Looming driver shortage threatens the bottom line

by Rick Geller

As challenging as the recent economic downturn has been, it may be masking a bigger threat that’s still to come – in the form of a looming driver shortage.

While there seemed to be plenty of drivers when carriers were forced to park equipment because of a lack of business, much of the nation’s excess freight capacity has disappeared. As the economy recovers and more cargo begins to move, fleets may find it harder to attract the workers to address new opportunities. Some of the former employees who lost their jobs may even have left the industry forever.

Every loss of a qualified driver can have a direct impact on the bottom line at the best of times. Think of a company that has 10 drivers, loses two of the employees, and also tends to retain only half of its newly hired drivers. The fleet’s recruiter will actually need to hire four candidates to find the two who will remain. If it costs a conservative $7,500 to find and train a new employee, that search will cost $30,000.

The potential costs of retention and recruiting do not end there.

Well-trained and qualified drivers may be more valuable to a fleet than ever before. Programs like the CSA safety measurement system in the US, for example, are placing a greater emphasis on driver behaviour. Those who want to ship freight south of the border will need to have access to employees who comply with the rules, and will keep the ratings clean.
The industry’s aging pool of workers is merely adding to the challenge. As recently as 2004, the average age of men in the trucking industry was 42, which is four years older than men working in other occupations. As the oldest workers among them retire, they will need to be replaced by a new generation of candidates, and these younger workers also tend to emphasize a work-life balance, meaning that fleets might even need to explore different trip planning strategies to keep them on the job.

In fact, there are a number of factors that can play a role in retaining employees of every age. If a large number of drivers leave a job shortly after being hired, the losses can usually be traced to recruiting practices. Maybe they were not given an accurate idea of the job that will exist. If the drivers are quitting after six months or a year, however, the challenge is likely linked to factors such as pay and working conditions.

There is also no question that wages can play a role in a driver’s decision about where to work, and a steady decline in driver wages does not bode well for the industry as a whole.

While today’s average long-haul trucker makes around $65,000 a year, those who turned the wheels about 25 years ago were annually making close to $85,000 once inflation is factored into the equation. The fact that freight rates have actually declined over the past four months will undoubtedly make it more difficult for some carriers to increase compensation. If the trend continues, that will make it difficult to keep candidates from moving to other industries entirely.

Still, while many drivers will look for other jobs in the search for more money, there are other factors that cause them to look
in the first place. Research by the Canadian Trucking Human Resources Council proves that drivers also emphasize the importance of things like respect and support.

Proactive fleets can take the steps that will keep these drivers on the job. The ongoing support of dispatchers and mentors will show drivers that they work for a company that cares.

Retention efforts can even be influenced by the steps that fleet managers take in the aftermath of a crash. According to one survey of safety managers, a commitment to remedial training ranked seventh out of 12 ongoing safety-related issues. Yet an investment in this type of training that should be available through your insurance provider has proven that it can correct problem behaviours and protect valuable employees.

The training that can help to retain drivers is not limited to shifting gears and turning corners, either. Drivers will feel more comfortable in their roles, and will be better equipped to meet ongoing challenges, when they receive
refresher courses about evolving regulations and fleet policies.

Investments into programs like these can help fleets to prepare for many of the challenges to come. And make no mistake about it, the challenge of a driver shortage is on its way.

– This month’s expert is Rick Geller. Rick is the director of safety and signature services for Markel Insurance Company of Canada and has more than 25 years experience providing loss control and risk management services to the trucking
industry. Markel Safety and Training Services, a division of Markel Insurance Company of Canada, offers specialized courses, seminars and consulting to fleet owners, safety managers, trainers and drivers. Markel is the country’s largest trucking insurer providing more than 50 years of continuous service to the transportation industry.

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