Outsourcing has become trucking's new buzzword, and people have not been left out of the equation, especially in the industry's tight labor market.Enter driver leasing companies, which can ease your w...
Outsourcing has become trucking’s new buzzword, and people have not been left out of the equation, especially in the industry’s tight labor market.
Enter driver leasing companies, which can ease your way through the human resource process and allow you to concentrate on your core competencies, while supplying you with drivers who are screened, trained and prepped for the drive.
But how can you determine if using leased personnel is the best way to run your operation? The “right” leasing company should complement your operation, rather than pose a major risk.
“Many of our accounts have both company drivers and leased ones. Some like to have a main corps of company drivers and lease for the unexpected. I believe leasing drivers is the way to go because of the flexibility and driver management advantages it offers,” says George Iacono, vice president of Global Driver Services. While he admits to an obvious bias, Iacono says that no other way of hiring can so well address issues such as peak demands, layoffs, and ongoing regulatory management such as driver qualification files, references verification, drug and alcohol tests, customs paperwork, upgrades and training. And driver leasing companies can provide a seamless service, when all is working well.
“The fleet and the driver leasing company have to have a good partnership – as an extension of their personnel. It should lean away from a customer-supplier relationship,” he says.
If you believe that your core competencies lie away from being a human resource facility, outsourcing your driver supply could be the way to go. But keep in mind that the quality of that driver rests with the leasing company. And if you want a certain calibre of driver, you have to make sure your leasing company can deliver.
But too often, says Kieran O’Briain, president of Kee Transport Group, trucking companies view driver leasing companies as ‘rent-a-body’ facilities, and don’t respect the importance of a properly trained and prepped candidate.
“It comes down to your belief in the concept of outsourcing. We’re the pros at setting up drivers, and the trucking company is the pro at setting up the delivery. The problem with the industry is that they’ll always fail at (honoring) driver training requirements if they’re gonna ‘rent-a-body’,” he says.
Often, a leasing company will have a much better handle on the whole hiring process, and can provide a much better fit for the task at hand.
“There may have been an attitude, in days gone by, that drivers from leasing companies were inferior. That seems to be changing,” says Tracy Jobe, president of In Transit Personnel.
So what exactly should trucking companies expect leasing companies to provide within their human resources role? “They should expect everything and more than they would do themselves,” says O’Briain. “Your leasing company should be able to handle not only pre-employment screening, training and road testing, but also familiarizing the driver with paperwork required for your particular job. It’s a seamless transition. Anything else and you shouldn’t be satisfied,” he says.
A carrier should also take a look at the leasing company’s financial stability and business practices.
Since becoming ISO 9002 certified, says Iacono, Global Driver Services is audited twice a year, something that keeps them from slipping up on processes.
“Look for a company that does what it is supposed to do, and I emphasize driver screening and road tests. And they’ve got to have good administration, and quality assurance. My advice to fleets is to meet with the driver leasing companies. Be convinced that their programs and processes meet your needs, with properly qualified personnel like an onsite safety manager,” he says.
Your leasing company should also be involved in keeping up with industry news, and keeping employees informed with seminars, reading material, upgrading and training. O’Briain says he will monopolize fax machines to send out an informative article to clients and drivers.
But, he says, if the onus is on leasing companies to provide staff that will be well-prepared, the trucking company must also have good planning behind it, and accept that the leasing company may expect certain working conditions in return.
“We partner with companies and our partners are very successful. But my niche area (driver leasing) has a bad reputation. My battle is actually convincing carriers we know what we are doing! But in other situations, the trucking industry doesn’t give these drivers a chance. For example, they’ll call up the night before for ‘ten bodies’. God only knows what’s going to happen. Can’t you have better planning than that? I learned a long time ago, every time you roll the dice on this, you lose. (If anything happens), all the company knows is two agency drivers crashed his truck,” he says.
In the long haul to the U.S. arena, it is even more acutely important for carriers to plan ahead as much as possible.
“It can be a tall order getting U.S. drivers for temporary assignments. It’s hard enough full-time,” says Iacono. He says that they recently filled a request for 20 U.S. drivers for one client, but without shortcuts, it took three weeks to find the drivers. “It does regularly happen that they’ll call the same morning for drivers. We may have some that are available (on an on-call basis). But the earlier the notice the better,” he says.
These days, says Iacono, the main focus is toward long haul, U.S. drivers.
“Things have shifted completely to drivers wanting to be home every night. It’s just a harder recruiting process,” he says.
Your final selection for a driver leasing firm should look at more than cost factors.
“Audit the firm, determine who their clients are, and how they are treating their drivers. If the leasing company offers some extra value-added services, it can also tighten the margin of error,” says Jobe.
She cites EAP programs, health coverage, and driver incentive programs.
Beware of those who are treating employees as subcontractors, where drivers get paid in gross but are not covered for workers’ compensation, unemployment insurance, etc. If the Workplace Safety and Insurance Board, which does not honor such arrangements as true subcontracting, were ever to audit an agency that has since closed its doors, the trucking companies can be pretty sure they will be next on the list to take responsibility.
“Make sure the leasing company has hired drivers as employees. You can’t just focus on costs. We’ve all got the same costs, so if someone is going on the cheap, they’re not doing something,” says Iacono. In the trucking industry, a good reputation will often sell better than anything else.
Some trucking companies will make use of different agencies to fill their different needs. But beware of the pitfalls of cross-sourcing your drivers.
“It depends on the size of the contract. If you have 500 trucks, you may not have a choice. If you have 20, you’re in a good position to use a preferred vendor. But if you get pulled into infighting, what does that have to do with running your fleet?” asks Jobe. And dealing with several agencies may defeat the purpose of outsourcing human resource management in the first place.
“For those who may use a few agencies at a time, they’d be able to do a better job by getting most of their drivers from the same source. Some companies like to deal this way, but you’re getting piles of invoices,” says Iacono.
But whether you deal with one or more agencies, another issue to keep in mind is communication and discipline. For example, when something goes wrong, who is responsible for solving the problem?
“With driver leasing, a third party is looking at driver satisfaction, safety, and compliance. You have someone in a collaborative role, almost like a mediator’s position, correcting some of the processes to make them more workable.
From a safety standpoint, drivers may have issues they don’t want to bring to the table unless it’s through a mediator, i.e. someone from payroll could discuss a pay rate, or the safety director could discuss complian
ce. With ongoing reporting, someone has to monitor success levels through contact with the client. If there’s a gap in information, we can collaborate to fix that gap,” says Jobe.
“The business that I’m in is a tremendous business. My job is to keep these drivers of sound mind and body,” says O’Briain.
And part of keeping the leased drivers of sound mind is making sure they can be well integrated into the client’s corporate culture. For example, where will the driver’s loyalties lie?
But O’Briain says it’s more a question of ensuring respect for the driving profession as whole.
“There should never be a difference between the company driver and the leased driver. They’re both truck drivers,” says O’Briain. And if the driver will perform well for the leasing company, beyond the initial screening, chances are, that driver will perform wherever he or she is sent.
“We stand up for our drivers, and we’ve screened them beforehand. Once a guy’s in the system, he’s a good driver. It’s a two-way street. Mediation isn’t the right word. We learn together. I don’t shoot guys when they make a mistake. Maybe someone didn’t tell him. But you just know when you have a team player. When you road test, you base it on ‘Would I let him drive my truck?’ That’s a tough road test, when you do it that way,” says O’Briain.
How well a leased driver can be integrated into the rest of the workforce will depend not only on how the leasing company preps the driver, but how he/she is received at the client.
“Integration depends on the climate at the company. Many times there are crossed loyalties across many camps. In a situation where there are several agencies, it is never a good idea to allow a driver to change employers. It becomes an endless cycle,” says Jobe.
Leased drivers who go to work in a unionized environment can also sometimes encounter friction.
“We usually deal with a unionized environment on a temporary basis. If it becomes a problem we handle it. But mainly, we give the driver some information (about the environment) beforehand,” says Iacono.
The leasing company that treats its drivers well wins with loyalty and good service that can be passed on to the carrier.
“It’s about incentives, banquets, tournaments, regular wage surveys to be current with market trends. How we treat them really helps,” says Iacono. He says drivers’ loyalties tend to lean toward the client side, (in full-time contracts), just by virtue of their being in a truck with the client’s name on it. “Although these drivers are our employees, they feel like they work for the client. And I believe that’s no disrespect to the agency. I believe that’s a compliment to the work relationship between the fleet and the leasing company,” he says.
And where the driver may not be a good fit, the leasing company can work around it with considerably more flexibility than the carrier. “With a new contract, you try to provide your candidate with as much information as possible. It’s never a lost effort if it’s not a good fit. In a tight driver market, it’s never easy, but it’s doable. You have to paint a clear but promising picture,” says Jobe.
“Most of our business is by reputation. Carriers have to do their homework. We tell any potential new account to call our customers. That says everything,” says Iacono.