Must the trucking industry return to 100% turnover?

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, PhD, 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, the hiring process is done by incentivized employees, and sign on bonuses exist. 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-makers, 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, and 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.

So, what exactly 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 during the onboarding process. The carrier uses the full suite of Stay Metrics surveys (7-day, 45-day and Exit interviews) to identify areas where drivers are satisfied or dissatisfied with various parts of its company. This carrier has 28 percent turnover.

Carrier B, a new client of Stay Metrics, is in the process of revamping its driver recruiting from what 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 by setting goals, creating retention plans and dedicating resources to accomplishing those goals.

It also helps to have access to services and experts that can assist, guide and direct towards this endeavor. I should note that 75 percent of the carriers that come to Stay Metrics have already broken the four-minute mark, so to speak, with an average retention rate of 55 percent.

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 the stage for consistently outperforming peers in the industry.

We’re ready to help you identify and execute on these and other 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/.

 

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