Auto Dealers Dogged by `Boys Club' Showrooms Costing Sales
Few hire women even as female buyers drive bulk of purchases.
(Bloomberg) -- Alana Barragan says she was so put off by the high-pressure sales pitch she encountered while car shopping at AutoNation Honda in Fremont, California, that she didn’t buy one. After discussing the experience with a manager, he spent the next hour trying to hire her.
Barragan now sells about 18 vehicles a month for the store and finds women are some of her best customers. But car shoppers are hard pressed to find many salesmen like her. Even as women make or influence the majority of auto purchases in the U.S., retailers have failed to attract and retain female employees, according to CDK Global, which advises dealerships on sales strategies.
“That’s one of the reasons I wanted to get into this,” Barragan said of joining AutoNation Honda in January. “I could be more open and honest to customers and give them an experience that I would want. The customers appreciate that.”
Women make up about 19 percent of U.S. dealership employees and most of those are support staff, according to the latest estimates from the National Automobile Dealers Association. The annual turnover rate for the few women who do sell cars is 88 percent, CDK says, meaning would-be buyers interested in negotiating with a female dealer may find themselves fresh out of luck.
“By dealerships not attracting and retaining women in the workforce, they are potentially missing out on a huge sales opportunity,” said Grace Wepler, senior market research analyst for CDK.
Low Recruitment
The lack of women on car dealers’ sales floors starts with lackluster hiring efforts. More than 60 percent of female dealership employees surveyed by CDK in May said their companies weren’t doing anything to help recruit more women.
When women do get recruited, many say they find dealerships still aren’t a welcoming place. More than half who CDK surveyed have been in their current position for six or more years, suggesting upward mobility is an obstacle. And 57 percent reported experiencing gender bias, like having to endure boorish, sexist banter.
“A lot of people are intimidated by the industry because it’s a male-dominated field,” said Barragan, 31, who previously sold appliances at Sears. “Initially the guys tried to say, ‘Oh, let me help you, let me do that for you.’ You just have to stand up to them and show them your confidence and say ‘I’ve got this.’”
Kathy Caron, general manager of Hopper Buick GMC Dealership in Ontario, Canada, described the industry as “a boys club” and said women don’t seek out jobs in dealerships because they’re intimidated by that fact.
“I’ve gone to big GM functions, and I always say you never have to wait in line for the women’s washroom,” said Caron, who was among the CDK survey participants.
Mentors, Advice
Sales roles in particular have a poor representation of women because of the long hours and lack of flexibility, said Judy Farcus Serra, chief financial officer of Headquarter Hyundai in Sanford, Florida.
“It’s a dog-eat-dog kind of setup, an every man for them self kind of environment on the sales floor,” said Serra, another CDK survey participant. Women need mentors to offer advice and support and few get such help, she said.
Women tend to get more support if they work in a dealership run by other women, with 63 percent saying the gender ratio in key positions was favorable at women-run dealerships compared with 29 percent in those run by men, CDK found. Women were also much less likely to be harassed, according to respondents.
General Motors Co. is trying to increase the number of women owning Chevrolet, Buick, GMC and Cadillac franchises from 243 stores, or 5.5 percent of its dealer network, said Jim Cain, a spokesman for the automaker. About 450 women have been named successors at existing dealerships and the largest U.S. automaker has an advocacy, mentoring and business development program as well as scholarships dedicated to these efforts, he said.
AutoNation, the largest dealer group in the country, has set goals to hire more women into general manager roles and at every other level of the company, said Andrea Schliessman, senior director of learning and development.
The share of women running AutoNation dealerships has increased to 7 percent this year from 4 percent in 2012, and the number of assistant service managers has more than doubled to exceed 300 in that time frame, said Dan Best, head of human resources for the Fort Lauderdale, Florida-based company.
Work-Life Balance
AutoNation also is rethinking compensation and schedules to help recruit more women. Rather than pay employees entirely on commission and sometimes require them to work seven days a week, they can now opt to receive about half their pay in salary and also work closer to a 40 hour week, according to Best.
Whether employees are compensated with partial salary or pure commission, total pay ranges from about $42,000 to $47,000 for a starting sales associate, and the more flexible schedule can be attractive to female candidates, Best said.
“Late last year we started looking at changing things that had been a barrier to women and other employees,” Schliessman said. So far this year, she said about 20 percent of new hires are women.
Barragan said she ultimately bought a used Honda Civic from another dealer the day she was turned off by the sales pitch at AutoNation Honda. She’s now one of four women at the dealership selling alongside about 25 men.
“I do feel that women are more comfortable working with a woman sales associate,” said Barragan, who eventually bought a new vehicle from her current employer. “They can feel like there’s a little more trust, maybe, that we’re not trying to just push something on them. Even as a customer myself, I felt that way, too. I didn’t want someone pushing something on me.”
To contact the reporters on this story: Claire Ballentine in Southfield at cballentine@bloomberg.net, Jeff Green in Southfield, Michigan at jgreen16@bloomberg.net.
To contact the editors responsible for this story: Craig Trudell at ctrudell1@bloomberg.net, Janet Paskin at jpaskin@bloomberg.net, David Welch