“The number one and number two reasons for driver turnover are lack of appreciation and lack of respect. The upside with this is that it doesn’t cost you anything to fix this problem. The downside is it requires a big culture change to fix it.” –Kelly Anderson, president and CEO, Impact Transportation Solutions
Well, I originally planned to post this post last week (plus scheme the schemes and line the lines, too, but a poor joke only those who followed Pete Townshend’s solo career in the 1980s will get) but due to a variety of reasons, it got delayed to today.
Yet, perhaps appropriately so, for we’re on the eve of the Mid America Trucking Show now; an annual event that brings in thousands of truck drivers from all over the U.S. to Louisville, KY. Big rigs will be parked side-by-side as far as the eye can see and the evenings outside the massive Kentucky Expo Center will be dotted by gatherings of friends old and new to catch up on the trials and tribulations of driving a truck for a living.
[As an aside, Larry Wright, a long haul driver for TL carrier Schneider National, recently shared some thoughts on the challenges of piloting big rigs up and down the asphalt. Although it’s a Schneider-produced video, I think many drivers – even owner-operators – share Larry’s perspective on things.]
With that in mind, let me share with you some of the thoughts expressed by Kelly Anderson (quoted at the top of this post) during a talk he gave at the Truckload Carriers Association annual conference not too long ago here dubbed The Driver Recruitment Crunch.
For starters, while Anderson – a 27 year veteran of the transportation business, who started his company Impact Transportation Soutions 13 years ago – is a consultant and his business is helping carriers improve their driver recruitment practices, he goes about it using a very different approach.
The first thing he does is go “undercover,” participating in his client’s recruiting process from start to finish incognito: none of the staff he interacts with knows he’s there to observe them – he’s just another driver candidate. (He’s got a valid CDL so he goes through all the road tests, etc.)
Then after observing how a carrier REALLY recruits and retains drivers, opposed to how they SAY they do it, Anderson (seen at right) then starts the “rebuilding” process – starting with the philosophy expressed in his quote above.
“Think about this: 72% of people decide whether to stay long-term with a new company within the first 72 hours,” he said. Yet most trucking companies have no contact with a driver candidate until they walk through the door for their first day of orientation – sometimes days if not a week after their paperwork gets approved.
“So you have a driver starting with you that has no relationship with your company, has no connection to anyone that he or she will be interacting with,” Anderson stressed. “Is it then any wonder that 75% of truck drivers turn over within the first 90 days?”
Pay and benefits are important, obviously, he emphasized, but what Anderson finds lacking in most carrier recruiting and retention processes is “the human touch” that he believes makes the biggest difference.
“Take this example,” Anderson notes. “What if the driver manager who is going to be assigned these new drivers calls them up at home after they’ve been approved for orientation, introduces him or herself, and says, ‘Hey, I know you are coming in for orientation in a week, but do you have any questions I can answer for you now?’”
In his experience, Anderson said most carriers experience about a 10% to 20% “no-show” rate for orientation. But the carriers he’s counseled, that make “pre-orientation” contact with new hires, get a 100% show rate.
He also pointed out that of all the things most new hires need right away is a paycheck, as there’s always a significant lag between their last paycheck at their old company and the new one they’re expecting.
“Why not do away with things like ‘sign on’ bonuses and instead create ‘transition’ bonuses, to help shorten that pay cycle up front where these folks need it most?” Anderson said. “Here’s another thought: why not pay drivers for their experience? You want the best drivers, the ones with 10 years of experience, but they don’t want to start over at the bottom of the pay scale. Why not change the ‘sign on’ bonus to an ‘experience’ bonus instead?”
Once drivers are onboard, Anderson stressed that it’s always – ALWAYS – more cost effective to keep them. Most carriers he works with admit to spending $3,500 to bring just one new driver on board; other estimates are much higher, up around $8,000. Yet all that money is lost without any return if a new hire leaves within 90 days – and as Anderson already noted 75% of turnover occurs in that three-month window.
“The problem is this industry remains too reactive to retention issues,” he said. “You need to focus on building driver-friendly freight, creating work-life balance, and making sure their paychecks are predictable.”
Anderson added that carriers really need to take this to heart, because the driver shortage is only going to get worse. He for one expects to see driver turnover rates reach highs of 150% to 160% this year, exceeding 200% for some carriers, as a variety of issues begin to intersect in 2011 and beyond.
For starters, the driver population is aging rapidly, with many closing in on retirement without enough “new blood” in the wings to replace them. Right now, according to industry statistics, the average age of an owner-operator today is 49.6, while the average age of a company driver is 48.6. That removes about 500,000 out of the current pool of 3.2 million CDL holders, Anderson said.
Going forward, another 250,000 to 320,000 drivers – some 7% to 10% of the total available workforce – are expected to be lost due to the new Compliance Safety Accountability (CSA) regulations established by the Federal Motor Carrier Safety Administration (FMCSA) late last year.
Indeed, Anderson said some recruiters are telling him that 50% of the hires they are turning down today they would have hired in the past, if they didn’t have the pre-employment screening program (PSP) data the FMCSA is now providing on drivers as part of the new CSA effort.
All put together, this means carriers must really change how they recruit and retain their drivers from here on out, Anderson warned. “Turnover is only going to get worse and if you don’t get ahead of the issue, you’ll find yourself eating the crumbs left behind by carriers that are far more proactive than you are,” he said.