Driver Retention: Learning from Success

Driver turnover rates vary hugely across the trucking industry. Private fleets have an average employee turnover of 16%, for instance, while large for-hire carriers see average annual turnover rates in the neighborhood of 130%. Small truckload carriers average 96% turnover, while LTL fleets enjoy an annual turnover rate of only about 15%. Swings this wide can make a statistician airsick, but for years

Driver turnover rates vary hugely across the trucking industry. Private fleets have an average employee turnover of 16%, for instance, while large for-hire carriers see average annual turnover rates in the neighborhood of 130%. Small truckload carriers average 96% turnover, while LTL fleets enjoy an annual turnover rate of only about 15%. Swings this wide can make a statistician airsick, but for years trucking has taken them largely for granted. Not any more.

While there are very significant differences between fleet operations, some carriers on the high turnover end of the scale are taking a fresh look at what other types of fleets are doing to see if there are opportunities to reduce their own turnover rates and the costs associated with them. At Missouri-based Contract Freighters, Inc., (CFI) for example, president Herbert Schmidt has launched a year-long initiative to improve driver retention by changing the way the company works with its drivers.

“Even though we are a for-hire long-haul carrier, I am convinced we can reduce our driver turnover,” says Schmidt, “and let me tell you why. We had a 65-truck leased fleet working for us. His drivers did the same job as our drivers, they hauled the same freight, ran the same routes and used the same dispatch system, but their turnover rate was about half what ours was. So what did he do differently?

“He took care of his drivers like family, that's what,” Schmidt continues. “So few fleets that use company drivers get what they expect in terms of driver loyalty and I think it is because there is too much of a disconnect between departments.

“We are focusing on empowering our fleet managers to take care of their drivers' problems, to be their advocates with all other parts of our company,” he explains. “We want to equip our fleet managers to handle questions about things like payroll, benefits and workers' comp for drivers rather than bouncing the drivers themselves from department to department. The shift won't happen overnight, but we are committed to making this work and it will.”

ALL IN THE FAMILY

Schmidt is not alone in his focus on improving the driver's job by changing the intangible things that have so much to do with whether work is truly satisfying. “Personal, one-on-one contact and attention is what creates driver retention,” says Jeff Davis, vp safety and human resources for Jet Express, Inc., an Ohio-based fleet with about 350 drivers. “We begin with building relationships between our drivers and other members of the company and go from there. We get a lot of compliments from our new drivers for our orientation, for example. It is only about two hours long. We walk new drivers around to meet everybody and we sit down and talk together. We don't lock them up in a room for three days reviewing policies on Power Point presentations.

“Our feeling is that new drivers will need help with some things in the beginning no matter how much information we provide up front, so we get them working and making money first and then we deal with procedural questions one-on-one as they arise,” he explains. “A week into the job, when a new driver comes in with questions about how to complete a trip report or fill out a bill of lading, they know who to go to for personal help.

“Our turnover rate is 20.12 percent, close to the average for private fleets, and in a lot of ways our operation parallels what you see at many private fleets,” Davis notes. “Like many private carriers, we are a regional operation, which allows us to get our drivers home more often. That time at home is critical because family involvement is the big missing link for many drivers. They miss their children's baseball games and band concerts. They miss birthdays and anniversaries; they don't get to help with homework or go on family picnics.

“Jet Express is geared around family in lots of ways. Even our benefits package is family-oriented in that we put some of our driver payroll budget into a 401K plan and medical benefits for drivers rather than all into payroll,” he says. “I think that good drivers, loyal drivers, tend to value longer-term benefits like these, while drivers that change jobs a lot tend to be looking just at how much pay they can get right now. Better drivers see the bigger picture.”

THE LONG AND SHORT OF IT

In discussing turnover rates between private and for-hire carriers, the first thing that usually comes up is length of haul. Private fleets do indeed tend to be regional and short-haul, with an average trip of about 71 miles along regular lanes with regular stops. Drivers in for-hire fleets, on the other hand, may be away from home for days or even weeks at a time, crisscrossing the country along ever-changing routes.

“Driving for a private fleet and driving for a long-haul, for-hire carrier are really two different jobs,” observes Gary Petty, president of the National Private Truck Council (NPTC). “In most private fleets, drivers are home every night or almost every night. They travel the same routes and call on the same customers. It is a regular, predictable job that allows people to make plans, to have routines. But there is more to it than that.

“Remember that a private fleet is part of a company that is not primarily in the transportation business. They have another product to support and so they can't afford to send out a different driver all the time,” he continues. “Customers like continuity and the driver is often the link, the familiar face, representing the company to the customer. It is no wonder private fleets tend to offer drivers better pay, better equipment and better benefits. They are trying to hire for the long-term.”

Maybe, as Davis, Petty and Schmidt suggest, driver retention then is not just about long versus short hauls, but about long-term versus short-term perspectives, as well, and the kind of working environment the longer view creates for drivers and other employees. “Private fleets tend to have a culture of longevity,” Petty notes. “Fifteen to twenty years tenure is not uncommon at all and that sets a pattern within a company of pride, confidence and reassurance.

“Because they really want drivers to stay, private fleets work particularly hard during the pre-hire period to make sure that they hire people who will be a good fit for the company,” he adds. “They also spend a lot of time during a driver's first ninety days to make sure things are going well. Dispatchers are trained to honor and respect their drivers and to listen with a ‘third ear’ for unspoken problems. The whole driver's environment is really strategically designed for success. The payoff for this up-front investment is that drivers become more valuable as time goes on — more experienced, more productive, safer and better performers.”

PAY NOW OR PAY LATER

A fleet's decision to invest more up front on driver selection and programs or more on recruiting to keep up with turnover has long-term repercussions for the entire business, according to Petty. “You are really talking about two different business models,” he says. “That is what it comes down to. If you are hiring on the assumption that most of your employees will be short-term people for whom you will never end up paying 401Ks or other long-term benefits, then you peg most of your driver costs to that model and to things like recruiting, new employee education, bonuses for staying or for meeting various performance expectations, and so on.

“If you are hiring for the longer term, then you build your business on a different financial model entirely. Financial models have to be consistent with market reality, however,” he cautions. “If you are a publicly traded company and have to show profit quarter-by-quarter, it is tough to move toward the private fleet model with its up-front investment demands.”

CHANGING OVER TIME

In spite of the challenges inherent in the world of long-haul trucking, many fleets are seeing opportunities to make significant changes over time to help reduce driver turnover and reap the benefits that come with a more stable workforce. “The world of the irregular route, long-haul, for-hire driver is completely different from the world of the private fleet driver. It is a very tough life,” says David Hedgpeth, vp corporate compliance and safety for Frozen Food Express Industries Inc. (FFE). “You can't make an apples to apples comparison.

“However, that does not mean there aren't any opportunities to make changes,” he notes. “Dedicated for-hire fleets, for example, have a turnover rate very comparable to private fleets, so do regional fleet operations. I also think that technology is making it easier to do things like relays and interchanges, so that even long-haul drivers can get home more often than in the past. I also think electronic onboard data recorders will be an assistance because they will reduce the paperwork burden for drivers.

“At FFE, drivers are one of our top priorities. We do retention seminars for everyone, which include communication skills and sensitivity training. We are also developing an employee database and putting in more information about personal things like children's birthdays and anniversaries. If we lose the person-to-person touch, we can seem uncaring to our employees,” Hedgpeth observes. “No one wants to feel like a number.”

“Sometimes I think that we make the driver retention issue too complicated,” adds Jeff Davis. “You need to treat people like you want to be treated yourself.”

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