Service Department Salaries Across the U.S.

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Service managers earn $48K or more a year, on average, nationwide

Service salaries manager department compensation

Service managers at dealerships across the country make an average of $48,450 per year and are eligible for roughly $8,500 in bonus compensation or commissions, according to a Dealernews 2008 survey of dealerships in the United States.

Managers can expect to make the most in the U.S. Southwest, where dealers pay their service department heads an average of $51,136 plus bonus/commission. That's followed by the Midwest ($49,636), Southeast ($47,236), Northeast ($46,846) and Northwest ($46,750), according to the survey.

If they're paid hourly wages, service managers make an average of $15.41 an hour nationwide, with the Southwest region averaging the highest pay scales ($17.19 per hour, on average) and the Midwest averaging the lowest ($14.45 per hour). While 63.5 percent of dealerships have their service managers on salaries, 85.8 percent of service techs, 81.1 percent of counterpersons and 78.7 percent of service writers are paid by the hour, according to the survey. (Click on charts for larger view.)

Service techs make an average of $15.95 an hour nationwide. Again, the highest hourly wages were reported by dealers in the Southwest ($17.25/hour) and the lowest in the Midwest ($14.85/hour on average). Service writers make an average of $12.76 an hour nationwide; those in the Northeast make the most ($13.96/hour) while the Northwest comes in at the lowest level ($11.94/hour).

Parts and Service counterpersons average $11.68 an hour nationwide. Again, the Northeast reports the highest wages ($12.78 an hour average) and the Northwest the lowest ($10.65/hour average).

Shop foremen earn an average hourly wage of $17.05 nationwide; if salaried, they earn $39,382 per year on average.

Dealernews surveyed more than 1,000 dealers across the country in May and June 2008 to determine what dealers were paying their prime employees — general managers, sales managers, service managers, service technicians, department managers and other key personnel. Given that pay scales can vary according to a number of factors, Dealernews sorted the data according to salaried and nonsalaried positions; geographic location (Northeast, Southeast, Midwest, Southwest, Northwest); whether the dealership is in a rural, suburban or urban market; and other factors.

Of the more than 1,000 dealers responding to the survey, just over 70 percent were franchised stores (selling new units) and 29.7 percent were nonfranchised businesses (parts-and-accessories-only stores, or businesses selling used vehicles).

The annual gross revenue for responding dealerships averaged $4.6 million nationwide — $5.8 million for franchised dealerships; $1.9 million for nonfranchised businesses/shops.

ONE TO 3.5

The average dealer employs one service manager and 3.5 service technicians, although 37 percent of dealerships employ four or more service techs. The average dealer also has one service writer and 1.8 counterpersons (although 40 percent of respondents said they employ two or more counterpersons).

Shop foremen stay with a dealership the longest (7.6 years on average, nationwide), followed by service managers (7.4 years), service technicians (5.9 years), service writers (4.3 years) and counterpersons (4.4 years). It's worth mentioning that nearly half of responding dealerships report that they do not employ a shop foreman.

Of the dealerships responding, almost half of them said that they establish their pay scales by finding out what competitive dealerships are paying for similar positions. Roughly a third said they had no formal recruitment or wage-setting strategy, relying instead on personal referrals. Other findings:

  • Nationally, dealers add slightly more than 10 percent to their salary budgets to pay for employee benefits. Dealers also reported that about 32 percent of their total business expenses are for labor.
  • 73 percent of responding dealers claimed to have a formal procedure in place to deal with workplace injuries, and 43 percent of dealers experienced at least one workplace injury requiring an emergency room visit in 2008.
  • One in three dealerships requires drug testing as a condition of employment. Slightly more than 40 percent of respondents say their business requires drug testing if an employee is suspected of being under the influence of drugs or alcohol while at work. Only 10 percent of shops perform random drug testing of employees.

The 270-plus-page Dealernews Wages & Benefits Study is available in hard-copy only for $99.95. Anyone interested in purchasing the survey can contact Jacqueline Hayes at jhayes@dealernews.com or e-mail editors@dealernews.com.