Car dealers that fail to treat their sales staff properly – by withholding bonuses or not paying commission under furlough – face ‘a mass exodus of staff’.
Car Dealer Magazine has been inundated with calls and messages from sales staff who have not been paid properly under the furlough scheme.
One told us he was missing £10,000 worth of new car bonuses for the first quarter for cars he had sold before the lockdown.
As many car salespeople get their pay packets this week, a large majority are finding out they have not been paid what they are due.
Several dealerships are withholding commissions earned in March, while staff were still working full time, and not paying sales staff what they are due in full.
Cash flow remains tight for many car dealerships, however several dealer group bosses Car Dealer Magazine has spoken to have branded the moves ‘disgusting’.
Now, recruitment companies are warning that dealers that treat their staff poorly through this crisis face mass walkouts.
Sharon Spall, director of WeRecruit Auto, said they had already seen a spike in disgruntled sales people registering with the agency.
She said: ‘Since the lockdown, we’ve had an influx of candidates register with us. While to an extent this can be expected as they are at home and therefore updating their CVs, we expect that how they feel their employers have looked after them during this uncertain period will have a big impact on what happens when dealers are back in full swing.
‘A lot of people have had difficulties with pay or getting onto furlough schemes – particularly if they had just changed jobs – and will therefore be looking to move.’
Spall added that the flip side of this was she had also heard from sales staff who have been treated so well by their employers that they were now planning on staying put.
She added: ‘Those who may have been considering a move prior to lockdown, having been particularly well looked after and felt highly valued, are more likely to return the loyalty and stay put.’
Sean Kelly, managing director of BMW and Mini group Vines, told Car Dealer Live on Monday that he believes karma will come back to haunt dealers who treat their staff poorly.
He said they’ve paid all salesman what they were due and have included commissions in their furlough payment calculations.
He said: ‘I’m a great believer in karma. I’m not a religious man but I do think you get back what you give out, and I think those businesses that have done the right thing will buy them massive loyalty and support from their staff.
‘I think equally, on the flip side, where dealers have shown not to do that, that’s when you’ll get lots of people with employment tribunal claims against these employers.
‘I think there’s going to be a lot of disgruntled employees probably now and when the businesses reopen, and disgruntled employees normally vote with their feet.’
Several dealer groups have refused to include commissions when calculating furlough payments, despite government advice that they can be included.
Several dealers are claiming that because sales peoples’ contracts describe commission as ‘discretionary’ they can’t be included in furlough calculations, however experts Car Dealer have spoken to have argued that despite this they should be paid.
Sadly, there is little salespeople can do if their employer has decided not to include commissions in furlough pay now – instead they will have to take their cases to an employment tribunal afterwards.
One accountant told Car Dealer Magazine: ‘Sales people are in a tricky situation because if they push too hard they could lose their jobs, or they could push the dealer group under because of cash flow – then they won’t have a job to come back to.’