increase largely to the tight labor market.
“It’s just more expensive to pay people right now,” he said. “Dealers also have to stay competitive. And so they have to pay more to have good people.”