What Gets Measured Gets Improved

Its a priceless mantra that we’ve all used many times. However, knowing what you are going measure (and why), how are you going to measure it and how are you going to turn your new knowledge into an actionable and worthwhile result is the real challenge.

What I’m talking about is reducing driver turnover and using the real data that is right at your fingertips, if you chose to mine it and use it for better turnover results. When I ask most companies about their turnover rate, rarely do I get a response that is more than a guess. I find that surprising, to say the least. In today’s trucking environment it is all about the driver, hiring them and keeping them. Here is what I measured, how I measured it and how I used the results when I ran my company.

What

  • We had 6 dispatch boards with approximately 300 trucks. We measured short-term turnover, meaning those who had been with us for under 1 year. We grouped this by drivers, O/O’s and overall. We tracked companywide turnover, meaning the board fleet as a group, again segregating company drivers and O/O’s. We also measured turnover coming out of our training trucks on entry-level drivers. Total reports were 4-5 per board, depending on whether they had ELD or not, and overall total reports were 27 – 33.

How 

  • We used an old JJ Keller formula that I still use, it really doesn’t matter what you use if it is consistent, and it is a rolling 365 day a year tool. We used the following:
  • Short-Term Driver turnover ratio 12 Month = Drivers no longer with the company that were hired in the last 12 months divided by the number of drivers employed in the previous 12 months.
  • Long-Term Annual Turnover Formula    = Drivers no longer with the company (YTD) divided by elapsed days X 365 divided by total # of Drivers. By the way, an employed driver is one that has turned at least one mile of work in which revenue was generated. The fact that you have any no shows at orientation is an entirely different issue.

Action

  • We’re looking for variations in the numbers. Why are some boards results better than others? We’re not looking for bad guys here. The exercise will reveal two things are at play here that can help our results:
    • First, you will likely see where you are getting some stellar results – an individual or two that have turnover rates that are well below the rest of the gang. The obvious question is how are they getting these results? Are there things that they do that can be shared with the rest of the dispatchers? Do these individuals have behavioral traits that we can identify and possibly hire to those traits in the future? Can this person or persons mentor other dispatchers?
    • Secondly, are there things we’re doing or not doing that are creating poorer turnover results on those boards that have the higher turnover numbers? Take a second level deep dive into common root causes on these boards and let’s see what’s really going on.

Once the measurements process is set up and functioning, it is quite easy to generate these reports on a monthly basis. Give it a try and see what opportunities you might uncover. Measure and manage – here we come.

Safe Trucking,

RJH

Driver Retention =Discipline

The core of the TCA TPP’s newly released driver retention project plan is a focus on managerial discipline. It lays out a step-by-step process that is designed to layer a gradual focus on creating a driver-centric culture at any given trucking company starting with the commitment by the senior management team to the successful execution of the program.
Through the process of rolling out the DR Project Plan to a new company, we encourage an on-site visit and workshop that I facilitate. Having done these on numerous occasions, I can usually expect that one of the common concerns that are revealed is that consistency is crucial to the successful execution of the DR Project Plan itself.
The manifestation of this concern among senior managers is in and of itself very telling of the culture of the business and it is a likely sign of a company (although it may be successful) is likely not performing to their maximum potential. What do I mean by this?  This is likely a business that operates in silos and not as a high performing, focused unit. Each department is trying to keep up to the pressures of the day, living in the whirlwind. They are not genuinely supporting each other and suffering when it comes to focusing on either a common purpose or accomplishing a WIG (wildly important goal).
One of the benefits of the DR Project Plan is that at its core it strives to hold people accountable for staying to the project plan. If an individual is not onside, they will be called out on their lack of focus by other members of the team. Hopefully this is done in a supportive way (as is encouraged). This support is a core commitment that each senior manager makes to the others as part of the program, and it is critical to its success. The program also addresses the blame game, finger pointing, and dodging accountability, which of course is nothing but a child’s play and a waste of spirit. The turnover in this industry and at each company I work with is a result of the company’s entire personnel’s efforts to get where it is – period.
Taking full accountability and ownership of the situation each company is in is the starting point for the program. There is no future in finding bad guys or playing the blame game, none. Everyone at the company and everyone reading this article for that matter has done everything perfectly correct and in perfect order to be where you are today. In your careers in your relationships in your communities, you have to own that paradigm, not to say that challenges and in some case significant problems didn’t present themselves to you, but you decided how to react to those issues. No one else but you, so own your successes own your failures, own your past and own your future.
Without this core understanding as a starting point, the DR Project Plan (and any other WIG for that matter) has a very narrow chance of ever resulting in the success that it was designed to achieve. It has been my experience that most new revelations, including the new DR Project Plan, are nothing more than common sense revealed. Hope you agree. You can find out more about the new TCA TPP DR Project plan at: https://www.truckload.org/tpp-retention-project/ or at https://tcaingauge.com/the-retention-action-plan/
Safe Trucking
RJH

Time to Get Serious About Safety

I have a real issue with complacency from carriers when it comes to driver turnover. I will arrive at this from two different angles. When I look at a motor carrier that has excessive turnover I see any number of things that ring of serious issues that may threaten the companies very existence. When operating with high turnover, there is almost always CSA issues; this still comes with deteriorating marketability to the available insurance markets, which equals higher rates. There is a direct correlation between high insurance rates and operating ratios. There is a direct correlation between high turnover and accident rates, which is a rabbit hole in that professional drivers want to work for safe companies. Conclusion, if your company with high-turnover and poor CSA scores and a tightening insurance market, you better hope the current excess capacity the industry is experiencing stays around for a long time because when it does slow down, and it will eventually, you’re going to seriously up against it, as they say.
How do I know this? inGauge has data from over 170 carrier profiles with granular, detailed comparable data points that reveal what I have stated as fact. No more speculation or conjecture, this is now factual predicated on hard data. Being an unsafe carrier is terrible for business, you threaten the public and severely limit the return on investment, profitability.
Good news is that it is never too late to start doing the right thing, investing in a better safety program and tightening the policies, processes and bring a culture revolving around doing the “right things right”. The biggest issue here is the commitment to change, getting everyone’s buy-in and getting things started – change scares people, and change they must if you’re going to win when it comes to this stuff. So if you’ve decided to do this, the place to begin of course is with the senior management team, they have to understand and buy into the reality that living in a company with excessive high turnover is a losing proposition with a limited future. After that, you’ll need to get all the folks inside the walls onside, and that is a bit of a sales job in itself, we call it the ‘WIIFM’ = “what’s in it for me,” and there are many nice WIIFMs that come with this. For instance, back to inGauge data, we know that companies with lower turnover have the fewer accident and their CSA results are in much better shape than those folks with high turnover. Lower CSA scores and accident rates mean lower insurance premiums, which just so happens to be a direct correlation to better than the average operating ratio, profitability.
We also know that bringing in a safety-first culture into a company typically brings in tighter management practices in every area of business. Companies that operate in this fashion have a higher truck to inside worker ratio; they embrace technology at a quicker pace than their competition another direct correlation to above average profitability. We also know this, and this is a big part of the WIIFM, these companies typically pay their inside workers a higher than average wage that most companies.
If none of that works, try this, no one comes to work with the intention of failing at his or her jobs, doesn’t happen. However, here we are in many cases with turnover numbers that would make a longshoreman weep. If you can’t convince your people inside the walls that every departure from your company, whether voluntary or not, needs to be taken personally, you need new people. Every day many folks who worked at your company have to go home and tell their family’s that they don’t have a job, that the next paycheck isn’t coming, that sucks.
We all know that most can pick up another job pretty quickly, that’s not the point it’s disruptive, it is a change, again people don’t like change, people like routine in a comfortable setting. Companies call them job jumpers and refer to the situation as driver churn. Give it all the labels you want to they left because you didn’t give them a good enough reason to stay. You have to make your company sticky, sticky as in setting yourself apart from the competition.
It’s a paradigm shift that your needing and here’s one that fits. Are you a motor carrier that requires drivers to fill the seats and move the freight, or are you a motor carrier that differentiates itself from the competition by the quality of its workforce.  Think about it both of these situations would have the same amount of people in them, at which one would you want to work?
I know where I would want to hang my hat, don’t take me wrong here the transition is not an easy one, but whoever told you that running a business would be easy. A challenge yes, it is, but it is indeed a challenge worth taking in my mind, but only of course if you want to be safer and make more money.  If you’re interested in discussing this further, please go to www.tcaingauge.com/retentionscore fill in the questionnaire and let’s see where things stand.

The Bounce-Back Driver

Guest Article by Steve Hitchcock, COO of Duncan and Son Lines, Inc.

I’ve been with Duncan for almost 8 years now.  One of the most perplexing things I have observed is the number of “bounce-back” drivers we’ve had.  What is a bounce-back driver?  It’s a driver who leaves us, but then later decides to come back.  Why is this phenomenon perplexing to me?  There are a few reasons.  All of them beg questions.  First, why are drivers leaving in the first place?  If they are unhappy and they leave, why do they come back?  Is there any way for us to get in front of this to keep them from leaving in the first place?  I think I’m finally starting to fill in these blanks.

Drivers (and all employees for that matter) can weigh many things when they decide on an employer.  And it’s important to note that they choose their employer every single day.  These factors (not an all-inclusive list) are what they should consider when deciding where to work: pay, commute, supervisor relationship, co-worker relationships, how rewarding the work is, advancement opportunity, work schedule/flexibility, time off, home time, benefits (med/dental/ancillary), being in-the-know, equipment, work culture, access to senior leadership, etc.  Not every employer is a good match for every driver.  Companies are seldom going to be good at everything on that list.  If a driver really values something that the employer doesn’t excel at, it’s a bad fit.  Hopefully the things we’re not good at are low on the totem pole for our drivers- otherwise, they’ll leave.  So, what’s the deal with the ones who leave, but then come back?  I think there are three main reasons for the bounce-back driver: burnout, a specific pain point, and not considering/ranking everything they value in an employer.

We have drivers leave because of general burnout.  We run the ports of Long Beach and Los Angeles.  It’s a great regional gig that gets our drivers home every other night.  The downside is the ports themselves.  There’s down-time.  There’s bad traffic.  The port terminal personnel don’t always treat our drivers with courtesy, professionalism, respect and dignity that they deserve.  We have drivers who get burned out on port work, quit Duncan, spend some time away and re-charge, then come back with a fresh outlook.  We offer some ways for our drivers to take a break from the ports, but they don’t pay as well as running the ports.

Sometimes drivers leave because they have a specific pain point that they are frustrated with.  It might be their dispatcher manager relationship, pay, the work schedule, or something else.  It eats at them until they find something else.  That something else is the promise of greener grass.  They make the leap and, often times, solve that problem.  Maybe our pay or lane was their issue, so they move to the promise of better pay or a better route.  But then they realize that they don’t get home often, or their schedule isn’t flexible, or they don’t connect with the manager.  Many bounce-back drivers have expressed that they just traded one pain point for another- or multiple pains.

Drivers also leave because they just didn’t know what they really valued.  They didn’t consider all of factors when choosing which company to drive for.  No job is perfect.  But they needed to ask themselves if the good outweighed the bad?  Generally, these bounce-back drivers got stuck on one or two negative aspects of the job and forgot about the good parts.  We are lucky that sometimes their next employer shows them the things we do well by failing at them.  Once they start considering all the aforementioned factors- and once they start ranking them by importance- they get a clearer view of what they need to look for in an employer.  This is when we bring them back home.

As an employer who competes every day for drivers, the ball is in our court.  We need to make sure that our employees know about and consider everything, not just one or two things.  We need to celebrate, communicate, and market all the things we’re good at- both internally and externally.  We need to be honest and upfront with ourselves, our employees, and potential employees about areas we’re not as good at.  We’re not for everyone, and that’s OK.  It’s our job to make sure that every day, when our drivers decide who they are going to drive for, that they make an educated, well thought out decision.

The Top 5 Leadership Absolute “Don’t Do’s” When You’re Focusing on Reducing Driver Turnover!

  1. Here is a harsh reality: you simply stating that the company is going to take on and beat driver turnover will at best be received with reluctant hesitation and/or apathy. This should not come as a shock but if you are approaching 100% turnover (or higher), it is not likely that your people believe too much of what your management team is saying. So why not look for (or create) a bell weather moment? Winston Churchill was credited with saying “never waste a good crisis”. You should pick when to reveal your company’s new driver retention initiative wisely. If you can tie it to a critical event, good or bad, then you need to determine out how to do that. In my past we decided to train all the “inside the walls” employees on customer service. When people start to realize how their actions affect those around them they start to quickly get the picture. When we finished the training, driver retention was a natural extension and the transition was easy.

 

  1. Do not take the issue of your company’s high turnover on as a challenge until you can wrap your head around the fact that you did everything necessary to cause the turnover you have now. The point here is that if you don’t take ownership of the issues neither will your people. Excuses for turnover are far too common and easy to come by in trucking. We have all heard them repeatedly over the years. Remember that the blame game does not solve anything. The only way to get off to a good start is to state that you’re determined to turn the corner on your company’s turnover and that from now on the responsibility for every driver that leaves or is fired from your company is on you and your people. There is an opportunity learn from every single failure. Take that failure personally. No one goes to work in the morning with the intention of failing. These are people’s families that we are messing with.

 

  1. Don’t keep your people in the dark about what you’re doing. Use every channel possible to let them know what is going on in your business. For your company to turn the corner on driver turnover you will need the assistance of everyone in the business. What is discussed must be the priority. Think about this: I give you information because I trust you, I value your input and I need your help. I don’t share information because I don’t particularly care about your opinion and I don’t think your input will bring value to this initiative. Want your people to be more engaged when they come to work? Let them become part of the solution, share as much information with them as possible and then ask them for their help.

 

  1. Do not try and impose your own personal values on people. If you or your senior managers developed a value statement and then took it to your people and expected them to respond positively to that statement, then you are in trouble – it just won’t work. A strong values statement can be the cornerstone of your retention objectives but only if it reflects your collective values and that you plan on following through with it. Here is the question to pose to your people – what would your perfect company look like? One paragraph from each person is all that is needed. Do it as a team that is working towards a common purpose.

 

  1. Do not get impatient. This is change and change will scare people. However, being patient does not mean turning a blind eye to behaviour that is counter to the company’s goals. Being patient means coaching and talking the talk. If that individual who refuses to change crosses the line again and again you will have to take the steps necessary to get the right people in those roles. These are tough decisions, but they are entirely necessary for you to succeed. Stay determined!

 

Safe Trucking.

RJH

TCA Retention Coach

Why They Are Leaving You (or Soon Will)

Trucking executives have been contemplating this statement since the first wheels turned in this industry. In the days of regulation, the opportunity cost of any empty seat could be calculated with certainty (it hurt, but you could at least make fairly realistic budgets and purchasing decisions). These days, that same empty seat could result in lost profits double or triple what they were last year at the same time. The anxiety of what’s being left on the table is palpable when I speak to trucking entrepreneurs and executives. During previous ‘hot markets’, I was one of these executives, and it wasn’t until we decided as owners that we were going to meet the challenge of high driver turnover ‘head on’ that we began to get a handle on it and eventually drive our triple digit turnover down to below 20%.

So why do they leave? It’s a complex question, but from a 50,000-foot view, it is really as simple as stating that people stay in situations they like, and they leave the ones they don’t. By parallel we all do it, we live where we live because it is a comfortable neighborhood, we are in the relationships were in because we see eye to eye with that person, they’ve got our back and we have theirs. We work at our jobs because they challenge us, we’re appreciated, and we enjoy the challenges and opportunities the workplace offers. People stay because they have purpose and are part of a team (a tribe if you will) that has the exact same purpose.

To put it all in context, your drivers leave (or will leave) because they have no attachment to your company. You have not created the compelling reason for them to stay. It’s hard these days for a driver not to feel like a small part of a bigger transaction, with an ever-decreasing connection to their tribe (in work and life). These forces make it easy for them to decide when another job, or bag of money gets their attention. You treat them like a transaction – don’t be surprised if they turn the tables.

The good news is that change is possible. Have been there, have done that. It’s tough. You may need to invest time and money. You may need to terminate people. You will be uncomfortable. It may get messy. TCA has created the framework to guide carrier members to low turnover numbers, it’s called the Retention Action Plan. This plan is the center piece of my role as the newly-minted Retention Coach, a service offering from the TCA Profitability Program. We believe that excessively high turnover is an unnecessary evil in our industry, and that with the right effort, and the right plan it can be reversed. If you’re interested in starting this journey, click here for a gut check.

Time to Tear Down Those Invisible Walls

Picture your typical terminal.  Dispatch and Operations staff are glued to their computers.  Safety people are trying to determine the best way to implement the latest regulation that is coming down the turnpike.  The driver manager is grumbling out loud about the driver doing the Sheboygan lane being late “yet again”.  And there is your driver, standing behind the half door (that prevents them from entering the office), hoping to get directions to that new customer that she has never delivered to.  She’s witnessing the office whirlwind firsthand, and wondering what is being said about her when she’s out on the road.  She is disconnected. Just after leaving, she speaks with a friend who tells her about how well he is being treated at his new carrier.  Deb likes the runs and the pay where she is, but something is telling her to look at this new place.

We all know that driver retention is an issue – it’s always been one.  Putting drivers in seats is what’s holding a lot of carriers back from growing their business, and taking advantage of one of the best freight markets in decades.  So why do we keep treating drivers differently from the office staff?  Richard Branson has a perspective on human capital that many should adopt, perfectly framed by this quote: “Your employees are your company’s real competitive advantage.  They are the ones making the magic happen – so long as their needs are being met”. Notice he didn’t state some of your employees. A Fast Company article put it this way:

It’s tough to argue with Branson’s logic.  Satisfied employees are simply more productive and more efficient.  They tend to work harder, contribute more and call in sick less.  They feel empowered, appreciated, and are more loyal.  They stick around so companies don’t have to spend as much time and money recruiting and training new workers.  Happy employees also tend to rave about their workplace, which can often attract new talent.  When job seekers are clamoring to work for a company, that company gets to choose the cream of the crop to join the team.  – Fast Company – 06-18-2015

Let’s address something right off the bat – drivers know that they get different treatment.  Follow a few of them on Facebook, if you don’t know what I mean.  Let’s take Driver Appreciation Week as an example.  You will see posts like “driver appreciation week – when the office gets a BBQ and the drivers are out on the road!”.  Some may also have other special events throughout the year that get great attendance from the office but there are only a few drivers who happened to be there.   Others have gotten away from holding golf tournaments or Christmas parties simply because so many of their drivers are on the road and can’t make it.  While this does level the playing field it might be causing the office staff to “blame” the drivers for causing “them to lose something”.

So, what can we do better?  First, individual attention matters.  Stop treating your drivers like they are being a pain.  These are the public faces of your company. So why are you sending out demotivated people to be in front of your customers.  Finding business is not the issue these days. If you have customers that are not ‘driver friendly’, time to put them on notice and take the step in the right direction. Further, drivers get this is a competitive and fast-paced business, but they do want to hear when they do things right, not just get blasted when they mess it up.  Sometimes it might just be that they have spent the last 7 days on the road, and need to have someone listen to them.  While they are part of a team, they still need some personal recognition to make them feel appreciated and that their efforts do make a difference.

Two, leaders set the example.  Make sure that senior managers are spending time on the loading docks, or in the orientation room getting to know your employees.  If you want your operations staff to break down the barriers, you need to be doing similar things.  Just telling people that there is now an open-door policy isn’t enough (everyone says they have an ‘Open Door’ policy, but very few mean it).

One dedicated carrier that I know once landed what was the company’s second largest account doing store delivery milk runs.  The customer was transitioning from using LTL carriers and shipping whenever it was needed to setting up a schedule and lanes that would balance the customer’s need with what a driver could reasonably do in a day.  One thing that the general manager did was send the salesperson in charge of the account out with one of the drivers for the first week’s worth of runs so that they understood exactly what was being asked of these drivers.  This had two major results – one, the manager got to see some of the tight places that they were asking the drivers to squeeze a 53-foot trailer into.  The second was that the carrier now had first hand driver input into the runs and adjusted what equipment we were using for the final deliveries.  Yes, it meant they had to go back to the customer and make some changes, but they now had happy drivers and the result was they only had one driver ask to get off these runs over the three years that the contract ran.

Finally, having physical barriers between drivers and dispatch should be minimized.  To paraphrase Ronald Reagan: “Mister dispatcher, tear down these walls”.  Communication needs to be two ways.  PC Miler might tell you that a certain route is the best, but a veteran driver may look at it and say that a particular state route is great in the summer time, but it becomes treacherous in the winter.  By taking that input and modifying the routes in the winter may add a few miles but reduce accidents and minimize hours of service issues.

Your drivers just want to be treated equitably.  They are on the road a lot so they may not get equal treatment, but it needs to be seen as fair.  Little things like giving a restaurant gift certificate to drivers who were on their runs during the company BBQ or Christmas party, will go a long way towards correcting things.  Consider having company-branded items that are unique to the drivers, or at least get distributed to them first.  Finally, consider having your orientations to include having drivers sit in dispatch and dispatchers going on day runs so that both sides understand what the other must deal with.  A little understanding can go a long, long way.  By getting rid of these differences you should have a more motivated team of drivers, a reduction in turnover and your company spending more time improving your driver force instead of always looking for another new employee.  Drivers are the face of your company to the customers – wouldn’t you rather it be a happy one (or at the very least – content)?

Retention – Building a Base

I recently had the great opportunity to speak at the KSM (Katz Sapper & Miller) Trucking Business Owner’s Roundtable. This is a first-class accounting/consulting firm that continually impresses me with their integrity, innovation and dedication to the industry. Every six months or so they assemble many their trucking clients, primarily made up of senior leadership, along with several leaders from non-clients to a half day education session. I was asked if I would be interested in speaking to the group on my take on the current state of driver retention. Also on the bill was my partner Chris Henry from TPP (Truckload Carriers Profitability Program) to speak on benchmarking, industry trends and the nine traits of high-performing trucking companies.

When I was asked, I quickly jumped at the opportunity. I admit I was more than just a little eager because, as I explained to the crowd, usually when I speak to the topic of retention the crowd is made up of recruiters and safety personnel. Don’t get me wrong. I have great admiration for the job these folks do, especially considering what they must deal with if they are in a high turnover environment. So, I warmed myself up to the crowd by suggesting to them that at every retention session held, at any event, that THEY should be the ones in the room along with their other senior managers. When ATRI (American Truck Research Institute) surveys the industry, as they do once a year, and the results have the driver shortage at #1 issue to the industry and driver retention down at #5, what I see is a complete disconnect and it starts with them – the leadership teams.

Does it ring as true to you as it does to me that suggesting that the primary issue in the trucking industry is a shortage of drivers when that same industry historically bleeds turnover at close to 100% – is it not nuts? Talk about the emperor’s new clothes.  This makes no sense!  There is a large volume of carriers who have their heads in the sand on this thing – they don’t get it and it saddens me. There are many trucking pioneers that dedicated themselves to building this great industry’s legacy. They did it by starting associations, fighting ridiculous legislation brought forward by uninformed politicians, organizing and leading. We do them no honor when we allow an environment of distrust permeate the industry between management and it’s driving force that we have named churn. This has gone on for far too long.

The other thing that riles me to the bone is that the situation is entirely fixable – been there, done that, bought the tee shirt.  You can beat it!  Where a lot of it fails is that leadership needs to look itself in the mirror and recognize that it starts with them. They need to step up and tackle the issue and make the decision to take on the challenge and beat it. I’m a huge association fan as any of you who have been reading my articles for a while know. Having said that I am also aware that associations can be a harbinger for a common lack of performance. Reports from an association come out suggesting that the latest numbers say the industry is at 100% turnover and members with their peers at industry events will suggest that their doing pretty good at 80%.  I have seen this many times. Talk about hysteria, news flash buddy – at 80% you suck, period.

The nice thing for me at this stage of my life is that I don’t need to hold back. My future does not depend on anyone’s opinion of me but my own. Telling a room full of senior executives that they need to get their heads out of the sand on this thing is kind of fun, I have to say. I don’t do it in a rude way but in a direct way, as is my nature. Did they listen, or did they tune me out?  That’s the real test and I have to say, as usual, some did, and some didn’t.  I got several business cards shoved in my hands. I talked to a smaller carrier whose turnover was at 30% and they thought it was way too high – outstanding. Then I was asked by a large truck fleet that I know has triple digit turnover if I would share a copy of my presentation with them, which I did. Then in their email to me they thanked me for sharing the content and said they would forward it on their recruiting department. Man, are you kidding? Didn’t you hear a thing I said?

At any rate, I’ll carry on. I have a couple items that I sell related to turnover that I believe have value, but I’m really neither here nor there if folks buy them. My real interest and passion is trying to get the message that high turnover is not necessary –  it can be beat; your safety record will improve dramatically, your insurance cost will go down along with your recruiting cost and guess what, your bottom line will soar. It makes me wonder what business some carriers think they’re in.

I also gave them this to think about – if you have high turnover your people do not believe what you say – they distrust you. I think this is a hard message for many of the ego’s in the room to handle but it’s true. If you are going to take this issue on it starts by self-reflection and looking in the mirror. Somehow, someway the culture in your business has turned sour, and that’s on you. If you can’t get by that then you’re in for a hard row to hoe in the years to come. Turnover will not be able to be compensated for by just hiring more volume. The tide is turning on that strategy in my humble opinion.

 

 

Driver Pay: The Elephant in the Room

Driver Pay: I have been asked to take on this subject on many occasions, and although I have touched on it on and off over the years on numerous occasions, I’ve never really gone at it head on. There is probably a couple of good reasons for this, including but not limited to the fact that this subject is a bit of a rabbit’s hole. It can easily lead many different places once you start heading down this road, and you are likely to disenfranchise yourself with any number of folks, no matter what position you take on these subjects. Having said all that, let’s get at it, as I have said in the past, and it is still true today, at times, there is nothing more illusive than an obvious fact and this is one of those times!

The obvious fact here is that we live in a free-market society whose economy runs on a supply and demand structure. The market will dictate the remuneration you’re paid, determined on the specialty of your trade, or skill in conjunction with the scarcity of workers in your sector. So if one is to put forth the position that drivers are vastly underpaid the argument that there is a driver’s shortage holds no water and must be false, you simply can’t have it both ways. If you don’t believe me, talk to any economist about this situation.

To do the subject justice, it might need more than one article, it will definitely need your input, so please give me your feedback, and I want to hear from you on this – both company drivers, owner operators and executives. I will give you my opinion on the only two paradigms that matter in this subject, first the driver’s then the company’s.

Driver Perspective

When I look at this subject from a driver’s prospective I don’t blame any of you for being completely confused, over the last 3-4 decades you have been heard and been repeatedly told that there is a driver shortage, and it is at a critical stage. Problem is, if this is in fact, then why hasn’t the average driver wage reflected that reality, depending on where you search or who you ask, you keep seeing average annual pay rates between 50K and 65K, what gives? Meanwhile, you just paid your plumber $120 per hour unclog your drains??.

Obviously something is amiss, and has been for quite some time, extreme shortage and 57K annually don’t add up. To be accurate there are companies out there that pay their driver’s markedly more than this, and likely some that pay much less this is the average – the range I found was from 38K to 100K. The typical driver take home is greater for the most part than that of the general average over all sectors no doubt, but again I can see a high frustration level when folks in this profession are continually told of the dire situation that the industry is facing with its overall lack of drivers.

It’s hard to bridge the gap between what we continually hear from industry trade magazines, and the national press, and what we see in the numbers and average pay scales, the two don’t add up. So whats one to do if you’re a driver? A number of things come to mind especially in light of the fact that any number of driver surveys over the past couple decades reveal that money is not always the least satisfying element of the job, nor the top reason for a driver to quit their current carrier.

There are two messages here; One is for the drivers to first, and always be checking the market to ensure that your being paid at or preferably above market rates for your services. If your research reveals that you’re not, I would have the discussion with your employer, and let them explain their perception of the situation. The second message is of course for the employers – you have to make your driver’s pay packages understandable (even customizable), and manage very closely the relationship between their expectations and your expectations. I might suggest an average base pay rate certainly no less than industry average for your sector is a good platform to start with, then a gain-share bonus plan predicated on all the familiar touch points, fuel burn, accident free miles, longevity, production – whatever those KPIs are for your company. These bonuses should provide the driver with the opportunity to get to the top of the range of driver wages in your area. Finally, and the most critical part of the strategy, is they need for these gain-share bonus plans to be obtainable, under promise and over deliver, what a concept right! You get this part right, and the word gets out you may have something, you’d think anyway, reality might be a bit more harsh, because surprise-surprise there is another twist waiting around the corner and it’s called a Human Resources Strategy and Driver Satisfaction.

Do assuming the driver has done their homework, they are now aware of where you stand with your company’s  payment schedule relative to the rest of the market in your area. They can stop looking for greener grass,  and focus on delivering the goods now right?  Not quite. I have discussed Maslow’s hierarchy of needs in previous articles and that we as human beings are driven to needs is a sequential order as is in our nature as human beings. For us to truly enjoy the sense of Physiological (or money) needs we have achieved we now need to move on to the Safety level and then of course up to the belongingness, esteem and finally self-actualization levels. These universal laws drive everyone from the Driver Seat to the C-Suite (no one is immune). If a company decided to lead the industry with their wage package, they will still be challenged to retain their drivers unless they offer an entire package that includes a sense of community and all that goes with it.

Is there a driver shortage? To me the numbers reflected in driver wages would suggest there isn’t, not that I can see anyway? It’s more aptly described as a Driver Churn problem. The churning of drivers in the industry is more a reflection of companies not spending near the amount of focus on their retention efforts than they do on building very efficient recruiting departments, and the vast eco-system of businesses designed to simply get people in seats – as opposed to keeping them in seats – with a true sense of purpose. When I ask most executives their turnover rates very rarely do I get a definitive clear answer, there is usually some hesitation and what looks to me as a very loose estimate of where they are at. This needs to change and until carriers realize that this subject needs to come out of the closet and be a daily focus moving forward we will as an industry continue to confuse driver shortages with driver wages levels.

 

 

 

Commitment: The Foundation of Retention

OBJECTIVE: The importance of commitment to success in improving driver retention is vital – and it starts at the top. Here we look at what must be done to ensure that leadership is committed and that the entire company knows this.

Commitment throughout the organization will be important to the success of improving Driver Retention. But commitment is especially important among the senior management team as they are setting the example for all others in the company. To consider and then decide to embark on a project to improve Driver Retention means that senior management have looked at the problems of excessive costs associated with poor retention, recognized that significant planning and effort, affecting the entire company, must be undertaken and that this effort is warranted by the significant savings and service benefits that will be the result.

Put this way it is very obvious that the work we are about to undertake is strategic in nature. It is Strategic because we will be investing time, confidence, and responsibility in company employees well beyond the driver team. In the process we will be transforming the company from one that has a victim mentality about high driver turnover into one that is a positive, supportive and service-oriented place to work – a winner. We will become a company where people, drivers included, want to work. A transition like this is obviously strategic in nature.

Commitment is one of the most critical ingredients to the success of any effort intended to bring long-term improvements to the way business is done. This commitment must come from the directors of the Company and it must be very visible – and active. It must be genuine and it must be unwavering. After all, people throughout the company will have important roles to play and their commitment must be inspired and supported by the commitment they see in their leaders. In short, Company leaders must be seen to walk the walk and make the same commitment that is being asked of the rest of the company departments.

In addition to fostering commitment among the staff, the senior-level commitment must be lasting, since this is a lengthy project, and it must be unanimous among the leaders. This last aspect is sometimes difficult to ensure, but it is important that the leadership team speak and act in unison on the need for the company to make the significant changes necessary to reduce Driver Turnover. At the senior management level this means that a personal commitment must be requested and delivered by each member of the management team. Like a lot of strategic planning initiatives, it would be a good idea to make positive and supportive engagement a part of the personal performance criteria for managers during this project.

Let’s acknowledge that achieving and maintaining commitment among the leadership team is not something that can be accomplished just by asking for it. There are very natural and predictable obstacles along the way and perhaps the most common is the difficulty we all have with adapting to change. This is natural – we all strive for stability and then along comes a new idea or a new process or a new direction and we naturally question and resist the change. But the management team has targeted real benefits for our company and our employees. We have agreed to undertake reasonable steps to achieve great results.

We have agreed to change.

Turn that agreement to change into a commitment to change. We have a commitment to reduce Driver Turnover. We are committed to making our drivers a Strategic Advantage for our company. Achieving and maintaining commitment will require us to periodically re-visit our plan and objectives to remind us that the change we are undertaking is worth it. Do this regularly to reinforce the commitment among the team. Do this so we do not fall back into old habits. In fact, be on the lookout for any wavering of commitment and the creeping in of those old habits.

So, what other benefits can we expect by recognizing the importance of commitment and then taking specific actions to achieve it? We will create a culture throughout the organization that sees and comes to expect a management team that means and does what it says. Secondly, it will deliver proof to the management team that they can achieve significant results by working supportively together – and they can use this approach to be successful in other important projects.

We are getting ready to draw a line in the sand. There was probably some bell weather or watershed moment that brought you to realize something must be done about your high Driver Turnover rate. Keep that motivational “trigger” in mind as we go forward – the one that drove home the need for us to do something serious to improve Driver Retention. This is important because the team must be in unison on this project for it to have sustainable impact, so make it a practice to occasionally remind ourselves of what motivated us in the beginning. For our company it was the fact that our safety and accident rate was getting out of control. Before we knew it our insurance costs were going up, our service was declining and we were constantly fighting fires. It had to stop – and improving the stability of our driver workforce was the obvious place to focus. Your motivation might be different. Perhaps you simply cannot find enough drivers to feed the turnover beast. Or maybe you are seeing your profits decline due to excessive costs associated with hiring and general inefficiencies. The ironic thing is that whatever caused you to start on this process you will reap the same rewards – reduced accidents and their costs, lower recruitment needs and those related savings and, finally, a general improvement in efficiency and quality that will drive better profits.