Revealing the true, ugly cost of driver turnover

Ray Haight
@RayHaight

In my role as a driver recruitment and retention coach, I have observed that driver turnover usually originates as an offshoot of some extenuating factors from the past.

The company may have experienced rapid growth. The company might have been sold or amalgamated with another business.

The company’s primary customer base or lanes may have switched, ie., from shorthaul to longhaul. The company ownership might have passed on to the next generation, or the primary funding source may have changed, bringing new outside influences.

There is a phrase from Samuel Johnson I used in my Truckload Carriers Association Driver Retention Project Plan that goes like this: ‘The chains of habit are too weak to be felt until they are too strong to be broken,’ which means that this is an industry that survives on granular margins.

You cannot take your eyes off the ball in any department if you are running a trucking company; things are just too tight.

(Photo: iStock)

Johnson said, the trouble is you do not see changes coming. Habits start so small they can go unnoticed until they are “too strong to be broken.” Driver turnover is creeping up? Don’t worry about it. It will come back down as soon as this or that happens.

Next thing you know, your numbers are out of line, and you can’t seem to bring them back down as they continue to deteriorate.

Most of my work done with fleets starts with a general conversation that paints a picture for me. It is not unlike peeling the layers of an onion.

Questions I ask may be: What’s the fleet size? What type of trucking does the company do – flatbed, van, etc.? What’s the safety record of the business? What is the current driver turnover number, and does that answer come with a lot of conjecture? How many unseated units do they have? What does the corporate structure look like and does it reveal a boss or a leader? Along with the all-important question of: ‘What do you think the issue is?’

There is more, of course, but those questions can easily get a conversation started about the possible issues that cause driver turnover.

These would include: safety; communication; culture; operational training and empathy; systems proficiency; consistency in driver contact; employee opportunity for advancement, etc.

Here is a tip for those companies that are worried about becoming victims of the above scenario. On your income statement, add a line item for turnover, monthly and year-to-date. If you lose 10 drivers a month at a cost of $7,000 per driver, that’s $70,000 a month, $840,000 in any given year.

This number will likely be acted on much quicker than if it were not revealed this clearly, especially if it started to creep up with any momentum. Next, add missed gross margins from unseated units. All of this is, of course, accounted for in other areas of your financials. Reveal them as a sidebar and see the eyes in the room roll.

We know we can’t hire our way out of the current situation, and by standing still you will become a target. You. Better get at it, folks. If you would like to have a general conversation on your company’s turnover, please reach out to me. Let’s see what another set of eyes might reveal.

 

Ray Haight

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.

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  • Complete off the issue of why so many truck drivers get sick driving truck and end up disabled. E-logs made things worse instead of better because of actions by certain receivers. We need to look at treatment and medical care all truck and bus drivers. Truck drivers and trucking companies are in a very bad position until Fed rules are changed.