Employee retention efforts matter the most in the first 90 days of employment, according to a report by human resources and compliance company HR4.

The auto dealership workforce study found that nearly 28% of employee exits occur within the first three months of employment, making early intervention vital. Sales departments in particular have the highest rate of annualized turnover at 126%, but parts and service departments follow closely behind at 88%.

According to the report, high turnover rates cost dealerships money. Depending on the complexity of the role, estimated turnover costs can be 50% to 200% of an employee's average annual salary. Just a 10% to 15% reduction in turnover can save a dealership between $400,000 to $600,00 annually.

To help retain employees, HR4 recommends structured check-ins at 30, 60 and 90 days to catch disengagement early. And with 66% of turnover voluntary it said that tracking exit reasons can help a dealership understand why it happens and help prevent future departures.

The report also covered hiring and onboarding challenges dealerships face, finding that dealerships that hire faster don’t necessarily have better retention rates. They also have a higher chance of turnover when they have low onboarding completion rates.

Warning signs to watch for with onboarding include tasks being incomplete after one week, no manager check-ins by 30 days, failure to start training modules, and onboarding dragging past 30 days.

HR4 recommends contacting applicants within 24 hours and prioritizing the right candidates over rushing to fill a role. Tracking the hiring funnel to see where candidates drop off and tracking onboarding completion rates are also recommended.