Truck News


Let’s Talk Insurance: Driver Retention — Bottom Line Can Be Altered When Hiring New Drivers

Last month, I gave a few simple pointers on how to hire good drivers to keep your business rolling and your insurance rates as low as possible.This month, I'd like to talk about good driver retention ...

Last month, I gave a few simple pointers on how to hire good drivers to keep your business rolling and your insurance rates as low as possible.

This month, I’d like to talk about good driver retention practices and how they impact your bottom line and insurance.

For decades, driver retention has been a big problem in the trucking world.

But did you know that a relatively average driver turnover ratio of 30 per cent a year looks quite different from an insurance point of view?

In the eyes of an insurance company, you may have a significantly changed driver force when you bring in a crew of new drivers.

The bottom line is that to an insurer, the quality of your risk can be altered dramatically when you rehire.

Hidden costs of hiring

When you dig right down, the true, often hidden costs of hiring are significant … as much as 30 per cent of a driver’s salary when you add up the time and money spent reviewing applications, conducting interviews, getting medical and drug tests, doing orientation training and setting up new driver profiles that satisfy federal Canadian and U.S. DOT requirements, etc.

Not to mention the real financial risk of increased accidents (a major insurance concern) from new hires!

Greater risk with new drivers

The possibility of a new driver being in an accident due to his or her unfamiliarity with new equipment, hauling a new commodity that they are not trained or experienced in, operating in a new geographic location, etc., is relatively high.

That means greater risks of having a serious loss for which you and your insurance company will have to pay dearly.

Realistically, the more often you hire, the more often you may find yourself faced with an unknown and untried driver who might get you involved in a major claim.

And the problems snowball from there.

If you have significant driver turnover you may also have incomplete files and missing history relevant to drivers, a very dangerous thing.

In the event of an accident, the prosecuting lawyers could seize upon these gaps, as proof of your poor driver management, potentially putting you at risk of facing a multi-million dollar court case.

Why are they leaving?

Your best bet is to work even harder to retain the good drivers you have.

Turnover typically occurs with the least-tenured employees – so you want to work extra hard to keep them motivated and devoted to your company.

If you’re having retention problems, it’s a good idea to do an analysis as to why drivers leave your company. Conduct exit interviews in a friendly and open manner to find out why.

You should also take this as a warning signal of a more serious threat: management may be next. After all, if you can’t keep drivers, what makes you think you can keep good supervisors and managers?

Develop and build trust

In dealing with retention you have three options: you can, of course, do nothing, you can increase pay or you can develop and build trust.

We strongly recommend the latter.

A smart carrier will do all that it can to keep its good drivers motivated and feeling appreciated.

Some of the best operations we see as an insurance company actually involve their drivers in such things as the selection of equipment, routing and other high level decision-making processes like the recruitment of other drivers. Showing encouragement and appreciation for a driver’s work achievements is a good idea.

And by that I mean recognition for everything from long service and safe driving records to quality customer service.

Another way to look at it is this: you are a trucking company that exists to haul freight down the road, damage-free and on time.

If you fail to keep your drivers loyal and you constantly need to rehire and retrain new drivers, not only do you have to be an outstanding trucking company – but you are also forced to be a high-frequency, expensive training organization. And that comes right out of your bottom line.

Driver incentives – take a long term approach

If you have not yet set up a proper incentive program to retain drivers – you should. Ideally, it should be a sustainable, long-term plan. In past years, some carriers have tried to fund a quick short term incentive program for drivers out of temporary fuel or insurance savings. The problem is that a lot of these programs were one or two-year wonders, for the obvious reasons: once the fuel savings or premium discounts are no longer available, the companies were left wondering: “What do we do next?”

Cancel the incentive?

Driver incentives should be sustainable over the long term and should be supported from the bottom line success of your company rather than from a single short term business component over a short period of time.

The most professionally-run companies recognize that the added cost of a proper driver incentive program is more than offset by the reduced costs of not having to constantly hire and train new drivers.

Not to mention the fewer accidents and related savings like insurance that result from a strong, loyal driver force.

Keep in mind that incentives should become self-perpetuating year after year.

Incentives are a good indicator

In short, a smart operation should take a bigger business approach with their driver incentives and understand that a good retention program absolutely has to last more than a year to be truly effective.

And remember: when an insurance company looks at you as a risk, among other things they’ll be trying to get a good feel for the quality of your fleet, the drivers you have, how long they stay and what level of training goes into filling in their skill gaps.

In the end, don’t forget that when you put someone behind the wheel, it’s your name on the side of the tractor-trailer, and your company.

What you do with your drivers can make a big impact on your bottom line.

After all, good drivers are hard to find.

Once you do find them – motivate them, give them incentives … and do all you can to keep them happy and committed to you, as an employer, and the profession for the long haul.

– Mark J/. Ram is president and CEO of Markel Insurance Company of Canada. Please send your questions, feedback and commentary about this column to For more information about Markel visit

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