Must the trucking industry return to 100% turnover?
In the fourth quarter of 2016, driver turnover fell by double digits to historically low annualized rates of 71 percent for large truckload fleets and 64 percent for small fleets. The American Trucking Associations attributed the decline to a slow freight market. While the economy certainly was a factor, must we assume turnover will rise to 100% turnover or beyond as freight volumes rebound?
How we got here
History would support this assumption. The trend line for high driver turnover began in 1986 when the Federal Motor Carrier Safety Administration established the Commercial Driver’s License.
The federal rule effectively ended the patchwork of state requirements. But for aspiring truck drivers, a CDL now takes between six and 10 weeks of training and it doesn’t come cheap. CDL schools typically charge $6,000 or more in tuition. That’s a very high barrier of entry for a blue-collar trade.
As the driver shortage intensified, carriers have lowered their hiring standards. Human resource departments used to screen and interview applications for all driving and non-driving positions. To streamline HR functions, recruiting departments have taken over to fill empty seats.
Other factors in the trucking industry have converged to create what John Kammeyer-Mueller, Ph.D., a professor at the University of Minnesota and a Stay Metrics Scientific Advisory Board member, describes as the perfect storm for high turnover.
The perfect storm happens, he says, when mutual expectations are not being defined, incentivized employees handle hiring, and sign on bonuses abound. Sound familiar?
Becoming an Olympian
Contrary to popular belief, high driver turnover is not inevitable in the trucking industry. Just as world-class athletes can defy the odds, so can motor carriers.
Consider the four-minute mile. For years, the 4-minute mile was considered not merely unreachable but, according to physiologists of the time, dangerous to the health of any athlete who attempted to reach it. Then an Olympian, Roger Bannister, clocked in at 3:59.4. His record in 1954 was beaten 46 days later. By the end of 1957, 16 runners had broken the 4-minute barrier. It wasn’t just a physical barrier that was broken; it was a psychological one as well.
What will it take to outperform your peers in the trucking industry? Let me offer a real-life example of two motor carriers who are in the same market, are the same size and serve a similar base of customers.
Carrier A does a phenomenal job of defining and matching expectations for new drivers. This carrier uses the full suite of Stay Metrics surveys to identify areas where drivers are satisfied or dissatisfied. This carrier has 28 percent turnover.
Contrast this result with Carrier B, a new client of Stay Metrics. They are in the process of revamping its driver recruiting. This department traditionally operated as a sales department. The company would hire any driver that met its minimal standards. This carrier has nearly 100% percent turnover.
The formula for success
The economy will rebound. Based on our clients’ experiences, you don’t have to see 100% turnover when it does.
Companies that are able to retain more of their best drivers are far more likely to outperform and outgrow their peers. The formula is to not just work harder but smarter. Set goals, allocate resources, and create retention plans to meet the goals
Our research and experience show the number one strategy to increase driver retention is to create a culture of truth-telling. Driver prospects should know the good, the bad and the ugly of the job. Setting realistic expectations during the recruiting, orientation and onboarding process will set you up to consistently outperform industry peers.
We’re ready to help you identify and execute on strategies that will move the needle of driver retention. Please give us a call at 1.855.867.3533 or send us a message at https://staymetrics.com/contact/.