Employee turnover is a headache for hiring managers in every industry. The cost of screening, onboarding, and training just one worker means a financial loss when the worker resigns. And trucking companies are no different. The cost of high driver turnover adds up to a huge price tag for the industry.
The Cost Of High Driver Turnover
According to the American Trucking Association (ATA), driver turnover is currently at 95%. This exacts a huge financial toll. That rate of turnover means an estimated yearly cost of between $3- to $5 billion to the industry.
High turnover isn’t just bad for trucking companies. It’s bad for drivers, too. Drivers who don’t stay with a single employer for long won’t accumulate much, if any, retirement savings. That means those drivers, especially if they’re already living paycheck to paycheck, will take a big financial hit when they retire and have to rely on social security.
The Realities Of Driving
Why is turnover so high among truck drivers?
Over-the-road drivers on a Truckers Report forum sounded off on this very issue. Several users wrote that many newcomers to the industry don’t realize what they’re getting into, thinking it’s “a way to make quick money easily.”
But then the reality of the job sets in: long hours, being away from family, and driving in bad weather. These hardships lead some drivers to either job-hop in search of what they think will be better assignments, or to leave the industry entirely.
Another reason drivers commonly give for leaving a company is broken promises over pay and miles. A company might promise a driver 2500 miles per week. But over time the miles might decrease, badly cutting into the driver’s take-home pay.
The golden rule of recruiting drivers, or any worker in any industry, is not to over-promise. Given the costs associated with hiring a worker, and the power of word-of-mouth when it comes to a company’s reputation, keeping a good employee is more important than getting him or her in the door for a short time, only for that employee to quickly leave to work for a competitor.
In a survey, the American Transportation Research Institute found that trucking industry professionals are highly concerned about a lack of qualified drivers.
“Fleets continue to tell us that competition for good, safe and experienced drivers is fierce, pushing wages higher in hopes of attracting the best talent,” said Bob Costello, the American Trucking Association’s Chief Economist. “However, unless steps are taken to make it easier for individuals to pursue careers in trucking, demand for drivers will continue to outstrip supply – eventually even leading to supply chain disruptions.”
How to Keep Good Workers
Paladin Capital Inc., a 1,000-truck company based in Nashville, TN, has impressively low turnover rates: 35%, compared to the national average of 95%. How have they accomplished this? One reason is their Employee Stock Ownership Plan. Plans like these give employees an ownership interest in a company, and therefore a stake in its long-term success.
“We have a company where everybody has the same last name: shareholder,” said Bill Prevost, Paladin CEO.
But creative solutions aside, the best way to retain employees is the same across all industries, whether the worker is a truck driver, a retail associate, or an IT professional:
• In the recruiting stage, give a full and accurate description of the job, as well as the wages and benefits on offer.
• Demonstrate respect for employees at all times.
• Offer performance feedback, and praise good efforts.
• Staff adequately so overtime is minimized for workers who don’t want it. Otherwise, the entire workforce will be worn out and unable to perform at their best.
The retention problem in the truck driving industry isn’t going to get better any time soon.
In October, the ATA reported that the driver shortfall could reach 174,000 by 2026. So trucking companies are going to have to continue to compete for the best workers, both by offering higher wages, and by creating a positive and respectful working environment for everyone.
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