Tackling driver turnover: Part 2
In part one we talked about the delusion of the industry, we talked about the sales job to the inside the walls personnel, and we talked a little about apathy. The next step if you were to follow the process of our retention action plan at TCA would be to establish how we as a company will conduct ourselves moving forward. Not only in regards to driver turnover but in all of our business interactions, customers, suppliers, the communities we operate in, the motoring public, government agencies and alike.
Of course, I’m talking about company values, and I am treading softly here because I see many companies expressing their company values statement very proudly on their websites and they look and read great. The issue that can come in to play is that in many cases is that the statement was created in a cocoon what I mean by that it is quite likely that the statement was developed with the assistance of a well-intended consultant. Possibly at a corporate retreat where the senior management team bonds for a weekend and produces a document designed to become a shining beacon for all to follow.
The potential problem is that when you tell me how to act and to act in accordance to your values rather than my own I immediately question your intentions, and by the way what about my core values, do they mean nothing to you. My core values were instilled in me by parents, my mentors my grandparents’ teachers friends, etcetera. What the goal should be is to turn personal values into shared values and for that, we need a consensus where everyone who chooses to participate in the exercise to develop the statement is strongly encouraged to do so.
I believe the best way of gaining consensus on a value statement would be to ask everyone in the business to contribute to the effort. If done this way they genuinely are shared values and I believe have much more power when they are challenged or bumped up against during any given situation. So here is the question for your people, in a single paragraph, please describe the ideal company you would like to work for, please make your description short and to the point. The nice thing with this is that we as humans share many of the same values we want honesty, respect, opportunity, accountability clarity, etc.
When my company went through this exercise I called the value statement we collectively came up with my sword, I used it on many occasions, and I truly believe it had more power because I could say that we as a group decided on the statement. Rather than talking about the statement as an outside element brought in by ownership for all to be guided by. My friend Geoff Topping VP HR over at Challenger Motor freight put things in perspective in explaining things to new employees. They have a Vision Mission and Values statements that they teach to all new hires. For folks to better understand the company statements, he calls them The Dream, The Plan, and The Behavior, which is a great way to put a little different paradigm on the subject.
What you have started to do here build the platform and I call it, when you have high turnover in a company there is a genuine likelihood that your drivers don’t believe too much of what management has to say. I genuinely hope that I don’t offend when I state this but it is likely true, so before you put your retention plan in place you have to build a solid foundation from which to launch it. It would be best if you got the people inside your walls all pulling in the same direction.
Once you have the groundwork done the next step is to thoroughly understand exactly where you are in the marketplace where you compete in recruiting and retaining drivers. To some, this might seem obvious but believe me many companies do not get this part right. Here is the question where are you to the competition and does that position match your company’s growth expectations and budget. If your company has a growth expansion plan, you had better place your driver and O/O remuneration in the upper quartile for your geographic area or good luck with ever achieving your goals. Similarly, if you plan focused on increased operating revenue without substantial growth, you might be okay with being at the midpoint or a little higher. If you aren’t monitoring this essential element of your retention efforts get on it now!
If you have high turnover, your company is likely being measured entirely by your remuneration package buy your drivers and O/O’s, a sad truth, but a real one. With that in mind, perception is the reality, how things look is important. In my own experience, at one time we simplified the owner-operator pay so that we paid our contractors a net amount after all the items we added and then deducted from their pay had been netted out. It was straightforward, and we were proud of what we had done for our O/O’s. However, after a while, we started getting complaints that the competition was paying a higher rate. Sure they had deductions too, but they were apparently getting a higher top line than our owner operators – or so they believed. After explanations failed to calm the situation, we changed our payment system to add in the details of all the items we paid on behalf of owner-operators and then showed the corresponding deductions. For instance, we showed a 5-cent per mile item for license plates – and then a 5-cent deduction for those plates. Also, there were the 3 cents for insurance along with a deduction later on for the insurance coverage we paid. There were several items like this with the driver now getting a grossed up per mile pay rate, followed by the itemized deductions of all these items.
The new gross line ended up higher than the competition (they were being paid better all along), but the net amount was the same as it was before? It cost us nothing to do, but now the owner-operators were satisfied, and complaints stopped. We did not deceive anyone we told everyone what we were dong lesson learned perception is the reality. That is important to keep in mind when looking at various pay packages and techniques.
If your interested in gaining a reality check on if your companies retention efforts are as effective as you hope they are please hit this link take a quick survey and we will let you know, no strings attached. Take good care. Tackling driver turnover part 3 coming next – why is safety critical to driver recruitment and retention?
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