10 Ways To Reduce Driver Turnover
There's no quick fix, but training, communicating and knowing your drivers can help.
Patricia Smith
Senior Editor
The latest scoop from the American Trucking Assns. declares driver turnover was a whopping 136% among large truckload carriers in the fourth quarter of 2004. That tops the previous high of 121% the quarter before.
Small truckload carriers (those with annual revenues under $30 million) had an annual average turnover of 102%, up significantly from 79% in the previous quarter. Less-than-truckload carriers had a turnover rate of only 16%.
The numbers were a bit startling but not necessarily a surprise. For more than two decades, the for-hire truckload industry has struggled with driver retention. It's a serious problem, and it's expensive.
Estimated costs to replace a driver range from $3,000 to $12,000 and even as high as $20,000 depending on how it's calculated and what's included. Figuring a conservative $5,000, that means a company with 500 drivers and 100% turnover is shelling out $2.5 million a year to hire and replace drivers.
Turnover costs typically include recruiting, training, testing, background checks and the paperwork required to assure compliance with federal rules. They often overlook the impact on safety.
According to a study released last year by the Federal Motor Carrier Safety Administration, job-hopping drivers may also pose a serious safety threat. By comparing accident data with CDL data, researchers concluded that a driver who changes carriers twice or more annually has a higher risk of being involved in a crash than a driver with a more stable employment history. A driver who changes jobs three or more times a year is more than twice as likely to be involved in an accident.
That's the problem, but what's the answer? Last year and into this one, we've seen a steady stream of pay raises for truckload carriers. Human resource and management experts agree that higher earnings will help recruit more people to the profession and will prevent some drivers from taking jobs in other industries. But once everyone catches up and pay is pretty much the same from carrier to carrier, the job hopping is likely to continue.
"Drivers have proven time and time again that they're not the most money-oriented people," says fleet management consultant Duff Swain, president of Trincon Inc. "It's how they're treated that affects retention."
As he and many others emphasize, there's no simple solution to high turnover. But there are some things that can help.
~1~ Give Recruiters More Training And Better Tools
The ideal recruiter is one who understands the industry and the needs of his or her company and its customers. They're good listeners who are trained, through skillful interviewing, to find the best applicants and make them want to work for the company.
"I want recruiters to visualize a bowl of candy, and each piece of candy is a different flavor," says Kelly Anderson, president and CEO of Impact Transportation Solutions. "Their job is to find out what flavor of candy that driver would like, then offer that piece."
But in today's competitive environment, time is of the essence. Recruiters are under pressure to fill empty seats. They know that good applicants will go elsewhere if they're not snapped up quickly. At the same time, they can't cut corners on background checks or the paperwork involved. End result: Recruiters are spending too much time on administrative tasks and not enough time actually talking to drivers.
One way to get them out from under the paperwork and back on the phones is to give recruiters help with background checks and administrative details. Another is to automate all or part of the application and screening process.
Unicru Inc., a provider of hiring solutions, surveyed truckload carriers and found that only 21% had automated any portion of the hiring process. Those that had integrated screening and hiring through automation reported an average driver turnover of 23%, compared to an average turnover of 69% for carriers still relying on paper-based systems.
"Hiring a bad person quickly doesn't help you much, but finding the right person quickly is really an advantage," says Unicru's Chief Marketing Officer Chris Reed.
Today's technology allows recruiters to build a driver information file as they talk with an applicant. Through electronic interfaces with background check services such as USIS (formerly DAC), Motor Vehicle Records and background investigations can be ordered and received with the push of a button. One Unicru customer, Southeastern Freight Lines, says the automated system has reduced applicant processing from three to five days to one day or less. At the same time they're able to handle a much greater volume of applications since some of the screening is done automatically.
Automated screening systems often use keyword matches or even more sophisticated techniques to quickly sort through applications, which means users can broaden their recruiting efforts without getting buried in an avalanche of unqualified applicants. At the same time, says Reed, the system keeps tracks of applications and hires, which helps clients determine how and where their advertising money is best spent.
Automation can also give companies a readily accessible database of potential driving candidates. With Unicru, all employment applications go through the same system. A competency-based assessment instrument evaluates knowledge, skills and experience. The company has also developed a safety performance assessment that looks at personality traits such as carefulness, conscientiousness and dependability. Thus the system might spot an applicant who has the characteristics of a good driver. The company might hire that applicant for another position, but with future training as a driver.
As Reed notes, this is a database of applicants, not a pile of file folders, which makes it flexible and easily accessible. If operations suddenly needs drivers in a region where the company hasn't been hiring, recruiters have a database of potential candidates.
~2~ Know Who You're Hiring
Swain calls it the "churn and burn" philosophy, where the pressure to hire drivers has forced recruiters to offer a job to just about anyone who qualifies under DOT rules.
"Try and picture any other industry that has a $35,000-$50,000 job and the hiring decision is made after an hour or maybe 20 minutes on the phone," he says. "We can't go forward with that kind of environment - not in an industry that grows proportionally to the Gross National Product."
That brings us back to recruiters with the time and training to identify and court drivers most likely to fit the company's needs and its culture. Some companies are giving them another tool: behavioral assessments or, as they're more commonly called, personality tests.
Basically, these are tests designed to evaluate key personality characteristics such as aggressiveness, sociability, patience and conformity. An accurate gauge of those traits can help predict performance factors such as safety, productivity, customer service and longevity.
This is not honesty testing, which is banned or restricted in most states. Lawyers also caution against tests that measure a person's emotional or mental stability, which could violate the Americans with Disabilities Act, or tests that violate other discrimination and privacy laws.
Behavioral assessments can be effective tools for driver selection and management, but only if they're developed right and properly used. Tests used for truck drivers should be designed and validated for truck drivers. Equally important, behavioral assessments are not just for screening.
"They're a hiring tool and a management tool," says Greg Mechler of The Human Advantage. "If you're not going to use them beyond hiring, you shouldn't be using them at all because they're not going to give you the value you would hope to get."
The assessment system he works with allows users to create their own model based on top performers within the company. "You can use it to compile a profile of 20-40 of your best drivers. That in itself can be helpful in putting together a retention program," he says. "It gives you the characteristics of your best drivers and helps you determine ways to improve your ability to work with those people."
Managers throughout the company can benefit from training on personality-based communications and motivation, but it may especially beneficial - not to mention enlightening - for driver managers.
As Mechler notes, successful dispatchers or driver managers often exhibit personality traits that are almost directly opposite the traits commonly found in successful drivers. For instance, good drivers typically score high in the area of conformity. Successful driver managers score low. Drivers score low in dominance and extroversion. Driver managers score high.
Behavioral assessments, coupled with training, can help driver managers understand those differences and help them find ways to deal most effectively with individual drivers.
~3~ Roll Out The Red Carpet
According to some estimates, as much as 75% of a carrier's turnover comes in the first 90 days after a driver is hired. Many believe the reason is poor orientation.
"Supposedly, drivers are the most valuable people in your company," says Swain. "These guys are coming in at $35,000 to $50,000 a year. They're responsible for a $150,000 to $200,000 piece of equipment. And we put them in a room, show them some tapes and let them talk to one or two lower-level managers. As fast as we can, we get them through orientation and into a truck. There's no nurturing at this point."
Orientation should be the time when drivers start forming relationships with others in the company, says Anderson. The analogy is a boat tied to a dock. If it's only secured with a single bow line, a strong wind could cause the boat to break loose. "Many times we only have one line tied to a driver," he says. "It starts with the recruiter who unties it and gives it to the orientation instructor. He unties it and gives it to the fleet manager. That's just having one bow line - one point of contact for that driver. Then we wonder why it's so easy for drivers to leave."
Anderson admits that "the jury is out" as to who should participate in driver orientations. Some carriers bring in people from the various departments, others use one or two instructors for the entire orientation. He tends to favor the latter. It eliminates scheduling problems and doesn't eat up valuable time with frequent introductions.
However, he does encourage fleet executives to visit each new orientation class and he strongly recommends a tour of the company early in orientation. "It helps drivers connect with the whole company, not just their classroom" he explains. "It's a chance for everyone in the company to show themselves as friendly. When they see a driver they don't know, they should introduce themselves and give them a business card."
Anderson also recommends that drivers meet their assigned dispatchers or fleet managers the first afternoon of orientation, not at the end.
"What often happens is that the fleet manager is the last person you meet before getting into the truck and it's a rushed meeting," he notes. "The fleet manager is going to be that driver's connection with the company on a daily basis. You don't want their first meeting to be a kind of 'passing in the night.' "
~4~ Recognize Good Performance
Drivers might go to work for a company because of an attractive compensation package, but it's not the No. 1 reason they leave. "Time and time again we've seen that it isn't about money," says Anderson, "it's about appreciation and respect."
Elsewhere in this issue we look at incentive programs and their potential effect on safety, productivity, fuel economy and even turnover. But recognition isn't just ball caps and bonuses.
"One thing I challenge carriers and fleet managers to do is show specific and genuine appreciation to one driver per day," says Anderson. The reaction from the driver may be little more than "aw, shucks," but the good performance will be reinforced. Moreover, he adds, "If you take a moment to specifically appreciate what a guy did for you this time, the next time you need someone to go the extra mile, he's going to be geared up and ready to go."
Pressures and problems of the normal work day make it easy to forget a simple "thank you," but with practice, it becomes a habit, Anderson says. "Once that starts happening it becomes a culture of people appreciating people, and a great place to work."
One company president took that advice a step further, requiring fleet managers to give him the name of one driver per week who had done something special. Then he called those drivers to thank them himself. "It tells the driver that his fleet manager thought enough about what he did that he took the time to tell his boss about it," Anderson notes.
Swain says truck drivers should get regular performance reviews just like most other employees. "A driver should be brought in once every six months or at least once a year for a performance review," he advises. Reviews should cover areas where the driver excels and where his performance could be improved, with suggestions to help him make those improvements. Drivers who have done well should get merit pay increases. And drivers should have a chance to bring up problems or issues they want to discuss. "It's accountability," says Swain. "It's review and it's recognition."
~5~ Make Sure They Hear The Truth
Check out any of the web sites where driver air their complaints and you're likely to see one phrase repeated often: "They lied."
Recruiters lied about how much a driver would earn or how often he would get home. Dispatchers lied about loads. The sins are endless, and endlessly repeated. Sometimes it's true. More often, it's not.
"You could write a whole article on 'The Big Lie,'" says Mechler. "Nine times out of 10 the driver hasn't been lied to, there has just been a misunderstanding or a change of plans."
Misunderstandings are a big factor in turnover during that critical first 90 days, so Mechler advises an "expectations exchange." When a new driver comes on board, one of the first things on the agenda should be a meeting with his or her driver manager. The manager goes through a checklist of expectations such as "How many miles do you expect to drive?" If the driver's expectations don't gel with company expectations, the mismatch is sorted out right there.
Another problem, says Mechler, is that companies often fail to make sure their drivers and operations people understand the real purpose of their business and that they recognize how unpredictable it can be.
"A customer may call in the morning and book 10 loads. You schedule the drivers, then the customer calls back. They've got a problem with one of their production lines and they have to cancel part of those loads. The first thing you hear from the driver is 'you lied,' " he says. "They don't recognize that the only reason the company is here is to help its customers get products from the plant to market. The good companies, the ones with low turnover, make decisions on what's in the best interest of the business. Drivers need to understand and accept that."
In his retention seminars Anderson trains managers to be aware of potential problems with communications. For instance, people often read electronic messages based on the way their day is going. "If they're having a good day, they see it as a nice message. If they're having a bad day, they'll read a bit of a snarl into that same message," he says.
Telephone conversations are better because the tone of your voice can communicate concern or willingness to help, but phone talk can be misinterpreted if the other person is distracted or not able to hear well. "When a person start to interrupt you, they're not listening," says Anderson. "You have to try to shut them down in order to get them to hear and understand what you're saying."
But fleet managers and recruiters need to be aware of the fact that some drivers are never going to hear anything but lies. "No matter what the recruiter, orientation instructor or dispatcher tells them, they're going to try to manipulate the answer," says Anderson. A well-trained recruiter can usually spot those people through a review of their work history or the interview.
"I like to get that answered before I hire a guy," he says, "because I don't need someone in my fleet saying I lied to them."
~6~ Run A Good Company
Driver retention "isn't about being nice, it's about being good," says Mechler. "The companies that have low turnover are good at what they do. They make their dispatch decisions quickly, they communicate clearly to the drivers. They make sure the drivers know what's expected, how it's going to be done and why it's going to be done. Then they make sure it happens."
And while truck drivers may not be MBAs, they know when a company is making bad business decisions, he adds. They know that too many long layovers and a lot of deadhead miles aren't good business. When they see a lot of bad business decisions they get anxious and start looking for work with other carriers.
"Good business decisions are win-win and bad ones are lose-lose," Mechler says. Case in point: detention. "If you've got a productive asset - a truck - tied up for eight hours, and a labor asset - the driver - tied up for eight hours, the driver is losing and the company is losing. And if you tell that driver that he's not going to be paid detention because you couldn't collect from the customer - or you didn't even bill them - he's going to see himself getting abused by the customer and you're not doing anything about it."
On the win-win side, Mechler notes that carriers have gotten more aggressive about tracking and billing detention since the new hours of service rules went into effect. As a result, many shippers have made changes to improve the speed at which they load and unload trucks.
If shippers won't cooperate, well-managed carriers find ways to address the problem themselves. Mechler cites one company that decided some time ago to run a 1:3 tractor/trailer ratio. That way, if a customer had a problem loading or unloading, the drivers - usually owner-operators - could drop the trailer and move on. The added equipment costs were built into the freight charges. "They made the strategic decision to be high price/high service," he says. The company is doing very well and its turnover rate is under 60%.
The better companies also give their managers a lot of training in "people skills." Anderson's seminars teach managers to recognize different personality types so they can deal more effectively with drivers. Stress and anger management skills are also important.
"Anger is a normal reaction to stress and in our companies we're eaten up with stress," he says. Managers should be taught to recognize the signs of stress in themselves and in drivers, then do something about it before it becomes anger.
Training should also include negotiating skills. "So many things we do on a daily basis in trucking are about negotiation," he explains. "We train fleet managers to look for the win-win solutions, to identify the other person's needs, to talk about the issues, and to never attack. As soon as you attack, the battle lines are drawn and those negotiations aren't going anywhere good."
~7~ Create Career Paths
The trucking industry hasn't focused on the career-conscious driver, says Swain. Trucking is seen as a lifestyle, and when drivers leave a position they're usually making a lifestyle choice rather than a career choice.
"We have to create career paths instead of lifestyles," he says. "We've got to attract people who want the job for the right reasons - because there's a future for them as a driver, or maybe it's a path to management.
A career path might start at student driver or trainee level, then advance through various levels of experience and skills, such as hazmat or bulk products. Drivers might become certified trainers or, with the proper skills and education, move into management positions.
Becoming an owner-operator could be another fork in the career path, but it shouldn't be the only choice for a driver who wants to advance. Carrier lease/programs can be a good stepping stone for drivers who have the aptitude and interest in running their own business - and can be especially beneficial if business training is involved. But they can be disastrous for drivers who aren't cut out to be business owners.
"If he fails he's gone," says Swain. "You lose an owner-operator and you lose a driver."
At many companies, the career path starts before driving - in distribution centers or maintenance shops. Swain also suggests that carriers develop entry-level driving jobs in local cartage or short-haul operations in states where 18-year-olds are allowed to drive intrastate.
~8~ Train More Drivers
There's a real need for more driver training programs, and trucking companies are going to have to step in, says Swain. In-house schools are fine for the biggest companies but others must find ways to obtain funding for accredited programs. He suggests that organizations such as the American Trucking Assns. and the Truckload Carriers Assn. work with the banking industry to develop guaranteed loan programs. Many trucking companies offer tuition reimbursement for new drivers. Some might even consider working with financial institutions to offer limited loan guarantees for driving school students they sponsor.
More training and funding for students might help the industry tap into non-traditional employment pools such as bilingual minorities, displaced workers, working women and economically depressed minorities.
A few years ago, Swain was involved with a program to train drivers from Puerto Rico and bring them to the U.S. A school in Puerto Rico prepared them to qualify for their CDLs. Once qualified they would work, through a driver leasing company for a major truckload carrier here. Their schedule would be approximately three weeks in the U.S. and a week in Puerto Rico. After two years they would be given the opportunity to relocate to the U.S. and become permanent, full-time employees.
"We packaged the program so that we were offering a career path," recalls Swain. It was dropped after the carrier was acquired by another company, but he says it was working well. There were about 100 drivers in the system. As a group they had an excellent P&D on-time record and "literally no workers' comp claims."
Puerto Ricans are U.S. citizens and most are fluent in English, but part of the training was preparing them and their U.S. managers for the cultural differences. Program administrators also had to deal with the concerns of U.S. drivers.
As Swain explains, the Puerto Rican drivers were paid a salary plus mileage. When the carrier's U.S. drivers got wind of the mileage rate, which was significantly lower than anything here, they assumed the company was bringing in cheap labor to take their jobs. The company explained the compensation package.
If the Puerto Rican drivers' productivity wasn't as good as that of the U.S. drivers, they would make less. If their productivity was good, they would make as much as the U.S. drivers, but not more. Carrier management also stressed that this was a growth opportunity for the company - and what was good for the company was ultimately good for its drivers.
~9~ Be Predictable And Consistent
Behavioral assessments of drivers with good safety records usually show two key personality traits: patience and conformity. Patience means they're easy-going and adaptable, but they like consistency, Mechler explains. Conformity means they're quality conscious and they like doing things right. "They'll do what they say they're going to do, and they expect the same of others," he notes.
But the kind of people who make good drivers from a safety standpoint aren't the kind of people who normally work well in the dynamic, unpredictable and inconsistent truckload environment.
Mechler says many truckload carriers have reduced their turnover by developing consistent procedures and policies. Where they can, some are trying to make their freight systems as predictable as possible.
To illustrate, he cites an Indiana carrier that assigns each driver to one plant. They go any number of different places to deliver the loads, but they always return to that plant. Usually they're not out more than three or four days. Those drivers earn about 20% less than the average driver pay for the area but turnover is only about 35%. And whenever the company puts an ad in the paper they get a flood of applications.
"The more predictable you can make the job, the better," Mechler points out.
Swain proposes another kind of change: slip seating. LTL carriers and package delivery operations have been slip seating trucks for years. For some truckload operations, such a fuel delivery fleets, slip seating is also common. "If they do not operate 24/7, no one makes a profit," he says.
While it's not right for everyone, he maintains that it is right for some truckload carriers willing or able to operate in highly saturated lanes, employ drop and hook techniques, and domicile trucks and drivers differently. At his web site, www.trincon.com, Swain has a white paper with models of slip-seating plans and the potential benefits. The bottom line, he says, is that getting away from the one man/one truck tradition can increase revenue per truck and reduce turnover because there are more opportunities to get drivers home. The sticking point: drivers themselves.
"We've done such a poor job in human resources management that we've allowed the driver to think that the truck belongs to him," he says. "They have to realize that they don't own the truck and that the company can't afford to have a truck sitting at their house when it could be delivering freight."
~10~ Assign Responsibility
It starts at the top. The corporation must be committed to improving driver retention and it must have the active support of top management. "They can't just announce a commitment then go about doing other things," Mechler cautions. "People watch to see where the company executives focus their attention, then they do the same thing."
Driver retention must be part of the company's written strategic or operating plan. "You have to have a clear strategy and a set of principles," he says. "You have to have ways to reinforce things that are in the plan and discourage things that are not."
The plan must also make clear who is responsible for driver retention. "The conventional wisdom is that everybody is responsible, but if that's all you say, then nobody is accountable," he points out. "I believe it should be the function of operations, starting with the vice president of operations. Then individual driver managers should be accountable for their fleet."
Those people who are responsible should be given the tools they need to do the job, including training, accurate data and a well thought-out plan. "We measure fuel economy, we have good data on maintenance and replacement costs, but a lot of companies don't even know their turnover rate," Mechler says. "They put a lot more analysis and quantitative thinking into spec'ing their trucks than they do into spec'ing people."
For More Information
The Truckload Carriers Assn. has information on a variety of topics,
including driver retention, in the "information" section of www.truckload.org.
Following is contact information for the people or companies mentioned in this story.
• Greg Mechler, The Human Advantage, Plano, Texas, (800) 824-4908.
• Kelly Anderson, Impact Transportation Solutions, Neosho, Mo., (888) 429-3445.
• Duff Swain, Trincon Associates, Columbus, Ohio, (614) 442-0590.
• Unicru Inc., Portland, Ore., (800) 933-6321.
