The transportation industry has always struggled from a severe driver retention issue. Just in the last quarter of 2020, the turnover rate for truckload fleets with more than $30 million in revenue was 92%, according to an American Trucking Associations (ATA) report.
However, high turnover isn’t the only issue transportation and logistics companies are facing. A labor shortage has swept across America and shows no signs of letting up. Despite pay hikes, many companies are unable to bring in enough drivers to fulfill their workloads.
For example, FedEx currently reroutes more than 600,000 business packages a day due to a staffing shortage. This cost FedEx an estimated $450 million last quarter.
Finding ways to secure drivers is essential as peak season begins and Q4 2021 retail sales are projected to grow 7% compared to peak 2020. The transportation industry must be ready to bring in and retain road-ready drivers in order to maintain a high delivery rating and avoid any profit losses.
What’s causing the driver shortage?
Traditionally, truckload carriers, which move shipments of freight long distances, have experienced the industry’s most severe driver shortages. These drivers are usually on the road for weeks at a time and experience homesickness, loneliness, and a high amount of stress.
But while long distance carriers are still experiencing the brunt of driver shortages, they are far from alone. Large and small carriers alike are witnessing an unprecedented lack of drivers.
Jose Gomez-Urquiza, chief executive officer of Visa Solutions, an immigration agency with a focus on the transportation industry, told The Daily Express: “We’re living through the worst driver shortage that we’ve seen in recent history, by far.”
As many suspect, the shortage crisis was partly brought on by the pandemic. The surge of demand for shipped goods coupled with an increase in early retirements caused a large driver deficiency.
Another factor that has reduced the supply of drivers is the Federal Motor Carrier Administration’s (FMCSA) Commercial Driver’s License Drug and Alcohol Clearinghouse rule that alerts carriers to drivers who have failed drug tests, DUIs or other substance abuse problems on their records. Since the Clearinghouse rule went into effect in early 2020, some 54,000 drivers have been barred from driving.
Age has also played a role in the driver crisis. The American Trucking Associations found in a 2019 report that the average age of for-hire over-the-road truckers is 46. Other trucking sectors, like less-than-truckload and private carriers, have an even higher average age. As many of these drivers retire, few younger drivers step in to take their place.
The report also found that only 6.6% of truck drivers are women, even though they make up half of today’s workforce. The industry’s inability to appeal to women and younger laborers only amplifies the existing driver shortage.
All of these issues combined have created one of the worst driver shortages in U.S. history. Companies that wish to maintain a high delivery performance and stay profitable need to find ways to battle the driver crisis effectively.
How to attract more drivers
Before the internet, job openings were tacked to community bulletin boards or posted in the local newspaper. Today, however, employers can reach a massive audience with just a few clicks. The internet not only greatly expands a company’s reach, but it also appeals to the younger generation. Transportation and logistics companies looking to bring on young, energetic drivers need to use the platforms used by millennials when looking for jobs.
Here are three of the best ways to do just that:
- Take advantage of social media
In 2020, 3.6 billion people around the world used social media, and out of that number, 3.5 million of them were professional U.S. truck drivers. With such a vast audience, carriers that advertise job openings on social media are much more likely to have success reeling in applications.
Additionally, social media makes it easy for job posts to be shared, tagged, liked, and retweeted. When this happens, your potential driver base increases substantially.
Your social media channels should reflect core values of your company and compel people to want to work for you. Applicants also have the opportunity to dialogue with you and your team right on the platform they are comfortable with.
- Post on online job boards
Job boards, like Indeed, Glassdoor, and Careerbuilder, receive a lot of internet traffic that you can use to your advantage. These sites greatly increase your chances of finding drivers because many drivers use them to find jobs.
There are different types of job boards, some for general postings that are not sector or position oriented and some that are specialist based that focus on one type of sector or position. The specialist job boards can be used to target drivers only for CDL, P&D, Linehaul, OTR, LTL, and other regional and local jobs
Examples of these boards include:
- Partner with a recruiting company
Most companies are too busy running their operations and managing their supply chain to actively seek out new drivers, and the ongoing driver shortage only exacerbates this problem.
Professional driver recruiters take the pressure off of you to find qualified candidates. For a small cost, recruiters can handle the job posts, ads, screening, background checks, onboarding documents, and more.
As peak season gets closer and the driver shortage persists, recruiters are well worth the price. Companies like Beans Recruiting act as a gatekeeper for a company, only sending over drivers who are likely to perform well, drive safely, and stay long term.
How to retain drivers
Retaining drivers can be just as hard as finding new ones. In 2020, the churn rate for truckload carriers with less than $30 million in annual revenue was 72%.
But the cost to replace drivers is high. A study by the Society for Human Resource Management found that, on average, it costs a company six to nine months of an employee's salary to replace them. So if a driver was making a 60k salary, it could cost up to $30,000 to $45,000 just to replace them.
With such high stakes, it’s important to use proven retention strategies—not guesswork—to maintain a healthy fleet.
Therefore, the following tips were provided by Prologics, a FedEx Ground contractor that operates over 75 routes a day.
- Bonus at the end of first week and first month
The first month at any job can be challenging, and it is especially true in the trucking industry. According to a study published by Stay Metrics, around 35% of drivers end up quitting within the first 90 days of employment.
When you give drivers an incentive to push through the learning curve associated with delivery driving, they are less likely to walk out as soon as they get frustrated or confused. As drivers get familiar with their routes and the day-to-day operations, they will be more comfortable in their role and less likely to leave.
- Referral bonus for bringing in candidates who stay for 30 or 60 days
This tactic encourages your current employees to reach out to friends and family to fill open positions. They will be more motivated to make the new hire feel welcome and comfortable to ensure they don’t leave before their first month or two.
- Onboarding and orientation on day one
One of the easiest ways to retain drivers is to set them up for success. This should start on day one. Introduce new hires to the team and provide training throughout the day. Instead of just explaining processes and operations, walk them through it and provide a hands-on experience.
- Intuitive, driver-friendly tech
New drivers can excel when given proper technology and training. In fact, drivers who use apps like Beans Route can complete deliveries just as quickly as veteran drivers.
Justin, a B.C. at M.C. Meyer, had to cover a route with over 75 stops for a driver who called out. Although it was only his second time running that particular route, Justin said, “I was able to complete the route as fast as him and at some points faster, just by using Beans Route’s mapping system.”
- Healthy team environment
Cultivating a fun, enjoyable team environment makes work life less stressful. Taking the time and resources to invest in team building can help you improve productivity, increase employee motivation, encourage collaboration and build trust and respect among employees.
Strong teams will ultimately reduce driver churn and improve your overall operations.
- Assigned buddies with incentives
To do this, pair a veteran driver with a new hire with the premise that the employee will receive a bonus if the new driver stays on for 60 or 90 days. Not only does this give your long-standing employees a chance to earn extra money, it also encourages friendship between new and current drivers.
According to a study by Office Vibe, 70% of workers claim that having a friend at work is the most crucial element to a happy work life. Therefore, take any opportunity you have to promote positive interactions between your employees.
- Conduct exit interviews
Exit interviews often provide valuable insight as your soon to be ex-employees tend to be more honest about their experience working for your company. As you continue to conduct exit interviews, you may uncover biases or simple fixes that can improve retention and engagement.
Conclusion
Despite the current labor crisis, transportation and logistics companies still have ways to successfully recruit and retain drivers. With peak season here, it’s imperative that companies have tried-and-true methods for bringing in road-ready drivers and reducing driver churn.
If you need help this season, contact our recruiting professionals at Beans Recruiting.