August 4, 2021
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For decades, the Transportation industry has been up in arms over the driver shortage. The American Trucking Association's Bob Costello has gone as far as to suggest that the industry will have a job deficit of up to 105,000 drivers by 2023. Several factors make the current shortage particularly acute. The COVID-19 pandemic has exacerbated the shortage on many levels - from the closure of CDL schools across the country to the surge in eCommerce retail purchases and enticing unemployment packages for those facing hardship.
In response to the current shortage, different measures are being taken to increase talent volume in this essential work pool. This includes the DRIVE-Safe Act, which will allow 18-21 year old's to contribute more effectively to the industry. Carriers and staffing firms have a huge push to seek a stronger mix of diversity by creating more jobs for military veterans, women, and entry-level CDL drivers. It also includes reactive measures, like increased pay rates and the promise of large signing bonuses.
As we look closer at the industry, however, we can gather that we are also dealing with a crisis of driver retention in addition to the driver shortage.
Large carriers in 2020 experienced an average turnover of 90%. For mid-sized carriers, turnover was 69%. For large companies, that means 9 out of 10 driver recruits will be gone in the first year, or three driver positions will need to be filled three times.
If we assume that the turnover of one employee costs a company $5,000 on average - and the cost to recruit/onboard a new driver costs roughly $10,000 per hire - we can easily build a case for increased pay rates that help retain the existing workforce. So - where else could we proactively invest those sunken costs to retain drivers?
We interviewed over 500 CDL drivers on job preferences and what they seek from employers. Here is what we found.
According to the research conducted, the number one reason a driver will leave a current job for a new role is not being respected on the job (22% of respondents). We should note that this scored higher than "wanting more home time" (21% of respondents) and "wanting a better compensation package" (20% of respondents).
One key pain point in the driver relationship to its employer appears to be interaction with recruiters, followed by the dispatcher. The most disgruntled and "ready for change" drivers expressed a high-level of dissatisfaction with the recruiters they worked with. Here's what they told us:
A key takeaway? If retention is a priority - recruiting with transparency must follow suit. Bait and switch tactics might get your seats filled in a pinch, but by not seeing through on your promises to a driver, you will end up absorbing more costs via turnover. And if you can't attract drivers with your current package, it's probably time to revisit it.
Weekly pay is often cited as being the most important criteria for a CDL driver when taking on a new job. Although it is definitely a leading factor for decision-making for all the cohorts of drivers we interviewed - we also uncovered that home time is more crucial to drivers 45 and up than weekly pay.
We also uncovered that benefits packages are least important to young drivers - but nearly twice as important to drivers aged 36 and up. Flexibility is one of the top three most important qualities to drivers aged 18-35 and appears to be more important to this age bracket than any other cohort surveyed.
While all drivers expect pay rates that fit the work being done, not all drivers are equal in terms of what they expect from you. Develop compensation packages for your workforce that reflect their lifestyle, and review it with them often to ensure that you are still contributing to their long-term goals.
Drivers satisfied with their current roles are not only less likely to contribute to turnover, but they are also more likely to refer people to the industry - and to work for you. In fact, 100% of satisfied drivers would recommend a career in trucking, compared to only 15% of drivers who are not satisfied in their current roles.
Today's truck drivers have the upper hand in the current market scenario due to the abundance of available jobs - they also have a powerful voice box and influence over the workforce. Trucking forums are highly active with employment ratings, and bad reviews will go a long way in the driver community.
Adopt a service leadership approach to understanding what drives higher satisfaction, and deploy it at every phase of the driver experience. This may include revisiting your compensation packages, shifting routes and domiciling strategies to improve the driver's ability to be home more with their family - and then some.
The business case for improving retention is right in the numbers, understand what turnover costs you today - and then put together a proactive strategy for investing those sunken costs into better outcomes for your business. Before rolling out a blanket solution for every driver, be sure to analyze your workforce in cohorts and prioritize satisfaction.
Are you interested in improving driver retention? Download our Driver Insights 2021 report to learn more about expectations from the truck drivers of today.
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