I have been out and about since the last article, couple times to Texas, Toronto last week to the Surface Transportation Seminar and next week off to Mississauga to the Bridging Boarder Barriers session, presented by Truckload Carriers Association. I have also been busy as the author of the just released Driver Retention Masterclass series through Vertical Alliance that can be found at, www.infinitiworkforce.com/experts/expert-modules-library/driver-retention-masterclass that was a shameless act of self promotion by the way, oh well it’s a good program what can I say.
Releasing the training has granted me the opportunity to reconect many fleets and to facilitate a number of workshops on both sides of the border, which I greatly enjoy. As you may recall last month I cautiously dipped my toe into the subject of driver wages, and I thank many of you for your comments and feedback, I love to hear from you folks. This month I think it would be valuable to any number of carriers who might read this article to give them some thinking material on the same subject.
In my workshops I stress that carriers have to know where they are in relationship to the rest of the market on driver wages, usually bewilders me when I ask companies their turnover numbers and find out their much higher than they would like. Second question is what are you paying drivers in relationship to the market they compete in only to hear back that they are middle of the road or below the mid point and many are not sure how the measure up, not a clue. Hey I’m no Warren Buffet but I think we might have identified where one of the issues might be with you turnover.
With a lot of carriers I think they feel stuck, kind of the chicken or the egg type scenario, if I pay the drivers more than I am now, I might eliminate the thin margin that I have, it might not be good but it is at least black ink. The problem with that logic is that it misses the very thing that will actually increase their margins; part of the solution to both issues is a win/win program, a share in the gain opportunity. I know this is not new information and that and that there are carriers doing this now but not near enough from what I have seen.
From the mountains of data that is readily available in today’s world it has never been easier to build a set of metrics, MPG, safe driving, hard brakes, clean inspections, accidents and claims to name just a few. Create a reliable scorecard predicated on where your fleet is now on these items and what the potential gain is for your bottom line and then generously reward the drivers individually on their performance related to each item.
That is what is called a win/win in addition and to assist the driver you offer education on each item so that they can learn how to be best in class on each of them. This type of system has the potential for the driver to earn their way to the top of the pay scale in the industry and of course increase the carrier’s bottom line substantially.
Word of warning to carriers is to not go down this road unless you have your act together, there is a lot of base work that has to go into this program. There would be nothing worse than rolling this out if you don’t have a very clear picture for every driver as to exactly the potential size of the reward, how you will administer the program and how you will ensure the integrity of the program.
I would probably start slow and bring in more items as I work the bugs out of the ones I start with, MPG is an obvious one that would easily be measured and rewarded. Just and example if you were to realize eight miles per gallon as a goal and your currently realizing 7 mile per gallon, you do the math for yourself but if I was to use $1.15 per liter the savings are in the range of 8 cents per mile. A hundred thousand miles is $8,000.00 so why not split that with the driver. You get an extra 4K and so do they. Continue with the other metrics and your starting to accumulate some serious money as a carrier and the driver is now vested in the results of the truck.
Once you have your numbers rolling in and your starting to enjoy the win/win results one could even go further with this type of thing and get your company involved in a benchmarking program so you can measure your results to other comparable companies to see if you’re as good as you think you are. https://tcaingauge.com
The fixed expenses involved with the operation of a trucking company are solidly within the domain of management, equipment cost, facility overhead, plates and on and on. Once these are negotiated for their respective term, that’s it, nothing you can do until renewal and then you start negotiating again. Where the cash is hidden is in how the variables are managed, yep all those things that generally are in the domain of the driver, and how do we reward that person, usually by the mile, it’s not enough.
If you think about it these two paradyms are diametrically opposed, so I want you to operate my equipment as efficiently as possible at all times but I will reward you solely on maximizing the production of miles. The balance and the win/win here is for the company to train, entrust and reward the driver in such a way as to operate the equipment as efficiently as possible while at the same time they professionally execute the delivery of the customers good, and this balance can be acheived.
Speed Governors, Electronic Logging Devices, GPS tracking, are kidding me, turn and burn is soon to be gone forever, and good riddance. Driver if your at a accompany that still operates that way, you need to be looking around for a better gig and if I was you I might be looking for one that offers to reward me for my professionalism in a fashion that might resemble the win/win described above.
Mr. Ray Haight has enjoyed a successful career in transportation starting as a company driver and Owner Operator logging over one million accident free miles prior to starting his own company. After stepping down from a successful career managing one of Canada’s 50 largest trucking companies, Ray focused on industry involvement including terms as Chairman of each of the following, the Truckload Carriers Association, Professional Truck Drivers Institute, North American Training and Management Institute and the Ministry of Training Colleges and Universities voluntary apprenticeship of Tractor Trailer Commercial Driver, along with many other business interests, he enjoys a successful consulting business, also sitting on various Boards of both industry associations a private motor carriers. He is also Co-Founder of StakUp O/A TCAinGauge an online bench marking service designed to assist trucking companies throughout North America focus on efficiency and profitability within their operations. All posts by Ray Haight