7 Reasons Your Best Salespeople Keep Leaving (And How to Stop the Bleeding)
The average dealership turnover rate is 80%.
Let that sink in. In most other industries, the average is 13.5%. A healthy turnover rate is under 10%.
This isn’t a labor market problem. This is a leadership problem. And it’s costing you roughly $100,000 every time a trained salesperson walks out the door. It seems like a crazy number, however, between recruiting, training, lost productivity, and missed sales during the ramp-up period of six months to a year.
Let’s do the math. An average salesperson still sells about 8-10 units per month and a new-hire is around 3-5. That's a difference 5 units. An average front and back end of a deal is $3,500 or more, but we’ll keep it light. That’s a loss of $17,500 per month. You still with me? Now times that number by 6 months, that’s how long it takes for a new hire to churn on average, and you start that process over again. That’s $105,000. Notice I didn’t say anything about the trades you’re never going to get, or service work that’s never going to get done. We’re also not getting a returning customer or their referrals. And just to add a little more salt to the wound, who do you think is burning through the customers, it’s not your veterans.
Here are the 7 real reasons your best people keep leaving, and what to do about each one.
Reason 1: You’re Hiring for Skills, Not Mindset
Most dealerships hire based on experience and interview performance. The problem? You’re often hiring “Drifters,” people who float from job to job without clear Purpose, reacting to circumstances instead of creating them.
Only about 3% of people are “Pure Non-Drifters,” purpose-driven individuals who take ownership and deliver consistent effort. If you’re hiring randomly, you’re hiring Drifters. And Drifters drift away.
The Fix: Screen for mindset in your interviews. Ask candidates about their goals, their definition of success, and how they’ve handled adversity. Listen for ownership language (“I chose to…” “I decided to…”) versus victim language (“They made me…” “I had no choice…”).
Reason 2: Your Purpose Isn’t Clear Enough to Inspire Loyalty
People don’t leave jobs, they leave leaders or the environments that don’t fulfill them. If your dealership’s Purpose is just “sell cars and make money,” you’re competing on compensation alone. And there’s always someone willing to pay more.
The Fix: Define a themed Purpose that gives meaning to the work. When employees feel they’re building something meaningful, not just processing transactions, they stay.
Reason 3: New Hires Are Thrown Into the Deep End
The average new car salesperson takes 6-12 months to become productive, if they last that long. Most don’t. You’re paying for months of training and loss of productivity and losing them before you see a return.
The Fix: Create a structured 30/60/90 day onboarding program with clear milestones, assigned mentors, and regular check-ins. Celebrate small wins early to build confidence and Positive-State-of-Mind.
Reason 4: Recognition Is Inconsistent or Non-Existent
Top performers need to feel valued. When recognition only happens at the annual awards dinner, or worse, when it doesn’t happen at all, your best people start wondering if anyone notices their effort. You can only imagine what your mediocre performers are noticing.
The Fix: Build recognition into your daily and weekly rhythms. Call out wins in morning meetings. Send personal notes. Make recognition specific (“Great job handling that difficult customer yesterday”) rather than generic (“Good work this month”). Add a non-monitory reward structure into your pay plan. “You graduated from training and you hit your goal; you and your spouse are going to dinner with the General Manager” Or “you are in the 20% of the sales department, you get to choose your schedule”
Reason 5: There’s No Leadership Bench - No Growth Path Visible
Ambitious salespeople want to know where they’re headed. If they can’t see a path from salesperson to desk manager to sales manager to GM, they’ll find a dealership where they can.
The Fix: Create visible development paths and talk about them openly. Identify high-potential employees early and invest in their growth. Promote from within as the default, not the exception.
Reason 6: The Brain Model Isn’t Aligned
If your dealership culture runs on fear, fear of missing numbers, fear of the desk, fear of management, you’re operating in a Negative-State-of-Mind environment. That’s exhausting. And exhausted people leave.
The Fix: Shift from fear-based management to purpose-based leadership. Hold people accountable, but do it from a place of belief in their potential, not criticism of their shortcomings.
Reason 7: Compensation Is Competitive, But Culture Isn’t
You might be paying market rate or better. But if your top salesperson can make the same money somewhere with better hours, better management, or a more supportive environment, they will.
The Fix: Audit your culture honestly. Survey your team anonymously. Ask departing employees for real feedback. Then fix what you learn.
A Dealership That Stopped the Bleeding
Murdock Auto Group grew from 1 store to 9 rooftops and 10 brands represented. That kind of growth requires people, lots of them. But they didn’t just hire bodies. They built a Specialized Talent Team using the Live Ready® framework.
At one of their flagship stores, they started selling 40 units per month and grew to over 400 units per month. That growth was only possible because they retained and developed their people instead of constantly replacing them.
The Bottom Line
You don’t have a recruiting problem. You have a retention problem disguised as a recruiting problem. Fix retention, and recruiting gets easier, because great people want to work at places where other great people stay.
Our “Catch and Don’t Release” Master Class series provides the blueprint for building a team that stays. You’ll learn how to identify Pure Non-Drifters, structure development paths, and create a culture that retains your best performers. Register for the next session.